Next year, the government plans to allocate Rp 404 trillion (US$30.23 billion) for infrastructure development, according to the draft state budget announced by President Joko “Jokowi” Widodo on Thursday. This year, the government projects to spend Rp 387.70 trillion.
The President explained that 856 kilometers of new roads and 781 kilometers of irrigation channels would be constructed.
“Infrastructure development is expected to boost economic growth and improve connectivity among the regions,” Jokowi said when reading out a financial note during a House of Representatives plenary session.
The government will also develop sanitation infrastructure to manage waste water produced by 853,000 households, construct water treatment plants and develop 7,062 low-cost apartments for low-income families, Jokowi added.
Meanwhile, Public Works and Housing Minister Basuki Hadimuljono said 41.30 percent of the total budget would be spent on road construction and for the maintenance of 46,000 existing roads across the country.
The government has allocated Rp 37 trillion for constructing and repairing irrigation infrastructure -- including 11 new dams, 54,000 hectares of irrigation networks and repairing 160,000 hectares of existing irrigation networks.
For waste water treatment and clean water infrastructure, the government has allocated Rp 16 trillion, the minister added.
“Tenders for the government projects in 2018 will be opened in October this year,” he said, adding that in addition to the projects funded by the state budget, the government would also invite the private sector to develop infrastructure through private-public partnerships (PPPs).
Adang Saf Ahmad, a special staff to Public Works and Public Housing Ministster, said that improving infrastructure was vital for Indonesia to enhance its competitiveness on the global stage.
“Infrastructure is one of the pillars that determine [a country's position on] the competitiveness index. When the competitiveness index score is high, that will contribute to boosting people’s welfare by way of increased productivity and connectivity,” he said in a discussion.
Rising government spending on infrastructure had helped Indonesia ascend in the World Economic Forum’s infrastructure competitiveness index, climbing two places to 60th position in the Index in 2016-17 compared to the previous assessment.