Indonesian Infrastructure: Coming from behind

As of 27 August, the Public Works Ministry had disbursed only 28% of its 2015 budget of IDR118.5tn, lower than the 44% level for the same period in 2014, which can largely be attributed to late budget discussions and ministerial restructuring. The Public Works Ministry acknowledged that it is behind in disbursing this year’s budget, but it still expects to disburse 93% of the total budget (exhibit 1) by year-end.

To do so, the ministry plans to accelerate payments on existing multi-year contracts (MYCs), especially for dam construction, while increasing the number of shifts and workers on the projects. Historically, the Public Works Ministry has disbursed only 90-95% of its budget, as the tendering process resulted in lower-than-expected project costs. Thus, the ministry plans to utilize the leftover budget to finance unfinished single-year projects.

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