Bali Mandar Toll Road - Photo by Waskita Karya

JAKARTA (TheInsiderStories) – Two state-owned enterprises (SOEs), PT Wijaya Karya Tbk (IDX: WIKA) and PT Jasa Marga Tbk (IDX: JSMR) will operate and build new toll roads in the second semester (2H) of this year, said the two companies a view weeks ago.

WIKA joined with other toll road issuer PT Citra Marga Nusaphala Persada Tbk (IDX: CMNP) plans to develop the connecting lane of Ancol – Tanjung Priok Harbor Road in North Jakarta. Both companies hope that the toll road concession rights from the government can come out this year.

If the target is met, the construction process will begin at the end of 2018. The harbor road toll road project will stretch 7 kilometers in elevated or overpass.

Wijaya Karya and Citra Marga also met in the planned 18.18 kilometers Manila-Taguig Express Way toll road flyover in Manila, Philippines with an investment value equivalent to US$1.25 billion . The CEO Tuminyana has said, this year Wijaya Karya prepares capital expenditure funds amounting to Rp3 trillion for the development of toll road business.

Beside Ancol – Tanjung Priok Harbor Road, WIKA is also planning to initiate two other toll roads. First, Bandung Intra Urban Toll Road (BIUTR) joined with PT Summarecon Agung Tbk (IDX: SMRA) and PT Marga Utama Nusantara, a subsidiary of PT Nusantara Infrastructure Tbk (IDX: META). Second project is the Serang-Maja Toll Road cooperating with PT Hanson International Tbk (IDX:MYRX).

If all the project plans are realized, the total concession toll of Wijaya Karya as much seven concessions along the 291.5 kilometers across the archipelago, namely Bali Toll Road, Serang – Panimbang, Kunciran – Cengkareng, Soreang – Pasir Koja, Surabaya – Mojokerto, Balikpapan – Samarinda and Manado – Bitung.

Its sister company, Jasa Marga more aggressive to develop toll road across the nation. In 2H, the operator plans to operate new toll roads along the 52.35 kilometers.

Previously, CEO of Jasa Marga Desi Arryani said, six toll roads whose concessions are owned by the company are targeted to operate this year such as the 87.5 kilometer’s Ngawi – Kertosono toll road managed by PT Ngawi Kertosono Jaya and Solo – Ngawi toll road throughout 90.25 kilometers to be operated by PT Solo Ngawi Jaya.

Indonesian government owned six construction and toll road company namely Wijaya Karya, Jasa Marga, PT Hutama Karya, PT Waskita Karya Tbk (IDX: WSKT), PT Adhi Karya Tbk (IDX: ADHI), and PT PP Tbk (IDX: PTPP).

In the the first quarter (1Q) of 2018, Hutama Karya’s operating income rose 110 percent to Rp4.8 trillion (US$342.86) and managed to print a net profit of Rp 200 billion. Then Waskita Karya posted a 68.56 percent increase in operating revenues to Rp12.3 trillion, with net profit of Rp 1.7 trillion.

While, WIKA and ADHI managed to earn 64 percent revenue growth to Rp6.2 trillion and 92.8 percent to Rp 3.1 trillion and booked a net profit of Rp215 billion and Rp 73 billion, respectively.

PTPP’s revenues worth of Rp 3.6 trillion, up 26 percent over the same period last year. The company’s net profit rose 26 percent to Rp204 billion. At the same period, Jasa Marga’s revenue rose 92.8 percent to Rp9.6 trillion, with a net profit of Rp560 billion.

The deputy for SOEs ministry Ahmad Bambang has said that the ministry keep abreast of the financial development of these companies, including overseeing and helping to solve various problems that exist both bailout and funding alternatives.

Recently, many investors are concerned about the financial condition of the six SOEs because of the massive cost of infrastructure development which is mostly funded by loans. Finance Minister Sri Mulyani Indrawati and the ratings agency Standard & Poors also highlighted the debts of the four largest construction companies that increased dramatically.

Waskita Karya’s debt increased to Rp75.14 trillion in 2017, consisting of Rp 52.3 trillion in short-term liabilities and Rp 22.8 trillion in long-term Rp 44.69 trillion from previous year Rp44.69 trillion, consisting of short term Rp 31.28 trillion and long term Rp 13.37 trillion.

WIKA’s liabilities rose to Rp31.05 trillion, consisting of Rp25.9 trillion short-term and Rp 5 trillion long-term from 2016 Rp 18.6 trillion consisting of short term liabilities Rp 14.9 trillion and long term Rp 3.7 trillion.

ADHI’s loan also increased from Rp14.59 trillion, consisting of short-term Rp 12.9 trillion and long term Rp 1.6 trillion to Rp22.46 trillion, consisting of Rp 17.6 trillion in short-term liabilities and Rp 4.8 trillion long-term in 2017.

Other SOEs, PTPP’s debt lift to Rp27.53 trillion, consisting of Rp 20.6 trillion in short-term liabilities and Rp 6.83 trillion long-term last year compared to 2016 with total amount Rp20.43 trillion, consisting of short-term Rp 15.8 trillion and long term Rp 4.55 trillion.

President Joko Widodo and SOE ministry should be wary of SOE’s liquidity first rather than achieve the ambition to build infrastructure without injuring their finances. Everything must work in parallel so that in the future it will not disrupt the state’s finances.

US$1: Rp14,000