Infrastructure development: Reshuffling strategic projects
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 - Pembangunan infrastruktur: Kocok ulang proyek strategis
7 October 2023
By: Maria Elena & Akbar Evandio
Jakarta - The government is removing several projects from the list of national strategic projects (PSNs). Some of the projects that have been removed have not commenced as the funding is unclear.
Coordinating Minister for Economic Affairs Airlangga Hartarto said that the PSNs that will be removed included Ambon New Port that will be constructed at the border of Waai Village and Liang Village in Salahtu District on Ambon Island worth Rp5 trillion that will use the public-private partnership (PPP) scheme.
Then, other projects that will be removed from the list of PSNs include the industrial estate in Tanggamu Regency and several settlement projects from the Public Works and Housing (PUPR) Ministry that include the raw water project in Bali Province.
Other projects from the PUPR Ministry that will be removed are Kisaran-Rantauprapat toll road, Langsa-Lhokseumawe toll road, Lhokseumawe-Sigli toll road, and Dumai Sigambal-Rantauprapat-Muara Enim toll road.
Besides that, other projects that will be removed from the list of PSNs include drinking water provision system (SPAM) projects that include Djuanda SPAM, Jatigede SPAM, and Kamijoro SPAM.
“All of them will be removed from [the list of] PSNs as the offtakers do not agree with the finances,” he said as quoted on Friday (6/10).
On the other hand, there are several PSNs with nomenclature changes. For example, financing for the construction of Jambi-Rengat toll road changed as it has been provided a loan from Asian Infrastructure Investment Bank (AIIB) worth Rp23 trillion.
Then, there is Probolingo-Banyuwangi toll road that will be continued using the PPP scheme. There is also the expansion of Batang Industrial Estate and East-West Jakarta MRT.
The grassroot refinery project or Tubang Refinery will be appointed a new investor. Its previous investor is from Russia, but they are currently struggling due to the invasion of Ukraine.
Until early October 2023, there were 170 PSNs worth Rp1,299.41 trillion with 61 projects still in construction. From the amount, until 4 October 2023, there were 17 projects worth Rp259.41 trillion.
Until the end of this year, 16 projects worth Rp179.46 trillion are set to be inaugurated and completed.
The number of projects that will be completed until 20 October 2024 reach 25 projects worth Rp151.58 trillion, which consist of industrial estates, airports, Benoa Tourism, toll roads, and various Islamic universities.
From October to December 2024, there are 12 projects worth Rp23.45 trillion. On the other hand, there are 42 projects with an estimated investment value of Rp1,427.36 trillion that are predicted to be completed in 2025. The government is committed to completing various projects optimally.
On the other hand, Fiscal Balance Director General of the Finance Ministry Luky Alfirman asked regional governments to construct supporting infrastructure around PSNs. According to him, PSNs will not provide an optimal benefit if they are not supported by regional government policies.
Next Article: IIF taps EDC to strengthen infrastructure financing
