JAKARTA (TheInsiderStories) – State run property and construction firm, PT PP Tbk (IDX: PTPP) started the construction of the Tamblang Dam project in Buleleng, Bali, with total values of Rp769 billion (US$53.03 million). Through the National Strategic Project, Indonesian government aimed to build 65 dams across the archipelago until 2024.
The CEO, Novel Arsyad, said on Wednesday (08/12), that the project was carried out in 48-months period. The dam build in 59.79 hectares of land and spread over four villages. The project is carried out by the company together with local firm, PT Adi Jaya, in the form of Joint Operations.
This project is targeted to be completed in 2022 and can be used for the needs of a Micro Hydro Power Plant of 2×269 kilowatt hours. The Tamblang Dam is designed to have a storage capacity of around 7.6 million cubic meters with a height from the bottom of the river reaching 68 meters.
Last july, the management just announced to stop a number of projects due to the 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 in the status of being suspended.
Due to the suspension, PTPP’ revenues is estimated to be corrected by 50 percent from last year worth of Rp24.66 trillion. The decline in the company’ net profit is also expected to exceed 75 percent compared to 2019 of Rp1.5 trillion. The declined would have an impact on its ability to pay its principal debt obligations.
At present, the company has total liabilities of Rp1.63 trillion and the company would take a number of strategies to overcome this problem, he said. 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. The project’ funding is also supported by members of state-owned banks. The 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 Rp8 trillion. The capacity of each steam power plant is 2 × 50 megawatts.
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.
PTPP 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.
The issuer 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 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. PTPP also eyes construction projects in the Philippines and port development project in Malaysia worth of Rp2 trillion, after getting the project in Vietnam with worth of Rp500 billion.
The state-owned firm was founded in 1953. In 2015 the builder listed the shares at the Indonesian Stock Exchange. Then, its subsidiary PT PP Properti Tbk (IDX: PPRO) listed in 2017 and other unit that operates a heavy equipment-based contractor, PT PP Presisi Tbk (IDX: PPRE) took the floor on the local bourse.
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