Govt to spend big on highways

Desy Nurhayati, The Jakarta Post, Jakarta | Wed, 01/07/2009 11:19 AM  

The Public Works Ministry is to allocate Rp 17.5 trillion (US$1.54 billion) for making new roads and improving existing roads and facilities as part of a massive government spending program on infrastructure. 

Minister Djoko Kirmanto said Tuesday the fund excluded spending on turnpikes, which would be funded entirely by the private sector and state-run turnpike operator PT Jasa Marga. 

This year's road construction program financed by the ministry would prioritize inter-city roads across Java and Sumatra, which would contribute to the creation of 1.1 million new jobs in the projects managed by the ministry. 

"We will spend half of the Rp 35 trillion to build roads, while the remaining Rp 8 trillion will go on irrigation canals, with Rp 9.5 trillion for sanitation and other projects," Djoko said after meeting President Susilo Bambang Yudhoyono. 

"We estimate that the projects will be able to create 1.1 million new jobs, not including jobs in the informal sector." 

The government is targeting to create 3 million new jobs next year through various state-funded projects to anticipate mass layoffs due to adverse impacts from the global economic downturn. 

Last year, infrastructure projects provided about 800,000 jobs, according to the ministry. 

Djoko said the government had also targeted to complete ongoing construction of roads across southern Kalimantan and western Sulawesi by the end of this year. 

The Suramadu bridge connecting the East Java capital of Surabaya with Madura island was expected to be completed by March, he added. 

Indonesia, Southeast Asia's largest economy, has a total of 74,753 kilometers of roads, excluding turnpikes, according to the ministry. The road capacity is the lowest in terms of density in the region taking into account the total land area of 735,355 square kilometers. 

The limited road capacity has become a bottleneck for businesses requiring good distribution and logistics for deliveries, creating unnecessary delays and additional economic costs. 

Strategies prepared to speed up spending 

Acting Coordinating Minister for the Economy Sri Mulyani Indrawati said Monday that government strategy to accelerate state budget spending would include an incentive for ministries and agencies to start their projects in the first quarter. 

Mulyani said the Finance Ministry would immediately disburse cash to project funding proposed between January and March, without having to undergo tedious bureaucracy. 

The Finance Ministry will assign auditors from the State Development Comptroller (BPKP) to provide legal advise to all projects in a bid to assure project managers they will not risk future prosecution should there be irregularities in project management and financing spotted by auditors (attributable to the speedy measures proposed). (hwa) 

Infrastructure spending in 2009 state budget

Ministry Allocation

1. Public Works Rp 34.98 trillion
   
   
2. Transportation Rp 16.97 trillion
   
   
3. Energy and Mineral Resources Rp 6.74 trillion
   
   
4. Information and Communication Rp 2.06 trillion
   
   
5. Public Housing Rp 964 billion
   

Total Rp 61.67 trillion

Source: Finance Ministry