Seven Regional Heads Agreed on the Use of Cash Transfer Schemes for Infrastructure Financing in the Region
On Friday, 12 May 2017, the Minister of Finance held a meeting with seven Regional Heads at the Head Office of the Ministry of Finance to discuss the synchronization and synergy of infrastructure provision policy between the Central Government and Local Government. Recently, the Central Government has been encouraging the use of Public Private Partnership (PPP) as the financing scheme policy in the infrastructure provision.
It aims to ensure the availability of better, more sustainable and affordable public services. In addition, the use of the KPBU scheme by the Government is also intended to bridge the gap that has risen from the limitations of APBN / APBD and high infrastructure needs. National Medium Term Development Plan 2014-2019 shows that local and state budget were able to finance only 41% of the total infrastructure needs. Therefore, the Central Government hoped that the Regional Government also encourages the use of the PPP as a financing scheme in the infrastructure provision in the regions.
The meeting was attended by Minister of Finance, Mayor of Bandung, Mayor of Surabaya, Mayor of Tangerang, Mayor of Semarang, Mayor of Makassar, Mayor of Pekanbaru, Sidoarjo Regent, and President Director of PT Sarana Multi Infrastruktur (Persero).
"We invited 7 heads of this region in order to convey and at the same time hear. How important these cities are as the center of economic growth, how important are the roles of these cities to create employment opportunities, increase investment and also in this case the need to build infrastructure caused by the urbanization and development of the city that cannot be postponed. So in this case we will cooperate with seven Mayors and Regent to directly handle the projects that have been nominated to become PPP projects, which are projects that enable collaboration between the government and business entities and will be supported through various instruments that we have, "said the Minister of Finance at Djuanda Hall of the Ministry of Finance, Friday (12/05).
Subsequently, each head of region submitted the prioritized project development plan and the project selection consideration as well as the constraints faced in the provision. Each regional head was committed to support and encourage the use of the PPP scheme in the infrastructure provision in the regions and understood the challenges that must be solved, among others, capacity building for project implementers in the local government and commitment to ensure the preparation of PPP projects can be effective, efficient, transparent and professionals.