image head news

PUPR Contracts out 4,141 Work Packages worth Rp 50 Trillion

Date :

01 Mar 2017

Category :

PPPs/Infrastructure Investment

Source :

Investor Daily

File :

Investor Daily, 6 March, 2017, Page 6, Section: Infrastructure & Transportations 
Author not mentioned

JAKARTA - Ministry of Public Works and Housing (PUPR) has signed the contracts for 4,141 work packages worth Rp 50.62 trillion as of 3 March 2017. The value of these contracted work packages is equivalent to 65 percent of the total budget for contractual works of Rp 77.66 trillion, which is divided into 11,071 work packages.

"With the rising speed with which contract signing has been done, the works could commence and, from the economic perspective, they can drive the real sector in the regions, from Sabang to Merauke," said Minister of Public Works and Housing, Basuki Hadimuljono, in Jakarta, Sunday (5 March).

Most of the work packages that has been contracted, he continued, are from four directorates-general (ditjen) that get the largest budget allocations in the Ministry of PUPR. Directorate General of Water Resources, which has a total number of 3,984 work packages, has contracted out 1,716 packages valued at Rp 19.06 trillion.

"This work package is primarily for the construction of supporting infrastructure for water security and national food sovereignty, such as the construction of dams, rehabilitation of irrigation networks, construction of embungs [water storage ponds], and flood control," he said.

At Directorate General of Highways, of the total number of 3,657 work packages, some 1,288 work packages worth Rp 22.14 trillion have been contracted. The funds are primarily used to improve connectivity between regions, such as construction and maintenance of roads and bridges, including border roads.

Meanwhile, in the Directorate General of Human Settlements (Cipta Karya), from the total number of 2,313 work packages, some 792 packages worth Rp 5.69 trillion have been contracted to improve the quality of residential areas in Indonesia through the provision of sanitation, clean water and waste water management. For the housing sector, through the budget of Directorate General of Housing Provision, of the number of 724 work packages, as many as 301 packages worth Rp 3.64 trillion have been contracted.

"Financial utilisation of the budget at the Ministry of PUPR as a whole has been recorded at 4.94 percent and 4.56 percent in terms of physical progress of construction," he said.

Basuki said that the budgetary priority of the Ministry of PUPR is for capital expenditure that adds to the state assets and supports economic growth. Of the 2017 allocation of Rp 101.496 trillion, the capital expenditure portion is Rp 76.27 trillion (75.1 percent) followed by spending on goods with Rp 22.48 trillion (22.2%), which consists of Rp 5.6 trillion for purchase of goods with the character of capital spending, and personnel and routine expenditures of Rp 2.75 trillion (2.7 percent).

Basuki revealed that, one of the biggest challenges in infrastructure development is the high gap between the regions and territories. For that, he continues to encourage more equitable development in the border regions, outermost islands, disadvantaged areas and rural areas. The step is through various programmes for the poor, including access roads and local roads, suspension bridges, small irrigation, Community-Based Water Supply and Sanitation (Pamsimas), Community-Based Sanitation (Sanimas), self-help houses, and low-cost apartment towers.

Meanwhile, within the Directorate General of Railways of the Ministry of Transportation (Kemenhub) there are 78 work packages that have been contracted in 2017, with a budget ceiling of Rp 7.5 trillion. The nominal value is about 50 percent of the total budget limit of the directorate general’s activities throughout this year, which reaches Rp 14.9 trillion, consisting of 351 activity packages.

In the implementation of the 2017 budget, Directorate General of Railways has got a budget ceiling of Rp 16 trillion. In details, the amount comprises Rp 14.9 trillion for activity budget and Rp 1.1 trillion for operational expenditure.

Director General of Railways of Kemenhub, Prasetyo Boeditjahtjono, said there are 273 other activity packages being followed up. The breakdown is as follows: 47 activities are in the auction process and 226 packages are in the preparation phase of the auction.

"Some activities are still not yet auctioned because they are still in the process of DIPA [Budget Implementation Check List] and POK [Activity Operational Guideline] revision. Also, there are still activities in the process of furnishing tender documents, whilst some others will only be auctioned off in March and April 2017,” said Prasetyo.

Based on the source of funding, 50 percent of the activities for railway infrastructure development in 2017 are carried out using the state budget (APBN) for those with execution duration of one year, and the rest are undertaken through the mechanism of State Sharia Securities (SBSN) for those with execution timeframe of two to three years.

In connection with the targeted budget utilisation of Kemenhub in 2017 as set by the Minister of Transportation, Budi Karya Sumadi, to be above 90 percent, Prasetyo reminds each Technical Balai [Office] of Railways, being the operator of activities, to constantly monitor progress and to detect obstacles faced, as well as to find the solutions.

"The main obstacle to achieving the target usually pertains to land matter. Related to this, it is emphasised that all the Balais within the scope of Directorate General of Railways to always coordinate with various related parties. Coordination is the key. In principle, Directorate General of Railways is optimistic to achieve the target," said Prasetyo. (esa)