Supporting SOE capital for national development goals
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 - Menopang permodalan BUMN untuk tujuan pembangunan nasional
13 September 2023
By: Arnoldus Kristianus & Thomas E. Harefa
Jakarta - The government is planning to disburse state equity participation (PMN) for three state-owned enterprises (SOEs) worth Rp28.15 trillion in the first quarter of 2024. SOEs act as development agents that are expected to contribute to the achievement of national development goals.
There are three SOEs that will receive PMN, namely PT Hutama Karya (Persero), PT Bahana Pembinaan Usaha Indonesia (Persero), and PT Wijaya Karya (Persero). The disbursement will be accelerated as the time when the PMN is provided will determine the health of the SOEs.
“The timing in 2024 is urgent. So, we need to hold discussions and obtain approvals immediately so that we can take an early step considering the condition of the SOEs,” Finance Minister Sri Mulyani Indrawati said at a work meeting with House of Representatives (DPR) Commission XI on Tuesday (12/9/2023).
The 2024 Draft State Budget Meeting on 5 September 2023 has approved the PMN for the three SOEs to be disbursed in the first quarter of 2024. However, it needs to be studied further by DPR Commission XI so that the government can process the PMN after the 2024 State Budget Law has been passed.
Based on the data from the Finance Ministry, Hutama Karya will receive PMN worth Rp18.6 trillion in the first quarter of 2024. The PMN increased from the proposal in the 2024 Financial Notes that reaches Rp12.5 trillion. The PMN will be used to complete Trans-Sumatra toll road phase 1 as well as invest in Bogor-Ciawi Sukabumi toll road and Kayu Agung-Palembang-Betung toll road. “We hope that linking state equity participation to the progress of projects will make them more accountable, but it will not be included in the balance sheet, regardless of which project,” Sri Mulyani said.
Next, Bahana Pembinaan Usaha Indonesia will receive PMN worth Rp3.55 trillion in the first quarter of 2024. The PMN will be used to strengthen the capital of IFG Life to complete the policy transfer from the restructuring of PT Asuransi Jiwasraya. “PT Bahana Pembinaan Usaha Indonesia still lacks Rp3.55 trillion to complete the policy [transfer] that we expect to be realised in early 2024,” Sri Mulyani explained.
Meanwhile, Wijaya Karya will receive PMN worth Rp6 trillion in the first quarter of 2024. The PMN will be distributed to strengthen the capital structure of WIKA to fund national strategic projects (PSNs). The Finance Minister said that, in distributing PMN, the government determined the amount of PMN that will be distributed for an SOE programme. So, it will ensure that the PMN will be on target and not be used for the company’s other purposes. “So, even though we distribute PMN, we are earmarking the project. It will not be included in the balance sheet, especially if the SOE is still restructuring. To make sure that the PMN will not be gone along with the SOE’s financial problems,” Sri Mulyani said.
The government reckoned that the role of SOEs as development agents obligated them to carry out business activities to produce goods and/or services as well as implement assignments from the government.
SOEs are expected to positively contribute to the state budget to support government programmes.
To support the implementation of government programmes, the performance of SOEs is continuously monitored to optimise their roles, so SOEs can be an extension of the government and cooperate with the private sector to realise sustainable and inclusive economic development.
To carry out activities to look for profit, provide goods and services for the public, implement the government’s assignments, SOEs are provided fiscal support from the state budget from the government through several instruments/modalities. The instruments can be in the form of assignments to distribute subsidies, loans, government guarantees, and PMN.
Construction SOE working committee
Meanwhile, DPR Commission VI Member Intan Fauzi is encouraging the establishment of a construction SOE working committee in the construction sector. “The construction SOE working committee is a necessity as construction SOEs hold many responsibilities to build infrastructures from Sabang to Merauke,” she explained in a written statement on Monday (11/9/2023).
According to her, construction SOEs have a large funding. Hence, they must be monitored so that the dream of President Jokowi to connect Indonesia’s regions through infrastructures is not misused. She said that the establishment of the construction SOE working committee was considered due to the number of corruption cases in state-owned companies. Hence, the establishment of the working committee is crucial to reveal the parties involved in the cases. “The construction SOE working committee will be a part of DPR to monitor the government’s work. The goal is the same, to improve the people’s welfare,” she explained.
Intan also mentioned the agreement between the government and DPR to increase the capital of construction SOEs through PMN in the 2024 State Budget Draft. The additional capital for SOEs reaches Rp30.7 trillion. The amount of the budget has been increased by Rp12.1 trillion from Rp18.6 trillion in the 2024 State Budget Draft. The additional budget will be provided for the state-owned construction companies, namely Hutama Karya and Wijaya Karya.
