Inside Jakarta’s $32 billion plan for infrastructure

Jakarta is planning infrastructure projects worth US$32.1 billion over the next six years. Key among these are train lines to ease the city’s traffic gridlock; a new port that will become Indonesia’s trade hub to the world; and a sewage system for a city where 96% of people don’t have access to one.

GovInsider exclusively spoke with Tuty Kusamawati, chief of Jakarta's Regional Development Planning Board, to find out more. Infrastructure projects in Indonesia have been typically marred by poor planning and delays. But its capital city is changing gears.

The government will need to “operate at double the speed” from its usual pace, says Kusumawati. There are three key things the government must do to ensure these projects come through, she says: partner with the private sector; use technology; and improve coordination.

‘Creative’ financing

First, Jakarta plans for more partnerships with the private sector. It does not want to rely only on national and local budgets for spending, and is looking at other ways for more “creative financing” of projects.

“We are also open to B2B [partnerships] through our local government-owned enterprises,” she adds. The government will support the businesses to ensure that it remains profitable for them to get involved. “If it’s not profitable and feasible [for the businesses], we won’t neglect it,” she says.

The government “will buy back” the infrastructure, if it is not profitable. The government could also subsidise the projects to make them more attractive, she added. But these will be the exceptions to the rule. It wants more private sector involvement in running infrastructure.

”If the project is feasible to be run by businesses, why don’t they run it as they run their own business,” she says. The government will simplify procedures for businesses to get involved.

“Permit processes will be made easier and more effective”, she says. Some permits will also be available without a fee, she added.

Tech driven

The second key factor is technology. Governor Basuki Tjahaja Purnama has introduced systems to monitor city-owned machinery, she says.

This is to ensure that the machines are constantly at work, and not misused by officials. Construction equipment owned by the city are being installed with sensors.

Jakarta’s Smart City Unit centrally tracks their location, how many hours they are used for and how much fuel they consume. This allows the governor himself to “identify who is working well, and what machinery is working”, she adds.

Central shake up

Third, the city must have strong leadership to shake up the entire administration, she says. Governor has strong command of officials.

“It means that if he says something, then all this staff will work through his direction and command.” The governor is known for his tough approach to management. He uses data to track employees’ performance and sacks underperforming officials.

“Everybody knows what are the consequences if they are not working,” Kusumawati says. His leadership style has helped Kusumawati’s planning team amass buy-in from other agencies. Coordination is a “very big challenge” to completing infrastructure projects on-time.

But Ahok’s leadership has made it “easier to cooperate with my colleagues”, she says. The Jakarta government has been working in first gear. Its infrastructure has long been overtaken by the number of people living and working in the city. It’s now time for the city to accelerate ahead.

Image by Berita Jakarta