Accelerate Infrastructure, 2021 Investment Financing Budget Increased
JAKARTA, KOMPAS — (08/25/2021) The government has raised its investment financing projection for 2021 to Rp 204.5 trillion. Additional investment financing will be taken from the reserve fund for the national economic recovery program and the rest of last year’s budget.
In a working meeting with the House of Representatives Commission XI earlier this week, Finance Minister Sri Mulyani Indrawati said the government would add investment financing from the use of reserves for the national economic recovery program (PEN) of Rp 32.9 trillion and the use of the remaining 2020 budget surplus (SAL) of Rp 16.9 trillion.
“With the additional funds, the investment financing outlook for 2021 will be Rp 204.5 trillion, which is above the state budget allocation. The additional focus of the financing will be realized for the completion of strategic infrastructure and help encourage economic recovery.” Sri Mulyani said.
Sri Mulyani detailed that the use of PEN reserves of Rp 32.9 trillion will be used as state capital participation (PMN) in PT Hutama Karya of Rp 9 trillion, PT Waskita Karya (Persero) Tbk Rp 7.9 trillion, Indonesia Investment Authority (INA) Rp 15 trillion, and the Land Bank Agency Rp 1 trillion.
The PMN for Hutama Karya will be used to continue the completion of 4 sections of the Trans-Sumatra Toll Road (JTTS) in Medan-Binjai, namely Binjai-Langsa (Section Binjai-Pangkalan Brandan), Pekanbaru-Dumai and Kuala Tanjung, and Tebing Tinggi-Parapat. Meanwhile, the PMN for Waskita Karya will be used to complete the construction of seven sections of the Trans-Java and Sumatra toll roads.
The PMNs placed in INA will be used to optimize investment value and create jobs, increase foreign investment, and continue financing various infrastructure projects, such as toll roads, ports and airports.
“Meanwhile, the allocation for the Land Bank Agency is Rp. 1 trillion, which is used to meet the initial capital needs of the institution.” Sri Mulyani said.
Additional allocations from SAL, among others, will be placed for Hutama Karya amounting to Rp 10 trillion. The funds will be used to continue the completion of nine JTTS sections in Medan-Binjai, Pekanbaru-Dumai, Binjai-Langsa, Indralaya-Muara Enom, Kisaran-Indrapura, Kuala-Tanjung Prapat, Lubuk Linggau-Bengkulu, Sigli-Banda Aceh, and Pangkalan- Pekanbaru.
“With a total additional state capital investment of Rp 19 trillion for Hutama Karya, 107 kilometers will be built with an additional absorption of 181,077 workers.” Sri Mulyani said.
In addition, Sri Mulyani continued, SAL funds of Rp 6.9 trillion will be given to PT Kereta Api Indonesia (KAI) as support for the completion of railway infrastructure development.
The placement of PMNs in state-owned enterprises is one of the government’s efforts in accelerating infrastructure development. The acceleration of infrastructure development itself is expected to be able to encourage medium and long- term economic growth.
The need for integration
Senior Economist at the Institute for Development of Economics and Finance (Indef), Aviliani, reminded that infrastructure development in a number of regions in the country must be accompanied by integration with regional development programs so that it has a significant impact on economic growth.
“So far, infrastructure development tends to be more concerned with sectoral egos so that in the end infrastructure is only built, but there is no integration regarding its use,” she said.
One of the examples she gave was a port project where the majority of the construction was not accompanied by a sustainable use plan by the local government so that no ships docked at the port.
“This must be corrected because the expenditure for the development is very large and it is very unfortunate if the effect is minimal,” Aviliani said.
She suggested that in the future the central government should first consider the direction of regional development, economic development, human resource development, and market potential before encouraging infrastructure development in a number of regions. (DIM)
Source: Kompas Daily. Edition: Wednesday, August 25, 2021. Rubric of Economics and Business-Fiscal Policy. Page 9.
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