Logo of Phnom Penh Post newspaper Phnom Penh Post - Indonesia’s key infrastructure projects remain on schedule in 2019

Indonesia’s key infrastructure projects remain on schedule in 2019

Content image - Phnom Penh Post
The Cileunyi-Sumedang-Dawuan Toll Road in West Java, Indonesia, is currently under construction and expected to be completed this year. MINISTRY OF PUBLIC WORKS AND PUBLIC HOUSING OF THE REPUBLIC OF INDONESIA

Indonesia’s key infrastructure projects remain on schedule in 2019

Although a number of Indonesia’s infrastructure projects were delayed as investors worried that the presidential and legislative elections in April would cause political instability, many key infrastructure projects were completed on time.

The Committee for the Acceleration of Priority Infrastructure Delivery (KPPIP) recently published data showing that at least 30 national strategic projects (PSN) with a total value of 165.3 trillion rupiah ($11.9 billion) were completed – and ran smoothly – last year.

The 30 completed PSN projects consisted of four airports, four water reservoirs, nine roads (toll roads and national roads), six special economic zones (SEZs), two train projects, one seaport, two smelters and two technology-related projects, said Wahyu Utomo, the head of KPPIP’s implementation team, on December 26.

The road projects included the 140.9km Bakauheni to Terbanggi Besar toll road and the 100km Terbanggi Besar to Pematang Panggang toll road, which are part of the Trans-Sumatra network.

Other major completed toll roads include the 36.4km Jakarta to Cikampek II elevated toll road and the 231.84km Morotai Ring Road. Non-road projects include the Kertajati Airport, Syamsuddin Noor Airport, Tjilik Riwut Airport, Palapa Ring Broadband project and the Bitung and Morotai SEZ development.

Wahyu said with the completion of these projects last year, the government had finished 92 national strategic projects out of the 223 projects undertaken between 2016 and 2019.

‘The biggest problems’

Wahyu said many infrastructure projects were hampered by overlapping regulations, which made permits for infrastructure development difficult to obtain.

Wahyu suggested several points to be improved to accelerate infrastructure development and the ease of doing business – more straightforward project document preparation, more financing alternatives and improved human resource quality.

“Based on our experience [over the last four years], overlapping regulations are among the biggest problems,” he said, adding that he hoped such difficulties would be resolved through the issuance of an omnibus law currently being prepared.

Separately, data from the Public Works and Public Housing Ministry showed that from 2015 to 2019, the government had built 1,500km of new toll roads, 3,867km of new roads, 58,346km of new bridges and 61 water reservoirs.

Nationwide cement sales declined slightly, by 0.34 per cent year-on-year, to 63.23 million tonnes as of November. Although cement sales actually picked up in the second half of the year, the postponement of several infrastructure projects in the first half as a result of the elections led to an overall decline in annual sales.

Delays to a number of infrastructure projects also affected state-owned construction firms. PT PP, for example, lowered its 2019 contract targets to 45 trillion rupiah from 50.3 trillion rupiah as a result of project delays, president director Lukman Hidayat told the press in October.

State-owned construction firm PT Waskita Karya revised its new contract target to 45 trillion rupiah from 55 trillion rupiah, said operational director II Bambang Rianto.

Even though it remained optimistic that it could still reach its new contract target, state-owned construction firm PT Wijaya Karya’s (Wika) annual revenue declined.

During the first nine months of this year, Wika’s revenue fell by 12.89 per cent year-on-year to 18.3 trillion rupiah due to decreasing earnings from infrastructure, buildings, energy and industrial plants and industry segments. Despite the lower revenue, Wika still managed to book a 48.3 per cent year-on-year increase in net profit of 1.57 trillion rupiah over the period.

State-owned Jasa Marga suffered a similar decline. It booked 21.15 trillion rupiah in revenue as of September, down by 22.76 per cent year-on-year. Finance director Donny Arsal said the decrease was caused by declining construction revenue.

Publicly listed toll road operator Jasa Marga’s net profit also dropped by 15.18 per cent year-on-year to 1.5 trillion rupiah in the first nine months of this year.

Wika’s share prices grew by 18 per cent last year, while Jasa Marga’s share prices grew by 25.58 per cent year-to-date as of December 23.

The performances of their shares were much better than those of PT PP, Waskita Karya and Adhi Karya, all of which were in the red.

Infrastructure development will still be a major focus of government next year and over the next five years. To support infrastructure development, the government has allocated 430 trillion rupiah in the 2020 state budget, higher than the 420 trillion rupiah allocated for the 2019 state budget.

THE JAKARTA POST/ASIA NEWS NETWORK

MOST VIEWED

  • ‘Education’ a priority traffic-law penalty

    A top National Police official on June 21 neither rejected nor confirmed the authenticity of a leaked audio message, which has gone viral on social media, on a waiver of fines for a number of road traffic-related offences. General Him Yan, deputy National Police chief in

  • Pursat Ford assembly plant opens

    The Kingdom’s first Ford assembly plant was inaugurated on June 16 in Pursat province amid rising demand for brand-new vehicles among Cambodians. The facility is seen as a game changer for the domestic automobile industry, which could bring a wave of investors seeking to cash

  • Siem Reap’s $18M zoo said to educate public, help wildlife

    Angkor Wildlife and Aquarium Co Ltd has invested $18 million in a zoo in Siem Reap province, which will be opened in October to educate and promote animal conservation as well as attract national and international tourists. Currently, the Angkor Wildlife and Aquarium is building the

  • Volunteer scheme to foster ‘virtuous’ humanitarian spirit

    A senior education official said volunteer work contributes to solidarity and promotes a virtuous humanitarian spirit among the youth and communities. Serei Chumneas, undersecretary of state at the Ministry of Education, Youth and Sport, made the comment during the opening of a training programme called “

  • $50B infrastructure plan en route

    The government’s upcoming $50 billion,10-year infrastructure master plan will provide tremendous investment opportunities for domestic and foreign entities, transport experts and economists say. Minister of Public Works and Transport Sun Chanthol revealed the plan to Japanese ambassador to Cambodia Masahiro Mikami on June 15. At

  • Chinese firms unveil preliminary results on metro, monorail for capital

    Minister of Public Works and Transport Sun Chanthol and representatives from China Road and Bridge Corp (CRBC) and its parent company, the state-owned China Communications Construction Co Ltd (CCCC), met on June 24 for talks on results of the firms’ preliminary study on a potential metro