Remarks of President of the Republic of Indonesia on Reflection and Notes on 10 Years of Administration in Construction, Infrastructure, and Investment at the Auditorium of Bank Mega Tower, Jakarta, July 31, 2024
Bismillahirrahmanirrahim.
Assalamu’alaikum warahmatullahi wabarakatuh,
Good afternoon,
May prosperity be upon us all,
Om swastiastu,
Namo Buddhaya,
Greetings of Virtue.
Distinguished Ministers of the Indonesia Onward Cabinet, Acting Governor of Jakarta;
Distinguished Chairperson of the Central Executive Board of the Indonesian National Construction Association (BPP Gapensi), Mr. Andi Rukman Karumpa, and all board members of the BPP Gapensi;
Distinguished Chairpersons of the Regional Boards of Gapensi throughout Indonesia;
Distinguished Mr. Chairul Tanjung who attends here today;
Ladies and Gentlemen.
From the beginning of my administration ten years ago, the Government has focused on infrastructure development, be it connectivity infrastructure, basic service infrastructure, food infrastructure, energy infrastructure, or industrial infrastructure. We have seen the report of how many big, medium and small seaports, how many airports that had been built. I believe, the Gapensi also has a significant contribution both at the central and regional levels.
What I want to convey is that building infrastructure is not just about constructing concrete structures or finishing projects without bringing any benefits. We know that through infrastructure development, our World Competitiveness Ranking has risen from rank 34th to 27th. Competitiveness is what we want to achieve from the existing developments, in addition to utilizing the infrastructure for the people. Because now we are competing with other countries. If connectivity and infrastructure are inadequate, which investor would want to come to Indonesia? There won’t be any.
Infrastructure is key to attracting investment and reducing logistics costs. Our logistics costs have decreased from approximately 24% to 14%, which has helped lower prices and reduce inflation rates. In the past, our inflation rates were at 8%, 9%, or even 11%, but now it can be suppressed below 3%. In fact, last month it was at 2.58%. So, this development has widespread impacts. It doesn’t just benefit one area but affects many areas.
Now, regarding Gapensi, we will talk about bidding process. It’s about bid prices. Gapensi always involve in the bid prices. From what I know, vendors drop their bidding prices to win a project, right? It’s okay. Competition is good, competing is good, but dropping prices like that is not good. To win projects, the estimated cost is pushed down below 80%. This happens often. Am I right?
Now, when things go on like this, there must be something to sacrifice for, namely the quality. Vendors increase the amount of sand, reduce the cement, decrease the steel, but I believe it will not happen within members of Gapensi. As I mentioned earlier, we should have moved up to a higher level, not just in terms of construction but also the aesthetics, landscaping, and environment. It should be that way. We should not just building concrete.
When I visit a construction site to inaugurate or observe the progress of a project, I always address issues related to landscape, aesthetics, and the environment because these will become very important in the future. So, if the budget is cut, if the estimated cost is cut below 80%, the quality surely will not be good, let alone aesthetics, landscape, or environmentally friendly. Isn’t that right? Since the budget is cut too much, the result must be questionable.
Why did you all applaud?
So, no budget for aesthetics issue. We have to start considering about aesthetics, landscape, and environment.
Therefore, I ask Gapensi as one of the largest construction associations in Indonesia, to produce high quality construction works. There will be more projects. The budget for infrastructure projects is not only in Ministry of Public Works and Public Housing, but also in the Ministry of Transportation, and Ministry of Agriculture.
I just returned from Nusantara two days ago. I see that the main contractors are mostly state-owned enterprises, but the subcontractors are mainly from Gapensi. How do I know? Because I invited the Chamber of Commerce and Industry (Kadin) and the Indonesian Young Entrepreneurs Association (Hipmi) who are involved in the projects. “Sir, I’m from Kadin but I’m also from Gapensi,”; “Sir, I’m from Hipmi but I’m also from Gapensi.” Including those in Commission V of the House of Representatives, many are from Gapensi.
Once again, aesthetics, landscape, and the environment will be priorities at the future administrations.
That concludes my remarks. I also would like to congratulate the new Central Board members of Gapensi of 2029 on their election.
I thank you.
Wassalamu’alaikum warahmatullahi wabarakatuh.
(EST/LW)