JAKARTA. The government is evaluating a number of infrastructure projects financed by foreign loans as part of its program to reduce foreign debts in the country’s development plan.Public Works Minister Djoko Kirmanto said in Jakarta on Tuesday that the projects being evaluated were those already listed in the government’s bluebook, which contains the annual infrastructure development plan. “The infrastructure projects being evaluated are considered crucial to support economic growth and are also important in providing public services. These projects usually cannot be funded by the private sector because they are not cost recoverable,” Djoko said. Meanwhile, Finance minister Agus Martowardojo said that the main goal of the evaluation was a follow up for President Susilo Bambang Yudhoyono’s recent call on the need to reduce the use of foreign loans in the government’s projects.Eventually, the government would try to reduce infrastructure project funding dependency on foreign loans and would further develop several other financing schemes, Agus said.“The first alternative is to use full private funding, but the majority of the projects are very costly and ideally, we can further develop public private partnership [PPP] schemes, in which the government prepares all the necessary tender documents and feasibility studies and offers the projects to private investors,” he said.Another alternative, according to Agus, was to fully optimize the state budget allocation for infrastructure projects. But to do this, it is crucial for the ministries and state institutions to continuously develop their human resource capacities for project preparations.“Most of the foreign loans come with requirements that do not build national capacity because donor countries usually also incorporate their technical assistants, design preparation and manpower as part of the loan agreement,” Agus said.“Eventually, ministries and state institutions will lack the confidence to be fully independent and to develop their own infrastructure projects ... They will prefer foreign loans and let donors to do all the work,” he added. (Hans David Tampubolon/ The Jakarta Post)
Govt evaluates foreign debt-funded projects
JAKARTA. The government is evaluating a number of infrastructure projects financed by foreign loans as part of its program to reduce foreign debts in the country’s development plan.Public Works Minister Djoko Kirmanto said in Jakarta on Tuesday that the projects being evaluated were those already listed in the government’s bluebook, which contains the annual infrastructure development plan. “The infrastructure projects being evaluated are considered crucial to support economic growth and are also important in providing public services. These projects usually cannot be funded by the private sector because they are not cost recoverable,” Djoko said. Meanwhile, Finance minister Agus Martowardojo said that the main goal of the evaluation was a follow up for President Susilo Bambang Yudhoyono’s recent call on the need to reduce the use of foreign loans in the government’s projects.Eventually, the government would try to reduce infrastructure project funding dependency on foreign loans and would further develop several other financing schemes, Agus said.“The first alternative is to use full private funding, but the majority of the projects are very costly and ideally, we can further develop public private partnership [PPP] schemes, in which the government prepares all the necessary tender documents and feasibility studies and offers the projects to private investors,” he said.Another alternative, according to Agus, was to fully optimize the state budget allocation for infrastructure projects. But to do this, it is crucial for the ministries and state institutions to continuously develop their human resource capacities for project preparations.“Most of the foreign loans come with requirements that do not build national capacity because donor countries usually also incorporate their technical assistants, design preparation and manpower as part of the loan agreement,” Agus said.“Eventually, ministries and state institutions will lack the confidence to be fully independent and to develop their own infrastructure projects ... They will prefer foreign loans and let donors to do all the work,” he added. (Hans David Tampubolon/ The Jakarta Post)