Christina Desy, Fitri Novia Heriani
Indonesia has targeted economic growth of 5.8 percent for the2015-2019 National Mid-Term Development Plan (
Rencana Pembangunan Jangka Menengah Nasional). To realize this, the government is focusing on improving the quality and the quantity of infrastructure in Indonesiaand hasallocatedapproximately IDR 6 Trillion of fund under the State-Budget.
Other than the State Budget, the government is also striving to raise capital from its public-private partnership schemefor infrastructure projects. Started in 2005 with the issue of Presidential Regulation No. 67 of 2005, the public-private partnership scheme has been a common format for infrastructure projects in Indonesia.
Despite some success, the implementation of the scheme is still far from perfect. One issue has been conflicts of interest between the government and the private sectors as the government constantly wishes to keep infrastructure procurement costs to the very minimum, while the private sector wants to maximize profits.
Kuntoro Mangkusubroto, Head of the President's Delivery Unit for Development Monitoring and Oversight (UKP4) notes that this kind of conflict can hamper improvements to targeted infrastructure.Mr. Mangkusubroto asserts the importance of negotiation between the government and the private sectors to prevent misunderstandings which may result in cost accretion.
Another obstacle is a lack of good cooperation amongparticipating institutions under the scheme, especially cooperation between the central and regional governments. In this regard, Mr. Mangkusbroto is urging the government to strengthen the management of public-private partnerships and start to implement the scheme as an offer to attract funds from the private sector.
Sharing Mr. Mangkusubroto’s view, Luky Eko Wuryanto, Deputy of the Infrastructure Department at the Coordinating Ministry for Economic Affairs, also believes that the public-private partnership scheme has an important role assist overcoming challenges for infrastructure financing. Itis important that the government iswise in choosingprojects for the public-private partnership scheme. If done properly, Mr. Wuryanto expects that the government will be able to meet public expectations for future infrastructure development.
(hot/kc)
Christina Desy, Fitri Novia Heriani
Indonesia has targeted economic growth of 5.8 percent for the2015-2019 National Mid-Term Development Plan (
Rencana Pembangunan Jangka Menengah Nasional). To realize this, the government is focusing on improving the quality and the quantity of infrastructure in Indonesiaand hasallocatedapproximately IDR 6 Trillion of fund under the State-Budget.
Other than the State Budget, the government is also striving to raise capital from its public-private partnership schemefor infrastructure projects. Started in 2005 with the issue of Presidential Regulation No. 67 of 2005, the public-private partnership scheme has been a common format for infrastructure projects in Indonesia.
Despite some success, the implementation of the scheme is still far from perfect. One issue has been conflicts of interest between the government and the private sectors as the government constantly wishes to keep infrastructure procurement costs to the very minimum, while the private sector wants to maximize profits.
Kuntoro Mangkusubroto, Head of the President's Delivery Unit for Development Monitoring and Oversight (UKP4) notes that this kind of conflict can hamper improvements to targeted infrastructure.Mr. Mangkusubroto asserts the importance of negotiation between the government and the private sectors to prevent misunderstandings which may result in cost accretion.
Another obstacle is a lack of good cooperation amongparticipating institutions under the scheme, especially cooperation between the central and regional governments. In this regard, Mr. Mangkusbroto is urging the government to strengthen the management of public-private partnerships and start to implement the scheme as an offer to attract funds from the private sector.
Sharing Mr. Mangkusubroto’s view, Luky Eko Wuryanto, Deputy of the Infrastructure Department at the Coordinating Ministry for Economic Affairs, also believes that the public-private partnership scheme has an important role assist overcoming challenges for infrastructure financing. Itis important that the government iswise in choosingprojects for the public-private partnership scheme. If done properly, Mr. Wuryanto expects that the government will be able to meet public expectations for future infrastructure development.
(hot/kc)