State Construction Companies Urged To Tap Epc Sector
Bisnis Indonesia, Jakarta - 05/01/2010
Indonesia’s Ministry of State-Owned Enterprises encouraged PT Wijaya Karya (Persero) Tbk, PT Adhi Karya (Persero) Tbk and PT Pembangunan Perumahan (Persero) Tbk (PTPP) to acquire companies operating in engineering, procurement and constructions (EPC) sectors.
Deputy Minister of Infrastructure and Logistics at the SOEs Ministry Sumaryanto Widayantin said that it is the time for state-owned construction companies to expand their business into EPC sector and lessen the activities in public housing projects.
“State-owned construction company may acquire companies such as PT Rekayasa Industri. There are lot more EPC companies that are possible to be acquired simply to support the inorganic growth,” he said today.
According to Sumaryanto, most projects undertaken by state-owned construction companies are originated from the Ministry of Public Housing (PU). The budget allocation for the infrastructure projects reach around IDR35 trillion per year.
Meanwhile, there are still many other projects than the projects of Ministry of Public Housing, for example, PLN that averagely allocates up to IDR100 trillion per year to develop its electricity facilities.
“Thus, if these companies only focus on the projects of Ministry of Public Housing, their revenues only reach below IDR35 trillion while if they penetrate into the EPC sector, they may derive higher revenues. IDR100 trillion is only allocated by PLN, excluding other companies,” said Sumaryanto.
So far, the state-owned construction companies have tapped opportunities in EPC sector but they develop it organically.