Indonesia`s Construction Market Largest in ASEAN

TEMPO.CO, Banjarmasin - Yusid Toyib, the director general of constructions at the Public Works Ministry and Public Housing, called on domestic construction companies to improve their competitiveness and participate in the national construction business market. According to Toyib, the market share of construction business in Indonesia has reached 67 percent of the total market share in South East Asia.

In the period of 2010-2014, Toyib recorded that there were a 50 percent increase percent in the number of foreign construction companies in Indonesia. In 2010, the ministry recorded 195 foreign construction companies and increased to 295 in 2014. Toyib revealed that national construction companies had faced a number of issues, including funding, human resources, equipment and minimum incentive provided by the government.

“I have asked the National Construction Development Agency (LPJK) to set the standards for companies and workers. We encourage construction domestic construction companies to participate in international projects,” Toyib said.

According to Toyib, the construction market in Indonesia ranks fourth after China, Japan, and India. The construction capacity in Indonesia has increased annually from Rp 411.53 trillion (US$29.3 billion) in 2012 to Rp 521.7 trillion (US$37.3 billion) in 2014.

“Our infrastructure competitiveness ranks 72 after Malaysia. But we’re still above Vietnam, Philippine and Thailand. This year, the target is to improve the position,” Toyib said.

In relation to the infrastructure project this year, Toyib expressed optimism that the ministry would be able to absorb 93 percent of the total budget of Rp 118.5 billion (US$8.4 million).

“The projects were commenced in May, so it’s not surprising that the budget absorption has just progressed to 45 percent,” Toyib added.

DIANANTA P. SUMEDI