JAKARTA (TheInsiderStories) - The construction firm, PT Wijaya Karya Bangunan Gedung Tbk (IDX: WEGE) or WIKA Gedung, eyes 20 percent of the capital city projects in East Kalimantan, said the management, last week. As background, for the first stage of the National Strategic Project (NSP), the government prepared an investment Rp51 trillion (US$3.62 billion).
The CEO, Nariman Prasetyo, reported, until the end of November, the company has pocketed a new contract values amounting to Rp2.32 trillion, or 68 percent of this year targets Rp3.44 trillion. Together with existing contract, the unit of state-owned contruction firm, PT Wijaya Karya Tbk (IDX: WIKA), targetin the contract rises 19.79 percent to Rp27.29 trillion compared to last year.
“The composition of the new contracts in 2020 comes from the government 42 percent, state firm 38 percent, and private 20 percent,” explained Prasetyo
He adds, to support the targets prepared capital of WIKA Gedung Rp692.4 billion. With these projects, he expect the revenues of the company could reached Rp8.63 trillion with a net profit Rp587 billion in 2020.
Last year, President Joko Widodo, had asked blessed from the parliament members to move the Indonesian capital city to Penajam Paser Utara and Kutai Kartanegara regencies. Based on the National Development Planning Agency in 2019, the relocating planned needs a budget of Rp 466 trillion.
Of that amount, the government only takes a portion of Rp30.6 trillion (6.56 percent) and the remaining budget needs are met by the private sector. A budget of Rp340.4 trillion is provided through the government and business entity cooperation (PPP) schemes, and around Rp95 trillion is provided by the private sector.
Indonesia will start the construction of the new capital city in 2021, with a view to having the administrative center fully operational by 2024. Coordinating minister for maritime and investment affairs, Luhut Binsar Pandjaitan, the government will form an authority agency to run the project.
Widodo has cited the allocation of new capital need to ease the burden on Jakarta and the rest of Java island, and to jump-start the economy in other parts of the archipelago nation. The capital will be built on 180,000 hectares of land already owned by the government, thereby minimizing the cost of land acquisition. Earthquakes, flooding, and volcanic eruptions are less common in that area.
“The economic gap between Java and outside Java has continued to widen despite the regional autonomy policy launched in 2001,” said the head of state.
He noted that 54 percent of Indonesia’ more than 260 million people reside on Java and 58 percent of the country’ gross domestic product is produced on the island, despite its being the smallest of Indonesia’s five major islands. Balikpapan is home to oil refineries and a port, making it an economic center of Kalimantan. Samarinda is the capital of East Kalimantan Province.
Compared with other parts of Kalimantan previously considered, much of the necessary infrastructure is already in place. Both cities have an international airport, and they could be connected to the rest of the island via highways and railways.
Earlier, he said he wants the new capital to be green, smart city, meaning he wants it wired with the latest information and communications technology. The aim is also to keep the city compact, so it does not harm surrounding tropical rain forests.
US$1: Rp14,100
Written by Editorial Staff, Email: theinsiderstories@gmail.com
