Rupiah Anjlok, Ministry of PU Says Business Entities Are Responsible for the Increase in Construction Materials

Infrastructure (inter)

JAKARTA - The exchange rate of the rupiah against the US dollar continues to weaken to this day, as a result, the price of construction materials is also believed to have increased.

Acting Director General of Infrastructure Financing of the Ministry of Public Works (PU) Ni Komang Rasminiati assessed that the weakening of the rupiah exchange rate has not impacted the submission of project cost adjustments from private partners working on government infrastructure projects.

Komang assessed that until now the PU Ministry has not received a proposal for changes in investment values or cost adjustments from partner business entities, even though the weakening of the rupiah has the potential to drive up the prices of a number of construction materials, fuel (BBM) and other components used in infrastructure development.

"In the toll road agreement so far, if there is no other policy from the government, it should be the risk of the business entity," he said when met at his office, Jakarta, Friday, June 5.

The plummeting rupiah has an impact on building materials whose material composition or goods are still imported. Therefore, service providers need to adjust the affected costs.

He admitted that there was a potential impact in the future. "Maybe the achievement of the construction will be affected because of the increase in construction costs due to the increase in fuel costs," he said.

Currently, the Ministry of PU's Toll Road Regulatory Agency (BPJT) has a strategic plan for 2025-2029 to build 1,500 kilometers of new toll roads. So far, in the Toll Road Operation Agreement (PPJT) there are around 1,000 kilometers that are expected to be operational in 2029.

The toll roads targeted for completion include the Probolinggo-Banyuwangi Toll Road, the Kuala Tanjung-Tebing Tinggi-Parapat Toll Road and the Palembang Junction Toll Road. "We will also coordinate with these business entities to complete," he added.

To note, the rupiah exchange rate in Thursday afternoon trading closed down 0.46 percent to Rp18,049 per US dollar from the previous Rp17,966 per US dollar.