Construction of roads, drinking water supply installations, and illumination would be financed with state budget fund, the president said in answer to a question from South Sumatra Vice Governor H Ishak Mekki in a video conference inaugurating the start of work for the project here on Wednesday.
The project of building one million units of low cost house until 2019 is aimed at assisting low income people to own a house, the president said.
Jokowi, however, said that it is important that land space would be available for the project, before fund is disbursed.
Earlier, the Indonesian Property Watch (IPW) warned the government not to repeat a mistake by its predecessor in launching its ambitious program in public houses.
The program needs thorough preparations with well prepared concept to ensure success, IPW Executive Director Ali Tranghanda said.
"The government should learn from the failure of the previous government in the program to build 1,000 low cost apartment towers," Ali said.
The 1,000 tower project had been a mistake from the beginning by relying its implementation entirely on the private sector without clear policy and supervision from the government, he said.
Similarly, the one million house program had not shown that it had been well planned with working mechanism and system, he said.
He said he appreciated decisions made to support the program such as on the a 5 percentage point cut in the FLPP (Housing Finance Liquidity Facility) interest rate, advance payment of one percent, and Rp4 million assistance for advance payment.
"But all that is not enough as it concerns only the demand side that the purchasing power of the consumers could increase as a result," he said.
"In order to avoid mismatch, which has often been a problem in the house market, supply has to be thoroughly planned. Even if the purchasing power has increased, the problem remains if lands are not available for the project," he said.
He said the prices of lands have soared and would continue to rise that more and more developers have quit venturing in low cost house projects.