Minister Of Transportation Budi Karya: Makassar - Parepare Railway Project The Fruit Of Non-State Budget Creative Funding

Minister of Transportation Budi Karya Sumadi. (Photo: Doc. Setkab)

JAKARTA - Minister of Transportation (Menhub) Budi Karya Sumadi said the financing of the Makassar - Parepare railway project was carried out between PT Celebes Railway Indonesia (PT CRI) and PT Indonesia Infrastructure Finance (PII), PT Sarana Multi Infrastruktur/SMI (Persero) and PT Bank Syariah. Indonesia Tbk, is an example of non-APBN creative funding.

"This is an example of our success in building a railway project, which was built for the first time by the private sector, because so far the government has built it with the state budget," said Budi Karya in a press release in Jakarta, as quoted from Antara, Friday, June 4.

Budi Karya expressed his gratitude to the Ministry of Finance for providing support through PT SMI and PT PII, so that the Makassar - Parepare Railway project with the Government and Business Entity Cooperation (PPP) scheme can be carried out.

"As directed by the President, that we must think creatively so that the project can continue in the midst of the government's budget constraints. With this creative funding, this project can be implemented," said the Minister of Transportation.

The Minister of Transportation said that the government provides the widest opportunity for the private sector/business entities and the public, to take part in the provision of transportation infrastructure through the Government Cooperation Financing scheme with Business Entities (KPBU).

With this scheme, it is hoped that infrastructures that are economically and commercially viable can be realized soon.

“I invite investors to carry out other transportation projects through creative funding such as PPPs. We will build New Ambon Port, Tanjung Carat Port, Orchid Port, Garongkong Port, and what is already underway is Patimban Port. We even have projects in Palembang, Lampung, and trains in Central Kalimantan. If the private sector has an interest in investing, we will help and will be supported by the Ministry of Finance," he said.

In the implementation of the Makassar-Parepare Railway PPP project, the Ministry of Transportation received support from the Ministry of Finance through the Project Development Facility (PDF), where PT. Indonesia Infrastructure Guarantee Fund (Persero) was assigned as the facility implementer.

This PDF facility starts from the preparation of the Final Business Case (FBC), assistance in the procurement of the Implementing Business Entity, to the stage of completing the financing (Financial Close).

With this funding, he hopes to reduce the burden on state finances in financing infrastructure development, especially transportation infrastructure.

The financing for the Makassar - Parepare Railway line construction project in South Sulawesi will be carried out in 2 parts, namely: the first part, to finance construction, and testing, as well as the completion of the Garongkong Port Station Emplacement as a part of Segment B Railway Infrastructure and Infrastructure. The F segment of the Makassar – Parepare railway line, and the second part, to finance interest during the construction period, using both conventional and sharia schemes.