For construction of railway projects, Indonesia will only use state funds because of a lack of private-investor interest in financing the massive projects, according to a government official, reports The Jakarta Post.
Hermanto Dwiatmoko, director general for railways at the Transportation Ministry, said the ministry would need Rp 19.84 trillion (USD 1.5 bn) to start the projects this year, all of which would derive from the state budget.
Although no private investors would be involved in the projects this year, private sectors were expected to contribute at least 70 percent of the funds needed for the projects within the next 15 years, Dwiatmoko explained.
“For this year, the nationwide projects will be exclusively financed by the state budget because a public-private partnership mechanism for Kalimantan and Sumatra will not be feasible and profitable for private investors,” Hermanto said.
He said the master plan excluded coal railway projects in Kalimantan, which would be built by private companies as they were to be constructed for their own commercial use to transport coals.
indonesian President, Joko Widodo, has allocated Rp 195 trillion (USD 14.8 bn) this year, mostly for infrastructure development, with Rp 64.9 trillion (USD 4.95 bn) allocated to the Transportation Ministry to be spent mainly on railway and seaport projects.