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Wednesday, 30/09/2020
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As reported in Kompas.com, CSID Director Mohammed Ali Berawi argues that there will be a slowdown in the ongoing implementation of infrastructure project development activities. Adjustments to the initial project planning are needed to mitigate the risks and impacts of the slowdown due to the recession and the Covid-19 Pandemic. Therefore, it should be anticipated by the parties concerned to maintain financial resilience and cash flow, so that costs, time and quality of construction work can be controlled properly. The ability to adapt and the resilience of the contractor’s performance as executor of infrastructure projects will play a significant role in the smoothness and success of development. In addition, government intervention in helping project cash flow can be done through payment of work progress or providing soft credit incentives if needed.
For projects that are planned to be implemented during a recession, adjustments need to be made based on the criteria of project readiness, priority scale, and project urgency, as well as the resulting economic impact. Projects that have met the above criteria can be continued. This is due to the fact that infrastructure development in Indonesia is labor intensive or still involves a lot of labor and is capable of turning the economic activities of industries related to infrastructure. Meanwhile, for projects that do not meet these criteria, their execution may be temporarily postponed. This is based on the consideration that the impact of a recession can directly affect the timing and financing of the project. Ali explained that this was based on the consideration of the impact of the recession which could directly affect the project timing and financing.
According to Ali, the availability of infrastructure is a basic prerequisite, both to meet the needs of a decent life and to increase productivity and economic growth. In addition, it also needs to be supported by the availability of digital infrastructure which played such an important role during the Covid-19 Pandemic. Therefore, infrastructure development must continue to be built efficiently, effectively, with optimal benefits.
Infrastructure projects that are included in the National Strategic Project (PSN) can be one way to keep the economy moving during a pandemic and recession. This is because Indonesia still needs massive infrastructure development, from basic infrastructure to modern infrastructure to support productivity. Finally, Ali believes that Indonesia still needs to build infrastructure to reduce disparities and simultaneously recover the economy.
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