The Government Encourages The PPP Scheme To Accelerate Infrastructure Provision In IKN

Illustration. (Photo: Doc. Antara)

JAKARTA - The government encourages the use of a cooperation scheme between the Government and business entities (PPP) to accelerate the provision of infrastructure in the capital city of the archipelago (IKN) by socializing three regulations implementing Government Regulation Number 17 of 2022.

The issuance of this implementing regulation is a directive from President Joko Widodo in his State Speech, which states that the core area of the Government Center is indeed built with the State Revenue and Expenditure Budget (APBN), but the rest is 80 percent of private investment invited to participate.

"The involvement of the private sector in financing IKN development must be accompanied by good governance, including ensuring the value of returns on investments made in an accountable, fair and transparent manner," said the Director General of Financing and Risk Management of the Ministry of Finance (Kemenkeu) Suminto in an official statement, quoted from Antara, Friday, February 10.

The three rules referred to are first, Minister of Finance Regulation (PMK) Number 220 of 2022 concerning Government Support for Government Cooperation with Business Entities and Creative Financing in the context of Accelerating Infrastructure Provision in the Archipelago Capital.

Second, the Regulation of the Minister of National Development Planning (PPN)/Head of Bappenas Number 6 of 2022 concerning Procedures for the Implementation of Government Cooperation and Business Entities in the Archipelago Capital.

The third is the Regulation of the Goods/Services Procurement Policy Institute (LKPP) Number 1 of 2023 concerning Procedures for the Procurement of Business Entities through Government Cooperation with Business Entities in the Archipelago Capital.

He explained that the source of funding from the APBN was more focused on providing basic infrastructure and main government complexes, as well as being a catalyst to attract private funds in IKN development.

Sources of funding from outside the APBN need to be optimized both through the implementation of the PPP scheme and creative financing schemes.

The scheme needs to maximize the participation of the private sector and attract non-government sources to participate in the provision of infrastructure in IKN.

In this case, the Ministry of Finance sets rules that can give investors confidence that investment in IKN is an attractive choice through the determination of PMK Number 220 / PMK.08 / 2022.

Support that can be provided and given includes support for preparation facilities and implementation of project transactions, government guarantees, and processing of investment return scheme documents through the availability of services (availability payments).

Meanwhile, LKPP puts forward the concept of easier, faster, and simpler procurement methods which will later be applied in IKN.

Various new methods and innovations have also been added in LKPP Regulation Number 1 of 2023, including the readiness of the KPBU project before the implementation of the procurement (clean and clear) to provide certainty.

This rule will later become a reference for the Person in Charge of Cooperation Projects (PJPK), business actors, and all stakeholders for procurement through the IKN KPBU scheme.

LKPP also includes policies on the use of Domestic Products (PDN) and empowerment of micro and small business actors in implementing the KPBU scheme as a form of support for the government's priority programs in efforts to recover the national economy.

To complement each other, a regulation of the Minister of National Development Planning/Head of Bappenas Number 6 of 2022 was also launched which explained the scope of new regulations, policies and innovations in an effort to accelerate the implementation of the KPBU scheme in IKN, Bappenas support in the implementation of the KPBU scheme in IKN, as well as matters that must be considered in the implementation of KPBU in IKN.

The Ministry of Finance, Ministry of National Development Planning/Bappenas and LKPP continue to synergize in encouraging the acceleration of IKN development in order to realize four pillars in Indonesia's 2045 vision, namely human development and mastery of IPTEK, sustainable economic development, equitable development, and strengthening national resilience and governance.