DKI DPRD Ensures Rp3.5 Trillion Regional Bonds Have Green Lights, Discussion Continues in the 2027 APBD

DKI Jakarta Provincial DPRD Building (@dprdjakarta)

JAKARTA - The DKI Jakarta DPRD ensures that the plan to issue regional bonds worth Rp3.5 trillion will be part of the discussion of the Draft General Policy of the DKI Jakarta Regional Budget and Priority Provisional Budget Ceiling (KUA-PPAS) for the 2027 Fiscal Year.

Although it has not been decided in a final manner, the proposal is considered to have obtained initial approval because it has been included in the discussion of the Budget Agency (Banggar).

Chairman of the DKI Jakarta DPRD Suhud Alynudin said that the financing scheme through regional bonds had been discussed with the Regional Government Budget Team (TAPD) when drafting the 2027 draft APBD. In the draft, regional revenues are projected to reach Rp. 72.87 trillion, regional spending Rp. 73.82 trillion, with a total APBD of around Rp. 81.34 trillion.

"The bonds have been included in the Banggar discussion. So in fact, it has indirectly been approved by the DPRD. It's just that later in the discussion it can develop," said Suhud, Friday, July 24.

According to Suhud, the next discussion will be carried out in each commission and Banggar to test the feasibility of the project to be financed from the proceeds of the bond issuance. Currently there are 12 proposed projects, but the DPRD is still open to the possibility of other project proposals that are considered more feasible.

"Whether the 12 projects submitted are appropriate or there are other alternatives, it will be discussed in more depth in the commission and Banggar," he said.

He emphasized that the issuance of regional bonds could not be done in a hurry because it had to go through a long process, including obtaining assistance and approval from the Ministry of Home Affairs and the Ministry of Finance.

In addition, bonds with a tenor of up to seven years require local governments to carefully prepare financial schemes so that the principal and interest payment obligations can be met according to schedule.

"This is long-term financing, up to seven years. Therefore, the financial scheme must be properly structured so that payment obligations can be met," he explained.

Suhud also revealed that the DKI Provincial Government was still studying a number of other financing alternatives through the creative financing scheme, including loans from PT Sarana Multi Infrastruktur (SMI). The study was carried out to determine the most effective funding model for regional development.

On the other hand, the DPRD ensures that it will oversee the entire process of issuing regional bonds. According to Suhud, the funds collected can only be used to finance long-term or multi-year infrastructure projects that provide direct benefits to the community.

He added that the use of bond funds must still follow the rules even though there is a proposal that the financing can support the results of the council member's recess program. Because, regional bonds are public funding instruments that have strict management and supervision mechanisms.

"Because this is public funds, the DPRD will supervise from the preparation stage, the launch of bonds, to the implementation of the financed projects. The projects must also be selected very selectively according to their provisions," he added.