2025 budget cuts: 21 projects to be affected by efficiency
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Pemangkasan anggaran 2025: 21 proyek bakal terdampak efisiensi
7 February 2025
By Alifian Asmaaysi
Due to the budget efficiency measures in 2025, the Public Works Ministry must delay at least 21 infrastructure development projects, as its budget has been reduced from Rp81.38 trillion to Rp29.57 trillion.
Public Works Minister Dody Hanggodo stated that the budget efficiency is part of the implementation of Presidential Instruction Number 1/2025 on Budget Efficiency in the Implementation of the State Budget and Regional Budget for Fiscal Year 2025.
"The budget ceiling in the Budget Implementation List (DIPA) has been reduced from Rp110.95 trillion by Rp81.38 trillion to Rp29.57 trillion," he explained during the work meeting with House of Representatives (DPR) Commission V on Thursday (6/2).
The 21 projects that will be postponed include connectivity, water resources, and human settlements projects. Dody explained that the development budget for the Water Resources Directorate General will be cut by Rp27.72 trillion, and the Highways Directorate General by Rp24.83 trillion.
Additionally, the development budget for the Human Settlements Directorate General will be cut by Rp7.75 trillion, and the Strategic Infrastructure Directorate General by Rp20.69 trillion.
Several projects that will be postponed due to the budget efficiency measures of the Public Works Ministry include 14 dams, the construction of 9,550 hectares of irrigation, and the rehabilitation of 29,000 hectares of irrigation networks.
Additionally, there is the routine preservation of roads spanning 47,603 km and bridges spanning 563,402 m.
Dody will also review several infrastructure development projects that are not prioritised, including those with single-year and multi-year contracts funded by pure rupiah.
Additionally, Dody aims to cancel the purchase of new heavy equipment intended to support national infrastructure development.
Moreover, the Public Works Ministry will limit domestic and overseas business trips, significantly reduce office equipment expenditure, and eliminate all ceremonial activities.
"[I will also] eliminate expenditures related to public relations, such as the printing of banners and seminar kits. Office maintenance and vehicle purchases will be made more efficient. The same applies to non-operational expenditures, such as honorariums, analytic studies, and others," he emphasised.
Regarding the Nusantara Capital City (IKN) project in East Kalimantan, Dody stated that no new projects have been tendered due to the Public Works Ministry's budget efficiency measures, which amount to Rp81 trillion.
"All our budget is blocked. Why are you asking about progress? There is no budget. The progress is that lunch has been purchased. That is the progress," he added.
Currently, the Public Works Ministry is preparing its budget allocation and focus as Eid approaches.
However, Dody affirmed that the IKN development will not be affected. If the budget is insufficient, he will request President Prabowo Subianto to increase the budget ceiling for IKN.
He noted that the Public Works Ministry spent a budget of Rp40.29 trillion on IKN throughout 2024, with physical progress reaching 87.9%.
Meanwhile, DPR Commission V Member from the PDID Fraction, Adian Napitupulu, criticised the significant budget efficiency measures of the Public Works Ministry, calling them nonsense, as they will only be able to construct 63 km of roads in a year.
He added that the government’s plan to achieve food self-sufficiency is difficult amid the lack of budget for the development of irrigation areas.
"For instance, the budget for water resources is Rp10.7 trillion. Regarding food security, irrigation network rehabilitation only covers 16,000 hectares, and many other targets will not be realised," he added.
DPR Commission V Deputy Chair from the Nasdem Fraction, Robert Rouw, believes that the efficiency measures are not in line with the commitment to developing infrastructure in villages.
Therefore, Robert requested the meeting to approve an indicative budget following the reduction, with the remaining budget of the Public Works Ministry amounting to Rp29.57 trillion.
DPR Commission V Chair, Lasarus, emphasised that he will only approve an indicative budget after the budget reduction. Meanwhile, the allocation will be discussed in detail at another meeting.
"The meeting must focus on our primary discussion points. We will first address the indicative budget and approve it before moving on," he emphasised.
Lasarus also mentioned that he did not approve the Public Works Ministry's budget reduction of Rp81 trillion.
"If you ask me if I agree with reducing the budget of the Public Works Ministry by that much, I 1,000% do not agree. However, it is not within my authority as I am not the President. We will leave this issue with the government," Lasarus stated.
Next article: Public Works Ministry ensures no stalled projects
