Extra efforts by construction SOEs
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Upaya ekstra BUMN karya
6 March 2025
By Dionisio Damara Tonce
Suboptimal performances, including financial setbacks, declining new contract values, and challenging debt positions, are expected to limit the expansion opportunities for state-owned construction enterprises (SOEs).
In fact, based on unaudited financial reports, the majority of construction SOEs experienced a decline in performance last year.
Simultaneously, the government is actively implementing budget efficiency measures, including in infrastructure development, which may erode business opportunities for several state-owned construction enterprises. Consequently, several construction SOEs are preparing to manoeuvre more strategically to ensure their financial performance remains robust.
Entus Asnawi Mukhson, the President Director of PT Adhi Karya (Persero) Tbk (ADHI), stated that the company's strategy will be adjusted this year, while still targeting several new projects aligned with government programmes.
ADHI faces a trade debt burden of Rp10.47 trillion that urgently needs to be resolved this year. Consequently, ADHI requires fresh capital injections, which can be obtained from the disbursement of outstanding payments for the Jabodebek LRT project, amounting to Rp2.1 trillion.
Additionally, he hopes the company will receive state capital participation (PMN) along with equity deposits for the ownership of the Yogya-Bawen and Yogya-Solo toll roads.
"We also have bond funding sources; however, in the current market situation, public trust in construction SOEs is indeed low, making bond restructuring challenging," he explained.
Meanwhile, Sugeng Rochadi, the President Director of PT Brantas Abipraya (Persero), stated that budget efficiency significantly impacts performance.
Sugeng explained that budget cuts could reduce Abipraya's revenue to Rp6.7 trillion, down from the target of Rp10.2 trillion.
Similarly, Muhammad Hanugroho, the President Director of PT Waskita Karya (Persero) Tbk. (WSKT), stated that the construction industry is facing challenges this year due to the market decline resulting from the government's efficiency programme.
WSKT aims to boost new contracts to Rp14 trillion despite the decline in new contracts this year. "We must be smart in finding new markets," stated Muhammad Hanugroho, the President Director of PT Waskita Karya (Persero) Tbk (WSKT).
Asset disposal
WSKT plans to dispose of non-core business assets, including PT Pemalang Batang Tol Road, valued at Rp1.6 trillion, and PT Cimanggis Cibitung Tollways, valued at Rp3.3 trillion.
PT Wijaya Karya (Persero) Tbk. (WIKA) also plans to sell several assets and eliminate subsidiaries to anticipate the decline in the construction market.
"We will divest in 2025, both in toll roads and other investments. Besides reducing investment burdens, this will also provide cash funds to strengthen capital and fulfil obligations," said WIKA President Director Waskito.
One of the toll assets that WIKA plans to dispose of includes the Balikpapan-Samarinda (Balsam) Toll Road and the Soreang-Pasirkoja (Soroja) Toll Road. Additionally, the Jatiluhur Drinking Water Supply System (SPAM) project in East Bekasi, West Java, will also be sold.
WIKA is optimising its group's portfolio by reorganising subsidiaries. Additionally, WIKA is pursuing operational efficiency with a target of at least a 15% reduction.
Meanwhile, Adisatrya Suryo Sulisto, the Deputy Chairman of Commission VI of the House of Representatives (DPR), concluded the meeting by emphasising that the DPR would establish a working committee to enhance the performance of construction SOEs.
On the other hand, the government is not ignoring the condition of construction SOEs. The Minister of State-Owned Enterprises, Erick Thohir, is considering the option of merging state-owned construction companies. He mentioned that the efficiency of these mergers would be maintained, with the possibility of reducing the number of companies from seven to three, or even to one.
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