Road projects up for grab

The Jakarta Post, JAKARTA | Fri, 01/16/2009 4:50 PM  

Despite it still being early in the year, the Public Works Ministry has already opened tenders for 22.5 percent of upcoming projects this year. 

The ministry is one of the key implementation agencies in the government's drive to boost infrastructure projects to stimulate the economy, amid a global slowdown. 

It has been going smoothly so far, with close to a quarter of planned projects already out to tender, Hermanto Dardak, the Ministry's director general for highways, said on Thursday. 

"The opened tenders are worth around Rp 3.8 trillion," said Hermanto. 

He added the ministry is planning to issue tender notices for projects worth another Rp 2.4 trillion soon. 

Under the 2009 state budget, Rp 17 trillion has been allocated to finance projects under the ministry's supervision, up from Rp 16.07 trillion last year. 

This hefty allocation is hoped to create more jobs and help shield the economy from the more devastating impacts of the global economic downturn, forecast to hit the economy with increasing force in the first half of this year, probably causing layoffs in various sectors. 

According to Hermanto, almost 40 percent of the projects to be carried out this year are multi-annual projects with contracts already signed last year. 

"We hope the multi-annual projects, especially for those that require a large number of workers such as roads and drainages rehabilitation, will help absorb quite a number of jobs," he said. 

Hermanto added the ministry had taken some necessary steps to speed up budget disbursements in the first quarter. 

Slow disbursement of budget allocations by several ministries has been detrimental in the past to efforts to accelerate development of the infrastructure sector. 

"We already opened tenders for some of these projects last November and most of the winning companies are ready to sign their contracts this month." 

These multi-annual projects, he continued, are expected to be able to absorb around 500,000 new jobs. "Some of the projects will use labor intensive technology." 

Last year, the ministry succeeded in utilizing 95.54 percent of its budget. It also succeeded in completing 97.03 percent of its projects out of the targeted 98.32 percent. 

The ministry has its targets set to go even higher this year. 

"In total, we are planning to build 4000 km of roads this year," Hermanto said, including a target of reducing the number of heavily damaged roads down to 0 percent. managed to reduce it from 8 percent to 3 percent last year," he claimed. 

According to Hermanto, some of the vital roads for the nation's commodity trade, namely the Pantura road in Java and the Lintas Timur road in Sumatra (Eastern Trans Sumatra), are still in poor condition, causing high transportation costs and reducing competitiveness of commodities. 

Among the prioritized projects are the maintenance of around 31,000 km of roads and 53,000 meters of bridges, land acquisition costing about Rp 320 billion and land capping costing around Rp 2 trillion. 

Despite emphasizing road maintenance, the ministry is planning to give projects for new roads the largest slice of the budget cake this year. 

Around Rp 11 trillion for instance, has been allocated for the building of flyovers. 

"We have already asked the government for around Rp 4 trillion more from the stimulus package, although no approval yet," Hermanto said, adding that if the request was granted it could provide 150,000 more jobs. 

The stimulus package he was referring to was the one the government announced last Monday, in which it would provide an additional Rp 15 trillion on top of the Rp 12.5 trillion already designated in the budget. 

The total of Rp 27.5 trillion is still lower than the Rp 50 trillion worth of stimulus measures promised by President Susilo Bambang Yudho-yono earlier. 

Currently, there are about 350,000 km of roads throughout the archipelago, 35,000 of which were built by central government through the Ministry. (dis)