Govt to Bar SOEs from Working on Projects Worth below Rp100bn

TEMPO.CO, Jakarta - The Public Works and Public Housing will bar state-owned enterprises (SOEs) from working on projects worth below Rp100 billion. “It used to be a recommendation, not a rule. But we will issue a new rule,” Director General of Construction Development of Public Works Ministry Yusid Toyib told Tempo yesterday.

Yusid said that the rule will apply in 2018. He claimed that SOEs are no longer participate in the auction of projects worth below Rp100 billion. Once the rule applies, he said, the government system will automatically reject SOEs participation in such projects.

The regulation is aimed at allowing private firms to work on infrastructure projects, particularly those held by the Public Works Ministry. “It’s not true that SOEs have been given better chances,” he noted. As for projects worth above Rp100 billion, Yusid ensures that there will be no restriction. “All participants, whether SOE or private firms, will have to compete in a tender. This year, a private firm won a tender of a project worth above Rp100 billion,” he said.

Earlier at the Indonesia Infrastructure Finance Forum held in late July, World Bank Group President Jim Yong Kim called on the Indonesian government to stop giving privileges to SOEs in infrastructure projects. He suggested the government open up opportunities to private firm participation. Kim identified conflicting laws and regulations on public-private partnership (PPP) that undermine private firms in such projects.

In response to the remarks, Finance Minister Sri Mulyani expressed that the government has given the same opportunity to both SOEs and private firms. “President Jokowi has repeatedly said it in cabinet meetings, suggesting that in all economic activities-including infrastructure projects-to provide the same, equal opportunity and role to SOEs and private firms,” she said yesterday in Jakarta.

CAESAR AKBAR | GHOIDA R | FERY FIRMANSYAH