Allocating budget for infrastructure

Adequate infrastructure, including connectivity, is vitally important for economic development and prosperity of the country.

As a country of more than 17 thousand islands, Indonesia needs to build connectivity to facilitate its inter-island, inter-provincial and intercity transportation systems and to support its economic development and growth.

“Sea, land and air connectivity has a positive impact on the countrys economic growth,” legislator Fauzih Amro of Commission V on transportation of the House of Representatives (DPR) said in a written statement in Jakarta on Thursday (August 18).

The government in its Draft 2017 State Budget (RAPBN 2017), therefore, allocated Rp346.6 trillion for infrastructure development, Rp29.5 trillion more than the Rp317.1 trillion worth of allocation set in the Revised 2016 State Budget (APBNP 2016).

In its RAPBN 2017 and the related Financial Note documents released on Thursday, the government classified infrastructure development into three main groups, namely, economic infrastructure, social infrastructure and supporting infrastructure.

Budget for economic infrastructure will, in general, be used to build infrastructure facilities needed to ensure smooth flow of goods and services as well as to accelerate the production process.

Various activities, including those of the ministries/government agencies, transfer to regions, village finds and budget financing which, among others, are related to transportation, irrigation, telecommunications and informatics, are classified as being part of economic infrastructure.

Allocation for economic infrastructure is Rp336.9 trillion in the RAPBN 2017. Of this amount, Rp161 trillion is allocated through the ministries/government agencies expenditure through the Public Works Ministry, the Transportation Ministry, the Energy and Mineral Resources Ministry and the Agriculture Ministry.

Also, some Rp2.7 trillion of the Rp336.9 trillion will be channeled through the state general treasury (BA BUN) in the form of a viability gap fund (VGF) and a grant fund for various regional infrastructure activities, while Rp133.7 trillion will be allocated in the form of a Special Allocation Fund (DAK) for various infrastructure related-fields (such as transportation, roads, irrigation, drinking water, sanitation and village energy development) and village funds for infrastructure development.

The remaining Rp39.5 trillion will be provided in the form of a government investment in housing financing liquidity facility (FLPP) and a government participation fund in state-owned companies (BUMN). This is in an effort to increase the role of BUMN in creating multiplier effect for development.

In the meantime, the social infrastructure is to receive an allocation of Rp5.5 trillion in the RAPBN 2017 for infrastructure development funding in the education sector, such as the development and rehabilitation of schools and classrooms.

The infrastructure support in several ministries/government agencies gets an allocation of Rp4.2 trillion in the RAPBN 2017 in the form of, among others, land cultivation funding program, industrial zone development, investment climate improvement and infrastructure-related policy coordination.

Regarding connectivity, 815 kilometers (km) of new road sections, 9,399 meters of bridges and 550 km railway tracks (first phase) are to be built apart from the construction and expansion of 55 new seaports and 14 airports.

Infrastructure development in the field of food sovereignty will cover developing tertiary irrigation networks for 200 thousand hectares of rice fields and adding 144,614 hectare worth of new area for rice cultivation.

The target in the energy sector is to provide 64,200 gas connections to households in cities and to set up 128 new and renewable energy-based power plants.

The infrastructure development in the housing, drinking water and sanitation sector is aimed at building 11,400 flats, upgrading the quality of 113,300 privately built houses and installing 491,520 drinking water connections in villages.

As was reported earlier, the government is currently accelerating the development of infrastructure projects in various regions in an effort to strengthen national connectivity to boost the countrys economic activities.

“Over the past two years, the government has been accelerating the construction of national roads covering 2,225 kilometers (km); toll roads, 132 km; and 160 bridges spanning 16,246 meters,” President Joko Widodo noted in his State of the Nation Address at the plenary session of the DPR in Jakarta on Tuesday (Aug. 16).

The president revealed that the government had set a target to build 703 km of national roads and 8,452 meters of bridges in 2016.

The construction of railways is being carried out not only in Java but also in Sumatra, Kalimantan, and Sulawesi. Until now, the length of railway tracks that have been operational has reached 5,200 km spoor (kmsp).

In 2015, he noted that the construction of 179.33 kmsp of railway tracks was completed, and 271.5 kmsp of tracks are under construction. Moreover, the government is currently building urban railway transportation systems, such as Mass Rapid Transport, Light Rail Train, and a commuter line.

With regard to railways, Transportation Minister Budi Karya Sumadi has called to increase the contribution of urban transportation systems from 10 percent to 25 percent.

“As its contribution is still small or just 10 percent, we hope trains would be able to contribute 25 percent to the transportation systems,” Budi remarked during a visit to the Manggarai Railway Station in Jakarta on Wednesday (Aug. 10).

Source: Antara News