JAKARTA (TheInsiderStories) - The Joko Widodo government continues its drive to develop infrastructure and public utilities this year which is reflected in the major projects to be developed by the country’s state owned companies (SOEs). This year alone, the SOEs will develop a number of major projects such as oil refineries, toll roads, power plants, cold storages with total value of Rp347 trillion ($24.96 billion) and total number of 73 projects.
“Some major projects will be developed by Pertamina and PT Perusahaan Listrik Negara (PLN),” the State Owned Enterprise Minister Rini Soemarno said at a press conference late Tuesday (Jan. 19).
The minister said the infrastructure projects are part of the total Rp795.99 trillion projects to be developed by the SOEs in the period of 2015-2017. Last year, the SOEs developed Rp248.52 trillion worth of major projects. The remaining projects will be developed in 2017.
President Director of Pertamina Dwi Soetjipto said among major projects to be developed by Pertamina this year are oil refineries, including the Cilacap oil refinery with total investment of around $5.2 billion, Balikpapan refinery worth $2.6 billion, Olefin Center in Tuban, East Java worth $3-4 billion and new Tuban refinery with estimated cost of $8 billion.
“We are planning to kick of the construction of these projects this year,” Dwi Soejtipto said, adding that the law oil price should not hamper the planned development of these projects. Pertamina, he added, will also spend between Rp36-40 trillion rupiah to develop upstream projects this year.
“Some projects will be related with the government’s drive to achieve food security such as revitalization of a number of sugar plants, construction of ammonia plants as well as cold storages projects to be developed by state logistic company Bulog,” Minister Rini said.
The minister expects some projects to hit the ground soon such as the Jakarta-Bandung high speed train (HST) which will be developed by a consortium of Indonesia state owned companies and China railway firm, while the Terminal III expansion project of the Soekarno Hatta Airport is expected to start operating in June this year.
Meanwhile, President Director of PLN Sofyan Basyir said PLN this year will focus on develop power plant projects as part of the government’s drive to develop 35,000 MW. The power plant projects will be mostly developed by independent power producers (IPPs), while PLN will act as buyer.
Recently, the government completed the tender of power plants with total capacity of 17,000 MW with estimated investment of $24 billion. These projects will be developed in the period of four years or $6 billion per year. PLN is expected to develop a quarter of these 35,000 MW power plant projects.
Based on the SOEs ministry data, among the infrastructure projects, which have begun their construction in 2015, are Trans Sumatra highways, the four segments toll road that had been planned since 2005 but was stalled on financial reasons until 2015 when state construction firm PT Hutama Karya took over the project. The Trans Java toll road is being built by PT Waskita Karya Tbk (IDX: WSKT) and PT Jasa Marga Tbk (IDX: JSMR).
Other projects that have been launched in second quarter were Light Rail Transit (LRT) project which is developed by PT Adhi Karya Tbk (IDX: ADHI), the High Speed Train by SOEs consortium led by PT Wijaya Karya Tbk (IDX: WIKA), a new port in Makassar which is under construction, is due to be completed in 2018 and energy projects such as the power plants in Jayapura by PT Perusahaan Listrik Negara (PLN) are considered 90 percent completed and are targeted to start commercial operation this year.
She added in order to help the nation’s needs for food, the SOEs plan to develop a new sugar plant including on-farm sugar plant to produce refined sugar product. Rini said by 2019 Indonesia will be self-sufficient in sugar production.
This year, she said, several projects will be ready for development such as expansion of Semen Kupang in East Nusa Tenggara province and new cement plant Semen Pidie in Aceh, fertilizer plant in Papua by PT Pupuk Indonesia and Balikpapan-Bitung as well as Balikpapan-Samarinda toll road projects.
Rini said most of project financing will come mostly from state banks and part of it from foreign loans. To help the financing of the projects, the government has injected fresh funds worth Rp 41.42 trillion to the state owned companies this year and Rp 39 trillion in 2016.
SOEs Performance
Currently, the ministry manages 118 SOEs, down from 119 companies as PT Reasuransi Umum Indonesia merged with PT Reasuransi Indonesia Utama. The SOEs total assets reached Rp 5,395 trillion at end 2015, up from Rp4,577 trillion in previous year. In 2016, SOEs assets are projected to increase to 6,240 trillion.
The combined net profits of SOEs in 2015 reached Rp150 trillion, down from Rp159 trillion in previous year, whiler revenues reached Rp1,728 trillion, down from Rp1,932 trillion in previous year. The SOEs net profits are projected to rise to Rp172 trillion this year, while revenues are projected to rise to Rp1,969 trillion.
The number of SOEs that posted losses declined to 18, compared to 27 companies in 2014 with combined loss of Rp5.8 trillion, compared to Rp10.2 trillion in previous year. Meanwhile, their tax contribution to the government reached Rp202 trillion, lower than in previous year of Rp211 trillion.
Following the issuance of the fifth economic package, 43 SOEs revalued their assets that helped add tax revenues of Rp10.61 trillion.
The realized people’s credit (KUR) extended to the micro, small and medium enterprises (MSMEs) reached Rp22.8 trillion with total debtors of 1 million. In 2016, the government targets to distribute KUR of Rp100 trillion through state owned banks and private banks.
In addition, 36 SOEs receives capital injection of Rp41.42 trillion from the government in 2015 which will helped the state owned companies to fund projects worth Rp271.76 trillion. (*)