Business

WIKA signs contract to
build Rp 225 billion dam
in Batam

State construction firm PT Wijaya Karya (WIKA) has signed a contract to build a large dam in Batam worth Rp 225 billion (around US$21 million).

"We signed the contract Wednesday," finance director of the publicly listed company, Ganda Kusuma, said at the office of the State Ministry for State Enterprises in Jakarta Thursday.

The dam, dubbed as the Tembesi Dam, is projected to increase Batam's potable water production capacity significantly by collecting rain water and water from Tembesi Bay. The salt water will seep through a one-way valve, thus leaving insipid water to be used for consumption.

Currently, Batam's largest dam serving the same purpose is the Duriangkang dam.

The Tembesi dam is another addition to WIKA's list of booked projects this year, which in total are worth Rp 15 trillion, Ganda said.

All these projects will help the company reach a targeted net profit of Rp 175 billion in 2009, which is around 21 percent higher than the estimated Rp 144 billion during 2008.

The forecast is based on the assumption that revenue would reach Rp 7.4 trillion compared to 6.4 trillion a year earlier.

The higher revenue and profit targets, according to Ganda, were realistic despite the current adverse conditions, with the government committed to rejuvenating infrastructure projects to help keep the economy growing by at least 5 percent.

The government for instance, has allocated a budget of Rp 34.98 trillion for the public works ministry this year.

Despite encouraging figures, the company's shares at the stock market have not escaped the downturn that began last October, prompting the company -- on the government's urging -- to launch a buyback program, emulating other publicly listed state firms.

"WIKA's shares once managed to reach a value of Rp 465 a piece, however when we began the buyback scheme, they were priced as low as Rp 165," Ganda said.

The company has allocated some Rp 140 billion to buy back its shares, although it has so far only spent Rp 25 billion doing this. (dis)

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