Ministry of EMR Allocates Rp3.46 Trillion for Covid-19

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 216.Pers/04/SJI/2020

Date: 25 June 2020

Ministry of EMR Allocates Rp3.46 Trillion for Covid-19

Ministry of Energy and Mineral Resources (EMR) has cut or reallocated and refocused its 2020 funds of Rp 3,464.92 billion. The reallocation has been made to help fight the Covid-19 pandemic.

"According to Decision of Minister of Finance Number 154/KMK.02/2020, the initial ceiling (of Ministry of EMR) in the State Budget was Rp9.6 trillion; after the cut (for Covid-19 funds) and Public Service Agency (BLU) adjustment, the final ceiling is Rp6.2 trillion," said Minister of EMR Arifin Tasrif in a follow-up working meeting with Commission VII of the House of Representatives of Republic of Indonesia on Tuesday (23/6).

This budget cut, continued Arifin, is part of the budget cuts from all state ministries and agencies amounting to Rp145.7 trillion. A portion of the amount will be used to extend the social safety net in the form of electricity discounts for underprivileged households subscribing to 450 VA and 900 VA plans and Micro, Small, and Medium Enterprises subscribing to B-1 450 VA and I-1 450 VA.

Arifin went on to explain the budget cuts in the Ministry of EMR are made for goods spending such as official travels, meeting packages, meeting costs and honorarium. Besides, spending plans which supporting data is incomplete have been blocked while renovation or building construction plans have been delayed.

Special for infrastructure construction, budget cuts have been made to those projects that may not be completed in 2020, are not urgent or not located in remote areas, are prone to higher costs due to the increase in exchange rate or the target volume exceed the capacity and have not had fixed locations.

"These projects can be delayed to the next year or be extended (from single-year projects to multi-year ones). The multi-year projects are extended to the next year," said Arifin.

Arifin said there are a number of activity changes after the shift in budget post, for example in the oil and gas subsector from Rp3.7 trillion to Rp1.9 trillion. The shift has impacted the construction of gas networks, from previously 266,070 Household Connections (SRs) to 127,864 SRs, converter kits for fishermen to 15,000 packages from previously 40,000 packages, and converter kits for farmers from 10,000 packages to 7,000 packages. "The conversion of kerosene to 3-kg LPG cylinder will be carried out in 2021," Arifin stated.

In the renewable energy subsector, the affected projects are Rooftop PV on office buildings, social buildings, or houses of worship, from 800 units to 100 units; Solar-Powered Public Lighting (PJU-TS) from 45,000 points to only 1,800 points, and revitalization of New, Renewable Energy Power Plants from 24 units to 7 units.

However, Ministry of EMR has added some new projects, among others, 14 Rooftop PV systems for cold storage with a budget of Rp119.68 billion. "We've decided to cut the budget for new, renewable energy infrastructure from Rp1.17 trillion to Rp610 billion," said Arifin.

Next, the budget ceiling of the geology subsector's infrastructure has been adjusted from previously Rp619.08 billion to Rp387.59 billion. The impacts are less construction projects, for example, groundwater bore wells from 1,000 holes to 30 holes and renovation of volcano observation posts to 5 units from previously 10 units.

In his concluding remarks, Arifin appreciated the results of the working meeting and agreed to optimize the budget. "We appreciate the proposal put forward by the chief and members of Commission VII of the House to refocus the ministry's budget by optimizing infrastructure activities in the Revised State Budget of the Ministry in 2020," Arifin ended. (IY)

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