Opportunities of Indonesian Infrastructure Towards Construction Companies

by | Jun 16, 2022 | Uncategorized | 0 comments

What are some developments for Indonesian infrastructure? Does it bring opportunities to foreign construction companies? Would it benefit the Indonesian economy?

Source: IREI

Indonesia has a large population and a strong domestic demand, which contributes to its positive growth outlook. One aspect of this positive outlook is the Government of Indonesia’s promise to improve infrastructure development. Indonesia has a significant need for infrastructure investment in roads, toll roads, airport railways, water, and power plants. A priority project includes the revitalization of 10 airports, several hydropower, and thermal power plants, toll roads, Mass Rapid Transit, and the construction of new and upgrading existing ports. 

Overview of Indonesian Infrastructure

Despite the challenges of the COVID-19 pandemic, Indonesia aims to strengthen public-private partnerships to accelerate infrastructure development and economic recovery. Indonesia’s geographical location presents a unique challenge for equitable development. Thus, the Indonesian government has been known to make provisions for infrastructure to support economic activities as a cornerstone. 

Overall, Indonesia had allocated IDR 182.3 trillion in investment funds for 2022, mostly for infrastructure. Finance Minister Sri Mulyani Indrawati had said that some State-Owned-Enterprises will be allocated a huge amount, such as Hutama Karya with IDR 23.83 trillion. The injection of funds is expected to support infrastructure development for transportation, housing, and energy security infrastructure. As well as to increase investment competitiveness and supporting access to housing finance for low-income  communities. 

Several problems regarding the provision of infrastructure in Indonesia could be because of the obstacles encountered at various project states from preparation to execution. As a whole, there is poor coordination between stakeholders which delays the decision making process.

To overcome these obstacles, the Indonesian Government has taken corrective measures in regulatory, fiscal, and institutional aspects. In 2014, the Government formed the Committee for Acceleration of Priority Infrastructure Delivery which aims to accelerate priority infrastructure and promote improvement in quality of project preparations by adapting OBC Guidelines. 

List of Main Infrastructure Projects in Indonesia

  1. Jakarta-Bandung and Jakarta-Surabaya high speed rail
  2. Trans-Java toll road
  3. Jakarta MRT (Mass Rapid Transit)

International Construction Companies Operating in Indonesia

  1. Bechtel

Bechtel is an American engineering, procurement, construction, and project management company founded in San Francisco. It is currently the largest construction company in the United States. In 2020, their revenue reached 17.6 billion. 

  1. Punj Lloyd

Punj Lloyd Limited is an Indian Engineering, procurement and construction company providing services for energy, infrastructure, and defense sectors. The company’s operations are spread across the Middle East and Africa, Asia Pacific, South Asia, and Europe. In 2019, their revenue reached USD 730 million, with their total assets being USD 1.5 billion in 2018.

  1. Penta-Ocean Construction Co. Ltd.

Penta-Ocean Construction is a major Japanese construction firm which specializes in marine works and land reclamation. They have offices in Tokyo, Singapore, Hong Kong, Indonesia, Malaysia, Egypt, Sri Lanka, India, Thailand, Vietnam, and Dubai. Their total revenue reached USD 3.69 billion with a net income of USD 36.4 million as of 2013.

Enter Indonesia’s Construction Industry with BRIGHT Indonesia 

With the growth of the Indonesian infrastructure, construction companies are much needed to fulfill the need of the infrastructure. With that, a local partner is needed to ease the process of market acquisition.

BRIGHT Indonesia provides several services such as Market Insight Research, Business Partnership Engagement, Management and Strategy Consulting, and Foreign Direct Investment. The services will help your business to:

  1. Assist you in expanding and developing your business by identification of potential partners.
  2. Secure the agreement between client companies and future Indonesian business partners by providing a list of potentially suitable partners, arranging business meetings, and acting as a liaison.
  3. Supporting our foreign client companies from the private sector with developing corporate or business unit strategies or helping your company from public sector organizations with public policy.
  4. Link client companies both from the private and public sectors in global foreign direct investment (FDI) through training and assisting your company in entering FDI source countries to gather investment for your company’s local markets.

For more information, email info@brightindonesia.net.

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