SOEs to be Barred from Projects Below Rp 30 Billion

TEMPO.CO, Jakarta - Minister of State Owned Enterprise Rini Soemarno recently signed a Memorandum of Understanding (MoU) with the National Construction Business Association (GAPENSI) stating that state-owned construction companies are not allowed to undertake any construction projects valued below Rp 30 billion.

"The MoU has been agreed in respect to the upcoming ASEAN Economic Community 2015," said Chairman of GAPENSI Iskandar Hartawi. GAPENSI had also asked the government to establish a new bank aimed specifically at funding construction projects and providing funds for construction companies.

State-owned construction company PT Wijaya Karya (Wika) has no issue regarding the policy because the projects that the company takes on are usually valued above Rp 50 billion. Wika’s company secretary Suradi, said that the company no longer handles minor projects. "Even if there are any [minor projects], it is usually only relating to design and consulting services," he said.

Suradi added, projects with a value of Rp 30 billion or less are usually found in villages and it is usually carried out by local contractors. Their source of fund would be the provincial budget. The projects are usually in the form of bridge and road construction. "As for Wika, we take on toll road projects valued at Rp 500 billion," he said.

NURIMAN JAYABUANA | FAIZ NASHRILLAH