Minister of Public Works, Dody Hanggodo, reveals that a number of infrastructure projects will affected following the shrinking of infrastructure spending at the Ministry of Public Works  by more than 75 percent from Rp90.93 trillion (US$5.6 billion) to Rp22.3 trillion.

Dody said on Tuesday, February 6, 2025 that the ministry will cancel new infrastructure projects that are sourced from pure rupiah currency, resulting in new infrastructure projects in 2025 only being carried out through the Business Entity and Government Cooperation (KPBU) scheme, grant funds or foreign loans.

As a result of the ministry's budget cuts, a number of infrastructure projects are affected and could not be continue this year. Some of these projects include routine preservation of roads and bridges, community-based drinking water and sanitation provision programs, development of tourism areas, development of regional socio-economic infrastructure, and development of buildings and the environment.

It has been reported that the planned budget for new infrastructure in 2025 is only Rp6 trillion. The government is currently unable to confirm whether all payments for infrastructure projects with Multi-Year Contract (MYC) can be met.

In the wake the implementation of Presidential Instruction (Inpres) No. 1/2025 on Efficiency of the 2025 State Budget (APBN), the budget of the Ministry of Public Works decreased from Rp110.95 trillion to Rp29.57 trillion.

"The amount of budget efficiency in our ministry, at Rp81.38 trillion, will have an impact on achieving priority targets this year," Dody said.

Deputy Minister of Public Works, Diana Kusumastuti, admitted that the ministry has not yet determined the new infrastructure projects that will be built in 2025. The government is currently reviewing various options to fulfill obligations to infrastructure projects under MYC contracts. She emphasized that the sustainability of infrastructure projects is highly dependent on the decision of the House of Representatives (DPR) regarding the budget revision.

"There are several options being studied, such as increasing the project payment tenor or extending the concession period to the project operator. However, the most important stage is to ensure the opening of the Public Works Ministry's budget in the near future," Diana said.

"We don't know the future budget conditions yet. However, the most important thing right now is the approval of the budget revision by the DPR, so that the budget block at the Ministry of Finance can be opened. In essence, details of the infrastructure projects will be discussed further," she concluded.