Australian contractor, McConnell Dowell, and state-owned construction firm, PT PP Tbk (IDX: PTPP) partnering to build Palembang City Wastewater Treatment Plant project - Photo by the Company

JAKARTA (TheInsiderStories) – Australian contractor, McConnell Dowell, and state-owned construction firm, PT PP Tbk (IDX: PTPP) partnering to build Palembang City Wastewater Treatment Plant (IPAL) project, said the company last week. The project will be built in 5.8 hectares lans in Kalidoni District, Palembang, in South Sumatera with costs US$45 million.

According to the director, M. Toha Fauzi, funding for the construction comes from an Australian government. Other main project, financed by state budget and regional government of Palembang and South Sumatra provincial government.

The plant have a capacity of 20 thousand debits per day and is targeted to be completed and operational in early 2022. The project development aims to support access to clean water and household sanitation in Palembang City and benefit more than 100,000 people.

Recently, PTPP, intends to stop a number of projects due to the COVID-19 pandemic that hit almost all economic sectors, including construction and property businesses. Until July 15, 2020, there were 16 projects in the status of slowing down, nine projects in lockdown status and six projects suspended.

According to the spokesman, Yuyus Juarsa, due to the suspension, the company’ revenue is estimated drops by 50 percent from last year of Rp24.66 trillion (US$1.76 billion). The decline in the company’ net profit is also expected to exceed 75 percent compared to 2019 of Rp1.5 trillion.

This decline in performance, he said, would have an impact on the PTPP‘ ability to pay its principal debt obligations. At present, the company has total liabilities of Rp 1.63 trillion. He said, the company would take a number of strategies to overcome this problem.

In addition, this state-owned enterprise will carry out special mitigation for operations and finance and conduct stress tests related to financial performance to project performance until the end of 2020. Before COVID-19 hit, the firm budgeted capital expenditures of Rp6.5 trillion, consisted of financing banks, other financial institutions or strategic partners, and came from company cash.

Recently, the company has signed a joint development project for the Mandalika Special Economic Zone in West Nusa Tenggara with PT Indonesia Tourism Development (ITDC). The road construction projects worth Rp900 billion are directly owned by ITDC, where the financing uses the Pre-financed project scheme. he construction of this road will be used for the holding of the Indonesian MotoGP which will take place in 2021.

This project is part of the Mandalika Circuit Area which is built on 52.5 hectares of land within The Mandalika Super Priority Tourism Destination Region. In addition, the contractor manages several projects such as two steam power plants in East Nusa Tenggara and North Sulawesi with a total cost of IDR 8 trillion. The capacity of each steam power plant is 2×50 megawatts (MW).

The first steam power plant was carried out on an area of ​​30 hectares in West Kupang, East Nusa Tenggara. The second steam power plant was built on 32 hectares of land in Bolaang Mongondow, North Sulawesi.

PTPP is optimistic to complete the first project in West Kupang in three years and in Bolaang Mongondow in 39 months. It is also expected that two steam power plants will be ready to operate by 2022, so that they will be able to electrify several villages and sub-districts in the region.

The company also became a contractor for the construction of a ferro nickel smelter located in Kolaka, Southeast Sulawesi with a total investment of Rp14.5 trillion. The contractor has signed a contract to build a smelter with PT Ceria Nugraha Indotama as an investor in April 2019.

The company will work closely with the Chinese ENFI consortium to develop the smelter project. Management said that the project to build a ferrous nickel smelter would require an investment of Rp4 trillion in the first phase. The plant has a total capacity of 4 × 72 MVA and targets to operate in 2021 and produce 229,000 tons of ferro nickel per year.

PTPP also plans to sell some of its ownership in three toll road concessions, namely the Pandaan – Malang toll road in East Java (35 percent), the Kualanamu – Tebing Tinggi toll road (15 percent) and the Kuala Tanjung Port (25 percent) in North Korea. Sumatra.

The developer expects to get around Rp500 billion from equity sales. In addition, the company is also eyeing construction projects in the Philippines and port development projects in Malaysia worth Rp2 trillion, after getting a project in Vietnam with a value of Rp500 billion.

Now, the developer managed several projects such as two steam power plants in East Nusa Tenggara and North Sulawesi with total costs Rp8 trillion. The capacity of each steam power plant is 2×50 megawatts (MW).

The first steam power plant was carried out on an area of 30 hectares in West Kupang, East Nusa Tenggara. The second steam power plant was built on 32 hectares of land in the Bolaang Mongondow, North Sulawesi.

The construction firm was optimistic to complete the first projects in West Kupang in three years and in Bolaang Mongondow in 39 months. Its also expected the two steam power plants will be ready to operate in 2022, so it will be able to electrify several villages and sub-districts in the East Nusa Tenggara and North Sulawesi regions.

PTPP also become a contractor for ferro nickel smelter construction located in Kolaka, Southeast Sulawesi with a total investment of Rp14.5 trillion. The contractor has signed a contract to build a smelter with PT Ceria Nugraha Indotama as an investor in April 2019.

Abdul Haris Tatang, a director at the company, stated that  the company will be cooperate with Chinese’ ENFI consortium to construct the smelter project. The management said that the project to build the ferro-nickel smelter will require an investment of Rp4 trillion in the first phase.

The plant has a total capacity of 4×72 MVA and targeting to operate in 2021. The production is projected to reach 229,000 tons of ferro nickel annually at a rate of 22 percent – 24 percent.

US$1: Rp14,000

Written by Staff Editor, Email: theinsiderstories@gmail.com