Newsmaker Interview: Wahyu Utomo
Implementing and coordinating the government’s infrastructure drive
By Gilang Ardana and Karmila Bain
Friday, March 10, 2017
When President Joko Widodo took office, he pledged that infrastructure would be his top priority. Slowly but surely, we have seen progress in infrastructure development, but it has not been easy. Much credit goes to the Committee for Acceleration of Priority Infrastructure Delivery (KPPIP), which works tirelessly to make such projects run smoothly.
KPPIP is the government body for infrastructure tasked with coordinating the many sticky issues that arise among various stakeholders involved in complex projects.
Led by the Coordinating Minister for Economic Affairs, the committee consists of the ministers of finance, agrarian affairs and spatial planning, environment and forestry, the head of the National Development Planning Agency (Bappenas), and the Coordinating Minister for Maritime Affairs. KPPIP acts as the point of contact to in debottlenecking strategic and priority projects. It currently handles 30 priority projects in infrastructure, including the MRT Jakarta, the Batang Power Plant and the Palapa Ring project for high-speed Internet connectivity.
AmCham Indonesia met with Wahyu Utomo, head of the KPPIP’s implementation team, to find out more about what goes on behind the scenes as it works to accelerate infrastructure development.
AmCham Indonesia: Can you tell us more about the KPPIP and the story behind its establishment?
Wahyu Utomo: The KPPIP was formed in 2014 by revitalizing the former National Committee for the Acceleration of Infrastructure Provision, which was considered ineffective because of its big membership. The new body was introduced with several changes: to focus only on priority projects which will help to mobilize other sectors; simplify the membership to consist of only four ministries as the core team; and its tasks were expanded, ranging from project preparation, to financing, tendering and debottlenecking.
The Coordinating Minister for Economic affairs assigned 30 priority projects to be our core focus. We do monitoring and debottlenecking and help with all of the needs of the projects. For example, the Serang-Panimbang highway project did not have funds for an AMDAL [Environmental Impact Assessment] and we helped the project get the financing. We also helped Kuala Tanjung port to complete its project study requirement.
In 2016, the president released the full list of 225 national strategic projects. We’ve been assigned to monitor and evaluate all of these projects.
What were the criteria used for the selection of the 30 projects?
In terms of size, it should be Rp500 billion minimum. It should have a positive impact at both regional and national level and it should have cross-linkages to other sectors. We also ask for a plan for project financing, as we determine which plan is doable.
What are the key factors hindering infrastructure development in the country? What has KPPIP done about them?
We’ve done a study and found that 40 percent of the total problems are land-related. Although we already have a new Land Law and its implementing regulations, on the ground the legislation is still taking time to be fully implemented. It is our job, together with the spatial planning ministry to provide assistance in the land acquisition process, especially when it comes to the dispute settlement process by the courts – we should provide the judge with an understanding of the implementation of the new law.
The second and third problems are licensing and financing. Related to financing, we should be aware that our state budget is very limited, especially with the current global economic situation. We emphasize the need to start partnering with the private sector on this. We have done this with the Batang Power Plant; it is the first public-private partnership [PPP] in Indonesia’s the power sector. KPPIP will continue to make sure that we accelerate the closing of financing so that the construction [of the priority projects] can be done as soon as possible. We also engage with SMI/Sarana Multi Infrastruktur [a state-owned infrastructure financing enterprise] and Bappenas on financing issues.
The last problem we identified concerns spatial planning. In order to continue with project construction, we need to get a document from the RT/RW [community group heads] for the spatial planning. However, sometimes the targeted project is not yet listed on the RT/RW planning document and they are only allowed to revise it once every five years. We facilitate releasing the recommendation letter ahead of starting the project so construction is in line with spatial planning, so when the RT/RW adjusts the document they can accommodate it.
How are the preferences for project financing set? Has the government set a priority for private financing?
We did actually explore private financing, but sometimes the project is very urgent so we cannot wait for long to go through private financing schemes, especially to provide thorough studies, which take a long time.
But that is the past, we are already exploring financing from SOEs [state owned enterprises] and PPPs. Sometimes SOEs have limits as well, so it makes sense to pursue PPPs. Currently we have three PPP projects: electricity, water and fiber optic. For the 30 priority projects, we continue to find innovative funding schemes, and we consider all options. Currently the ratio is 60 percent from the state budget and 40 percent from private financing.
In general, what is the progress of the KPPIP priority’s projects?
From 225 National Strategic Projects [PSN], 20 are already finished. We have also completed 7,000-ish megawatts out of the 17,000 megawatts in our assigned electricity projects. Regarding the 30 priority projects, even though each project status is different, they have all made significant progress. We have also started construction of the Trans Sumatra highway and the Bontang Power Plant.
What’s next for the KPPIP?
We will continue working, as always. We will make sure that plans are running as they are, with no delays. We hope that this can inspire other stakeholders, especially ministries and regional governments, in the way they run infrastructure projects. We hope also to further develop the capacity of government, not just improve project financing.