Infrastructure Projects at Risk Due to Unapproved Budget Increase

Summary

The government is reviewing budget escalation to accommodate increased costs for infrastructure projects. Ministry of Public Works and Housing's (PUPR) Director General of Highways Hedy Rahadian said this effort was made to accommodate rising prices for materials such as iron, steel, cement, asphalt, and industrial fuel. Hedy admitted that the contractors demanded contract value escalation for government infrastructure projects.

According to him, the directorate general has proposed a cost escalation to the Ministry of Finance. Previously, only non-subsidized fuel oil [BBM] rose, then asphalt cost rose a few months later," Hedy said Tuesday. Hedy hopes the proposal is decided in a cabinet meeting with President Joko Widodo. On a separate occasion, the Secretary General of the Joint National Construction Executor (Gapensi) Andi Rukman Karumpa said a cost escalation is crucial as building materials prices soared.

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