Construction issuer performance: Construction SOEs boost new contracts
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 - Kinerja emiten konstruksi: BUMN Karya geber kontrak anyar
22 November 2022
By: Rinaldi M. Azka
Despite new contract realisation growing double digits year-on-year (YoY), several construction state-owned enterprises (SOEs) are boosting their new contract achievement until the end of 2022.
PT PP (Persero) Tbk (PTPP) secured new contracts worth Rp21.82 trillion until the end of October, which grew 50.59% YoY from Rp14.47 trillion.
PTPP Corporate Secretary Bakhtiyar Efendi explained their new contract value continued to increase reaching Rp22.89 trillion in the second week of November 2022. That achievement until today came from the engineering, procurement, and construction segment that contributed by Rp2.5 trillion and the port infrastructure segment by Rp1.5 trillion.
“The company’s new contract achievement until this November is supported by PTPP’s mainstay segment, which is seaport. Moreover, two seaport projects have been successfully obtained, namely Patimban Phase 2 Package 6 worth Rp823 billion and the jetty project in East Kalimantan worth Rp682 billion,” he said in his statement on Monday (21/11).
Amid all of the current challenges, PTPP is still continuously achieving their target. This year, PTPP is targeting to absorb a capital expenditure (capex) of Rp4.3 trillion that is planned to be used to invest in subsidiaries, entities, and affiliates.
Moreover, until the third quarter of 2022, PTPP logged a capex of Rp2.65 trillion that increased by 47.39% YoY from Rp1.8 trillion. Even though it increased, most of that realisation is used to finance ongoing investment.
Similar to PT Wijaya Karya (Persero) Tbk (WIKA). The company secured new contracts worth Rp25.5 trillion per October 2022, which increased from the realisation in September 2022. From the contracts, projects in New Capital City (IKN) Nusantara contribute by Rp2.3 trillion.
Wijaya Karya President Director Agung Budi Waskita (Agung BW) said that, until October 2022, WIKA had secured new contracts worth Rp25.5 trillion that increased by 34.2% YoY from Rp19 trillion.
“The new contract achievement includes several projects from the New Capital. After obtaining KKT Kariangau-Tempadung Interchange toll segment, modular building for workers by WIKA Gedung KSO (Joint Venture), Wika and PTPP KSO successfully acquired a new contract to construct the presidential palace and presidential office,” he explained.
Hence, the new contracts that have been secured by WIKA from projects in IKN reach Rp2.3 trillion, slightly beaten by PT Waskita Karya (Persero) Tbk. WSKT secured contracts worth Rp2.55 trillion and PTPP worth Rp2.9 trillion.
Besides projects in IKN, WIKA secured the contract for UPT Vertikal Hospital in East Java, the construction of the duplicate Kapuas Bridge in Central Kalimantan, and the construction of Karet Sungai Juana Dam in Central Java.
WIKA is also continuing the development of Batam International Airport (BIB) that officially commenced with the issuance of the work order by PT Bandara Internasional Batam (BIB) that appoints PT Wijaya Karya (Persero) Tbk (WIKA) as the implementing contractor.
The development of the international airport includes Terminal 1 revitalisation, Terminal 2 construction, apron expansion, as well as the development of several air side and land side facilities. This work will last for 36 months with a contract value of Rp2.18 trillion.
Similarly, PT Waskita Karya (Persero) Tbk (WSKT) logged new contracts worth Rp13.38 trillion until October 2022. Waskita Karya Corporate Secretary Novianto Ary Nugroho explained that this realisation increased by 10.64% YoY from Rp12.09 trillion.
The additional new contracts that came from government projects reached 68.19%, private projects 10.22%, SOEs and regional SOEs 9.57%, and subsidiary business development 10.23%.
“Based on the project type, the new contract value is contributed by infrastructure connectivity by 49.76%, buildings 18.98%, EPC 11.15%, water resources 8.09%, and subsidiaries 12.03%,” he revealed.
Novianto explained that projects with the largest contribution until October 2022 were the presidential secretariat building and its supporting buildings in the presidential palace area in IKN with a contract value of Rp1.35 trillion as well as the construction of Umbulan Regional SPAM (Drinking Water Supply System) in East Java worth Rp115 billion.
“We continuously hunt for domestic strategic projects,” Novianto stated.
