President Jokowi Appreciates New Funding Schemes for Development Projects

President Jokowi delivers his remarks at the Financial Closing Event of PINA 2017, at the State Palace, Jakarta, Friday (17/2)(Photo by: Public Relations Division/Rahmat)

President Joko ‘Jokowi’ Widodo appreciated breakthroughs in the funding mechanism for infrastructure projects such as the Non Government Budget Investment Financing (PINA), which complements the already existing Public Private Partnership (PPP) funding scheme.

“I welcome the financial closing of a toll road project done by PT Waskita (construction service firm) as the first project that adopts the PINA scheme. I hope this can be a good start as it will accelerate the project, which is worth Rp70 trillion,” the President said in his remarks at the Financial Closing Event of the 2017 Non-Budget Government Investment Financing at the State Palace, Jakarta, Friday (17/2).

President Jokowi admitted that if the Government depends only on the State Budget, development projects would not be done fast due to the limitation of the Budget. Therefore, the President said, special schemes such as the PPP, limited mutual funds, etc have to be used.

He cited the example of PT. Taspen (pension insurance firm), which now participates in infrastructure development; so it can now support PT SMI (state-owned infrastructure financing company, PT. Sarana Multi Infrastruktur/SMI) to strengthen the existing equity.

“I suppose we have to adopt these schemes. There will be many infrastructure projects that used to depend on the State Budget but now no longer depend on it. It can be pure investment, the PPP, or the KPBU (government-to-business cooperation), or we can use other schemes,” the President said.

President Jokowi added that he has told Minister of National Development Planning/Head of the National Development Planning Board (Bappenes) so infrastructure projects that have been undertaken by state-owned enterprises and those who have been completed, from greenfield projects into brownfield projects, to release the projects through securitization so the State can get more money.

“And what is the money for? To build infrastructures in other locations. So once the project is done, it’s not to be enjoyed every week or every month. That’s not the task of state-owned enterprises. The task is to build as many as infrastructures as possible all over the country,” the President said, adding that such a pattern has been implemented by Waskita Karya through its subsidiaries and other state-owned enterprises.

President Jokowi hopes that in the future, this kind of funding scheme can also be implemented not only for toll road project but also in other projects such as seaports, airports, energy, power plants, oil refineries, and others.

“Take a project in Umbulan (Pasuruan, East Java, red), for example. I have no idea for how many years the project has been stopped. Now the project has begun again by using the PPP scheme. I suppose to tackle such issues, we have to find breakthroughs outside ways and mechanisms that we’ve often implemented or enjoyed. Once again, we have to get out of this comfort zone,” the President said.

Therefore, President Jokowi hopes that all related ministries and institutions to always collaborate in using funding schemes.

“I will always monitor, follow, and evaluate the implementation of the PINA and KPBU schemes. We have to find out what the barriers are, we have to find out what the pluses and minuses are thus we will continue to improve the scheme,” the President said.

Also attending the event were Vice President Jusuf Kalla, Minister of National Development Planning/Head of the National Development Planning Board (Bappenas) Bambang Brodjonegoro, Cabinet Secretary Pramono Anung, and Head of Investment Coordinating Board (BKPM) Thomas Lembong.  (FID/RAH/ES) (EP/YM/Naster)