JAKARTA - The DKI Jakarta DPRD emphasized that the plan to issue regional bonds worth Rp3.5 trillion should not only be a financing instrument, but must be directed towards development programs that provide direct benefits to the community and support the transformation of Jakarta as a global city.
Deputy Chairman of the DKI Jakarta DPRD Basri Baco said the bond scheme is not new in government financing. However, if realized, the DKI Jakarta Provincial Government (Pemprov) will be the first regional bond issuance in Indonesia.
"Bonds are not new goods. The central government has also been issuing bonds for years. One of the well-known ones this year is the Patriot Bond," said Baco, Tuesday, July 21.
According to Baco, the funds from the issuance of bonds will be included in the DKI Jakarta Regional Budget (APBD) and used to finance various development programs.
"The funds will be used for the development, services, and interests of the people of Jakarta," he said.
Even though it supports efforts to find alternative sources of financing, the DPRD reminds that the use of bond funds must be accompanied by clear and accountable planning. This is because the local government still has the obligation to pay interest and principal of the bond to investors.
Therefore, Basri emphasized that the DPRD would carry out oversight functions on the use of these funds. "It must be clarified what the funds will be used for and allocated to which sectors," he said.
He added that bond funds should be prioritized for fundamental sectors that are able to provide added value for the community while strengthening the regional fiscal capacity in meeting future bond payment obligations.
"As long as the goal is clear, the DPRD will certainly provide support," he continued.
Previously, DKI Jakarta Governor Pramono Anung said the DKI Provincial Government would start issuing regional bonds this year. The issuance of regional bonds is taken as an effort to find sources of financing outside the regional income and expenditure budget (APBD).
The process of issuing the regional debt is currently underway. The DKI Provincial Government is partnering with PT Sarana Multi Infrastruktur (Persero) or PT SMI together with the Ministry of Finance in preparing the issuance scheme.
This year, the DKI Provincial Government targets to issue regional bonds worth Rp3.5 trillion to finance the public service sector, ranging from education to hospital construction.
"That was an exercise at the beginning of us. Because I believe for Jakarta, Rp3.5 trillion is not a difficult figure, if there is a problem, cover it," said Pramono, Wednesday, July 1.
Pramono explained that the funds from the issuance of the bonds would be allocated for the basic needs of the community, which has been the priority of the local government, namely for the education sector to the construction of an international standard hospital.
"What is this 3.5 trillion bond for? The first is for education, the second is for one of them, the initial capital to build Sumber Waras Hospital, later what will be the name of the hospital, in time we will announce," said Pramono.
"So, it's really for the most basic, most elemental purpose in Jakarta, not for what is the case, business and so on," he continued.
Meanwhile, commercial projects will still be financed through the APBD mechanism or the management of regional business entities (BUMD).
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