TEMPO.CO, Jakarta - Minister of Public Works, Dody Hanggodo, revealed a significant reluctance among private sector entities to participate in government infrastructure projects through the Public-Private Partnership (PPP) scheme. He claimed to have received this information from Donny Rahajoe, Deputy Chair of the Indonesian Chamber of Commerce and Industry (Kadin) for Housing and Settlement Areas.
"I heard from the Deputy Chair of Kadin in the Housing and Settlement Area that the private sector is somewhat reluctant [to participate in PPP]," Dody said at the Creative Infrastructure Financing (CreatiFF) event in Jakarta on Tuesday, June 3, 2025, as quoted by Antara.
He described this news as an "emergency signal" requiring immediate attention. Dody believes that if local private companies are unwilling to participate in these projects, it will also deter other investors.
"So, what can we do to support them, to ensure there isn't such reluctance? Because without the private sector, given our very limited fiscal condition, we cannot be optimally effective," Dody explained.
On the same occasion, Donny Rahajoe mentioned that many domestic and international entrepreneurs feel somewhat "traumatized" after investing in government projects. One key reason cited is the fragmented and inconsistent policies surrounding the PPP scheme.
He elaborated that this leads to a convoluted and time-consuming process. "For example, I've been in IKN (Nusantara Capital City) for two and a half years, and none have been done, even though the rules have been simplified by the PPP scheme," Donny stated.
He added that many entrepreneurs ultimately question the sustainability of project collaborations with the government. "These entrepreneurs are wondering when financial closing can be achieved so activities can proceed," he said.
The Ministry of Public Works is promoting creative financing schemes, including through PPP, as a strategy to address the government's budget limitations for infrastructure development. The projected infrastructure investment needs for the 2025-2029 National Medium-Term Development Plan (RPJMN) are estimated at Rp1,905 trillion.
Of this amount, the state revenue and budget (APBN) are projected to cover approximately Rp678.91 trillion, or 35.63 percent. Meanwhile, regional revenue and expenditure budgets (APBD) are expected to contribute around Rp473.28 trillion, or 24.87 percent.
With these fiscal constraints from APBN and the regional budget (APBD), an estimated funding gap of Rp753 trillion remains.
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