Infrastructure Needs Rp 1.7 Quadrillion in Private Funding

Infrastructure development financing from 2015-2019 is estimated to reach Rp 4.79 quadrillion. Of this total, the government can only provide funding from the State Budget (APBN) and Regional Budget (APBD) of 41.3 percent, or approximately Rp 1.98 quadrillion. Meanwhile, financing from State-Owned Enterprises (BUMN) accounts for approximately 22.2 percent, or Rp 1.1 quadrillion.

The remaining 36.5 percent, or Rp 1.75 quadrillion, is expected to come from private investment. However, private companies are usually reluctant to undertake infrastructure projects offered by the government for several reasons. A lack of readiness from local governments, convoluted processes, and inconsistent implementation in the field reduce private sector interest in the infrastructure sector.

In the 2017 APBN, the government plans to allocate Rp 378.3 trillion for infrastructure financing, or about 18.6 percent of GDP. The targets include the construction of 838 kilometers (km) of roads, the construction/development of 61 ports, and 71 km of railway lines. Furthermore, the plan includes the construction of 10,198 km of bridges, the construction/continuation of 13 airports, and the construction/continuation of 3 passenger terminals.