Wednesday, 11 March 2015

Government Of Indonesia Sets Slight Increase For BUMNs Spending

Jakarta, Indonesia – The government of Indonesia plans to inject RP 73.08 trillion for 42 state-owned enterprises (BUMNs or Badan Usaha Milik Negara), just above the RP 72.9 trillion budget last year.
Governor Basuki “Ahok” Tjahaja Purnama said during a speech that the city administration hoped to perform better in 2015 than it did last budget year, which percentage-wise saw the lowest in spending and revenue. Only 59% of the 2014 allocated budget was spent last year, causing the slight increase. The budget was far from the RP 82 trillion which Ahok had predicted.
This was discussed on a business meeting between the government and Commission XI of the House of Representatives in Jakarta on January 28. In the 2015 State Budget (APBN), the capital injection to BUMNs was budgeted at Rp 5.1 trillion for four state-owned companies. In the 2015 RAPBN-P, the allocation has been increased to Rp 72.9 trillion for 42 BUMNs.
The objective is to enable business entities, which represent an arm of the government to realize the vision and mission of the president in building infrastructure. However, many construction companies have complaints if these goals are all materialized.
Kadin Jakarta chairman Eddy Kuntadi said during a discussion on Jakarta’s economic outlook recently that it was important for the city administration to optimize budget spending, especially when related to infrastructure projects. He stated that it would be better to optimize the budget. The positive economic growth of exporting countries will have a good effect on export activities provided that the budget be put into the right cause and not on scams made by corrupt officials. Better transportation infrastructure also minimizes cost in the long run.
One reason for the slow spending is the introduction of a new procurement system, where a procurement body — the Goods and Services Procurement Agency (ULP) — handles almost all procurements previously carried out by city agencies. Many big transportation and flood mitigation projects like toll road construction, road maintenance, public bus procurement and river dredging were halted.
The government also admitted that despite the continuous growth in the industry, the administration barely conducted infrastructure projects last year and many business owners did not receive any projects from the city administration.
This year, with a lot of construction showcase and shows to be held all over the country, the public is expecting that the budget be maximized.
The Concrete Show South East Asia to be held in Jakarta, Indonesia on the 28th – 30th of October is only one of the many events anticipated to boost the infrastructure industry. Global and local engineers, project managers, business owners and construction companies like Axis Capital Group is to participate the said event.

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