20 Mei 2009

Poor infrastructure hampers development of healthy houses

Poor infrastructure hampers development of healthy houses

Agnes S Jayakarna ,  THE JAKARTA POST ,  SURABAYA   |  Fri, 05/15/2009 1:09 PM  |  National

The backlog for simple, healthy houses (RSHs) in East Java is likely to increase this year as poor infrastructure hampers the development of RSHs in the province, an executive said.

The Secretary of East Java chapter of Indonesian Real Estate Association (REI), Muhammad Nur Wakhid, said Thursday that developers faced many problems in building RHSs.

"The main problems are the lack of good infrastructure, such as a drainage system and roads to reach the location, lack of electricity network and administrative problems."

Nur added most RSHs were developed in rural areas with limited facilities and access.

For 2009 alone, East Java needs as many as 300,000 units of RSHs. Yet, as of May, developers in the province had only built 4,000 out of this year's target of 11,000 targeted houses.

However, Nur expressed optimism that the developers would be able to meet the target as the number of prospective customers for the RSH sector increased each year.

The increase in the need for RSH in the province, according to Nur, was bigger than that of the non-RSH ones, which is about 10 to 15 percent or 1,000 to 1,100 RSH per year.

Nur said the REI had often asked the governor and other related institutions to help developers solve the problem by helping speed projects to expand infrastructure and other supporting facilities in rural areas.

The REI, he added, had proposed that the provincial administration release developers from paying for the building permits (IMB) needed to construct the RSHs.

"If the administration agrees to cut such payments, developers will be able to offer affordable RSHs to the customers in the province."

He added the administration had set the price of a unit of an RSH at Rp 55 million (US$5,200).

Nur disclosed that amid the limited national budget of Rp 2.5 trillion allocated for RSH subsidy, developers still found it difficult to meet the set price. REI therefore had also proposed the subsidy was increased to Rp 10 trillion to meet with the steady hike in the prices of building materials.

Another crucial problem faced by developers in providing affordable RSHs for low-income people was providing an electricity network, especially because RHSs were mostly built in rural areas.

In many cases developers were forced to provide it by themselves, which cost them an additional 10 percent of the price of the built houses.

Separately on Thursday, the corporate speaker of state-owned company electricity company PT PLN's East Java branch, Agus Widayanto, said the company faced budget constraints in expanding electricity networks.

Agus said the government had cut its subsidy to PLN to Rp 45 trillion this year, or almost half of the last year's subsidy of Rp 80 trillion.

Therefore, Agus added, PLN offered new customers, especially from the industrial sector, a business-to-business scheme in which customers finance the installation of the network in order to anticipate the limited investment for new network installments.

The company, Agus said, had so far listed 303 prospective customers, with a capacity demand of 915 megavolt ampere. Yet, it thus far could only serve 150 of them, which required new installments of above 200 kilowatts volt amperes.


http://www.thejakartapost.com/news/2009/05/15/poor-infrastructure-hampers-development-healthy-houses.html

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