Indonesia Drops a Dozen Infrastructure Projects

Indonesia, railways, airport, tollroads, infrastructure

an artist vision of the Balikpapan-Samarinda tollway in East Kalimantan.

To slow, to costly: the government decided to drop 14 important infrastructure projects due to the lack of progress and the lack of interest of investors. A real set-back for President Jokowi administration which has named infrastructure development a top priority of its presidential mandate…

Strong winds are blowing to the face of Indonesian President Joko Widodo. The former Jakarta governor had promised to make his presidency a turning point in the history of the world largest’s archipelago. And in a way, it succeeded but not on a positive way. For example, rampant radicalisation of more and more Muslim Indonesians is gaining ground and is now threatening to destroy the social fabric of the country, which was based on relative tolerance of every race, ethnic and religion. The government is only now realizing the damage created by radical behaviour but the reaction seems already to late…

Another important task for Joko Widodo was to speed up infrastructure development in the country to help Indonesia being on pair with its neighbours in Southeast Asia. Tollways, railways, new airports were planned to let Indonesia reducing its transportation cost and making it more competitive.

They have definitely been some progress since Jokowi became president in 2014. Among its achievements was the opening of new airports or air infrastructures in Medan, Jakarta, Balikpapan and Kertajati in West Java. The government was also planning to develop 1,000 km of tollroads with some such as Medan-Kuala Namu- Lake Toba in North Sumatra, Semarang-Solo in Central Java or Balikpapan-Samarinda in East Kalimantan being already completed or on the verge of being achieved. In total, 10 projects turned operational in 2017.

However, many projects have been delayed as acquisition of land is turning into a real nightmare, considerably slowing down progress on infrastructure construction. As an example, in Yogyakarta, a desperately needed new international airport, is delayed by at least two years due to owners who refuse to sell their land to the State. Land acquisition for the New Yogyakarta International Airport, to be located in Kulon Progo and scheduled to start operations in March 2019 (but we assume that this project will require more time), was only completed in early March of this year. Which is likely to push back the opening to 2021.

Related image
New Yogyakarta Airport in Kulon Progo

Indonesia Committee for Acceleration of Priority Infrastructure Delivery (KPPIP) announced then on Wednesday that the President has accepted its report on the evaluation of the National Strategic Projects (PSN), which recommends dropping 14 infrastructure projects worth Rp 264 trillion (US$19.18 billion).

The committee recommends maintaining 222 projects on the PSN list, from the initial number of 245. The estimated investment value for the projects and programs reached Rp 4.1 quadrillion.

The committee highlighted the fact that these 14 projects lost their status because they no longer met the criteria set by the KPPIP to see their construction starting before the third quarter of 2019.

“Based on the evaluation with operational and championing criteria, the KPPIP proposes that 14 projects be delisted from PSN status because they did not meet our requirement to begin construction in the third quarter of 2019,” the committee said in a press statement received by Indonesian newspapers last Tuesday.

The committee published the list of the 14 projects which lost their priority status.

1. Waru (Aloha) – Wonokromo – Tanjung Perak toll road in East Java

2. Sukabumi – Ciranjang – Padalarang toll road in West Java

3. Kertapati – Simpang – Tanjung Api-Api railway in South Sumatra

4. Muara Enim – Pulau Baai railway in South Sumatra and Bengkulu

5. Tanjung Enim – Tanjung Api-Api railway in South Sumatra

6. Jambi – Pekanbaru railway in Jambi and Riau

7. Jambi – Palembang railway in Jambi and Sumatera Selatan

8. A railway project in East Kalimantan

9. East-West Mass Rapid Transit in Jakarta

10. Sebatik Airport in North Kalimantan

11. Clean Water project in North Sumatra

12. Telaga Waja Dam in Bali

13. Pelosika Dam in Southeast Sulawesi

14. Merauke Special Economic Zone in Papua.

Among the delisted projects are three very important infrastructures: the Jambi-Palembang railway, which was due to connect by rail the entire Southern part of Sumatra, the first rail link in Borneo in the province of East Kalimantan and the East-West Rail Transit in Jakarta, which would have helped reducing traffic congestion in the Indonesian capital.