Sign up for E-Blast


View Sample
Managed by: SMEC

DECENTRALISATION: Corruption Eats into Road Infrastructure

JAKARTA, KOMPAS - The quality of regency and city road infrastructure in recent years has on average been deteriorating. This is mainly due to the rampant corruption in projects, which counterbalances budget growth.

Such were the findings of the Monitoring Committee for Regional Autonomy Implementation (KPPOD) as described by KPPOD researcher, Ratnawati Muyanto, during a public discussion in Jakarta, Monday (17 September). KPPOD conducted studies in 41 regencies and cities.

Ratnawati said that, during 2007 - 2010, spending budgets of regency and city governments in Indonesia were [growing] 11 - 13 percent. However, the quality of infrastructure was instead decreasing, particularly roads.

In 2007, the length of regency and city roads with badly damaged quality [condition] reached 24.9 percent. In 2010, the status of badly damaged [roads] rose to 44.4 percent. "This was, in our findings, due to the factor of corruption," said Ratnawati.

The emerging indication, Ratnawati continued, is attributable to the marking up of the values of government projects as contained in the regional government budgets (APBDs), which then become sources of corruption. This modus operandi is categorised into grand corruption, or political corruption, namely corruption at the level of policy makers.

Corruption, according Ratnawati, has occurred due to political bargaining between regional legislatives and executives. Budget increases have finally happened as a result of expectations of the bureaucracies in the regions to make profits from infrastructure projects.

Senior economist of the World Bank in Jakarta, Daan Pattinasarany, on the same occasion, said that the volume of road infrastructure developments since 1990 has decreased. After the 1997 crisis, there was budget increase. The role of the regions has also increased along with decentralisation.

Inflated costs
But, in fact, the quality of road infrastructure has deteriorated. Transportation costs have swollen. The average travel time for a distance of 100km in Indonesia is 2.7 hours. In contrast, it is only 1.2km in China and only 1.3 hours in Thailand.

Chairman of the Indonesian Employers Association, Sofjan Wanandi, opined that the poor quality of infrastructure has led to the plummeting of Indonesia’s competitiveness. In other countries, the portion of logistics costs is only five to six percent of the total cost, but in Indonesia it reaches 14 - 15 percent.

As a result, Sofjan continued, many entrepreneurs have chosen to import goods, rather than to produce domestically. The consideration is that the selling prices of imported goods are cheaper than producing them [at home].

Head of Sub-Directorate for Regional Financial Capacity Development of Bappenas, Wariki Sutikno, stated that the [central] government's role in the development of regional infrastructure is exercised through the special allocation fund (DAK).

Currently, its average portion is eight percent of local revenues. DAK allocation in 2012 amounts to Rp 16.1 trillion, while for next year it is budgeted at Rp 29.2 trillion. (LAS/OSA/REN)