Waskita to focus on constructing water and airport infrastructures
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.
Investor Daily - Waskita akan fokus garap infrastruktur air dan bandara
29 September 2021
Jakarta – PT Waskita Karya Tbk (WSKT) will refocus on the construction business line, especially on water, railway, and airport infrastructures. The policy to divest several toll segments, especially from Trans-Java and Trans-Sumatra toll roads, is part of the company’s strategy to no longer become a toll road investor.
State-owned Enterprise (SOE) Deputy Minister II, Kartika Wijoatmodjo, said that Waskita’s strategy and business in the future would be refocused on the construction business. “So, the reason why many toll roads were divested is because we hope Waskita will no longer be an investor. However, [we expect] Waskita to return to their core business line, which is construction, especially constructions of water, road, and railway [infrastructures],” he said during a working meeting with House of Representatives (DPR) Commission VI recently.
Hence, he said that, after Waskita had finished the toll road constructions in 2025, the toll roads would be divested in stages to SOEs, private companies, as well as the Indonesia Investment Authority (INA).
He affirmed that Waskita would return to its core business in 2025. The company is no longer recommended to enter long-term investments that are not Waskita’s core competence.
Besides that, Kartika continued that his agency had also improved their comprehensive financial management. Previously, when Waskita was part of Perusahaan Pengelola Aset (PPA), Waskita was a healthy company.
However, the company was tasked with many assignments, even though its financial and risk management preparedness was lacking. Hence, Waskita was restructured so that the mismatched condition between their short-term and long-term cash flow will not be repeated.
Waskita President Director, Destiawan Soewardjono, revealed that the main reason why Waskita was struggling in the financial sector was because they could secure various projects, including turnkey projects, with only approvals from one or two members of the board of directors.
Then, the mechanism to invest in land banks has not been regulated clearly. Another reason is that too many investments in the toll road business were financed by short-term loans, so it created a mismatch. Moreover, they do not have a director that is focused on risk management.
Competition among construction SOEs is also unhealthy, so the construction margin is extremely low. Moreover, there is no integrated information system for project managements or managers to observe profitability, solvability, and liquidity.
“We are transforming to set an authority to terminate projects and investments, as well as to activate the role of commissioners. Then, we are also creating the BOD Chapter to regulate the role and the interaction of the board of commissioners and directors,” he stated.
Furthermore, Destiawan has also added a nomenclature for a risk management director who will also act as a finance and SOP improvement director to principally stop the establishment of the construction and investment risk committee, as well as to determine Waskita’s specialisation in water and airport infrastructure sectors that includes the implementation of enterprise resourcing planning and financial dashboard for construction projects and investments.
