PUPR: IKN budget increases by Rp15tn
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.
Investor Daily - PUPR: Anggaran IKN bertambah Rp15 T
1 November 2022
Public Works and Housing (PUPR) Ministry forecasts that the budget for New Capital (IKN) Nusantara development project until 2024 will increase by around Rp15 trillion, thus making the total IKN development budget until 2024 amount to Rp58 trillion.
“From 2022 to 2024, the total is Rp43 trillion. Perhaps for Zones 1B and 1C, there will be an extra Rp15 trillion for two production roads,” said PUPR Minister Basuki Hadimuljono in a press conference at PUPR Ministry Auditorium, Monday (31/10/2022).
Zone 1B is the Government Core Zone (KIPP) which covers education government, and Zone 1C is the KIPP which includes healthcare government. Meanwhile, Zone 1A houses the core government.
Basuki explains that the Rp15 trillion budget addition for KIPP Zones 1B and 1C is intended for building two production roads as an access for the president and investors.
“In this way, in Q1-2023 when the President (directs) investors where to build schools or hospitals, the lots are already mapped out,” he said.
As is the case with KIPP Zone 1A where the lots for Coordinating Ministries, Armed Forces Headquarters and PUPR Ministry, Finance Ministry, and State Secretary Ministry buildings have all been designated. Such lots will also be mapped in KIPP Zones 1B and 1C and operated for commercial purposes.
To date, PUPR Ministry continues to hold a number of IKN project tenders. Most recently, PUPR has just concluded the tenders for State Palace and flag ceremony yard construction project with a Rp1.5 trillion budget ceiling and for Presidential Office Building construction with a Rp1.9 trillion budget ceiling.
Referring to PUPR Ministry’s Electronic Procurement Services (LPSE) data, the State Palace construction project tender is won by PT Pembangunan Perumahan (Persero) Tbk (PTPP) with a bid price of Rp1.3 trillion. Similarly, PTPP also won the Presidential Office Building project tender with a bid price of Rp1.5 trillion.
In addition to the two projects of fantastic value, PUPR has also completed the Rp1.3 trillion construction project tender for Presidential Secretariat Building and Supporting Buildings at the Presidential Palace Area in IKN. The tender in which 182 companies participated was finally won by another Construction SOE issuer, namely PT Waskita Karya (Persero) Tbk (WSKT) with a bid price of Rp1.3 trillion.
Minister Basuki announces that PUPR will sign the contracts for those IKN projects this week.
“The [Presidential] Palace is going to sign the contracts this week. Another tender that has just started is for the drinking water project,” Basuki revealed.
Meanwhile, an IKN project that has entered construction phase is the workers’ housing project. Basuki said that 21 towers have been successfully built.
“There are 21 towers for workers’ housing, so workers are no longer allowed to stay in project shelters. All workers must stay in that housing area,” he added.
In the same vein, PUPR Ministry’s Expert Staff for Technology, Industry, and the Environment, Endra S Atmawidjaja also confirmed that this week, contract signing will be carried out for three IKN projects, namely the presidential palace, presidential office, and presidential secretariat development projects.
“God willing, [the contracts will be signed] on Wednesday or Thursday, depending whether there is any objection or not. In case of no objection, God willing, we can proceed with the contract signing. In fact, the objection period has lapsed and the tender winner has also been determined, so we should be able to carry out the contract signing this week,” Endra concluded.
Must Be Completed
On the other hand, PUPR Minister Basuki discloses that all infrastructure construction projects both National Strategic Projects (PSN) or non-PSN must be completed by H1-2024.
“2023 and 2024 are the two final years for the Advanced Indonesia Cabinet. The President has instructed for all [construction] works to be completed by H1-2024. So, my program is the operation, maintenance, optimisation, and rehabilitation (OPOR) of previously completed projects, such as toll roads, drinking water, and sanitation,” said Basuki.
With the president’s instruction to accelerate project completion, Basuki expects PUPR to be able to fully complete all infrastructure construction works, both PSN and non-PSN, and for the result to benefit the public.
According to Minister Basuki, the president’s instruction also serves as a guidance for PUPR in preparing the criteria for 2023-2024 programs more selectively. Moreover, through Presidential Regulation (Perpres) Number 120 of 2022, PUPR Ministry has also received a special assignment from the president to accelerate the implementation of infrastructure development.
