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Rp 48t stimulus to help state firms back govt's infrastructure push
The government has announced plans to inject Rp 48 trillion (US$3
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he government has announced plans to inject Rp 48 trillion (US$3.8 billion) of capital into a number of state enterprises ' more than nine times the amount spent last year ' with the expectation that they will support the government's infrastructure push.
Thirty-five state firms will receive the funds, primarily those in the fisheries, maritime, infrastructure, food materials, transportation and finance sectors, Finance Minister Bambang Brodjonegoro said.
'This [capital injection] is a new thing. The value is huge [...] and there are new companies that will receive the capital injection,' he announced recently, referencing the revised 2015 state budget currently being debated at the House of Representatives. Last year, the government channeled some Rp 5.3 trillion to state firms.
State-Owned Enterprises (SOEs) Minister Rini Soemarno said that the large capital injection was aimed at expanding the businesses and supporting the government's infrastructure plans.
President Joko 'Jokowi' Widodo wants to increase the annual growth rate in Southeast Asia's largest economy to 7 percent from the current level of 5 percent, with infrastructure the key to achieving it.
'If the state enterprises have enough funds, they can carry out their infrastructure-related projects smoothly. [...] It will eventually spur economic growth in the country,' Bahana TCW Investment Management analyst Budi Hikmat said.
Four publicly listed SOEs will get the funds through a rights-shares offering mechanism that will be absorbed by the government as stakeholders, namely construction firms Waskita Karya and Adhi Karya, miner Antam and lender Bank Mandiri.
But the plan will depend largely on the approval of the House, which began deliberating the state budget on Monday, and critics questioned whether this plan would be effective given that many state firms remained in the red.
Indonesian Forum for Budget Transparency (FITRA) investigation and advocacy head Ucok Sky Khadafi urged the House to make sure state firms requesting capital injections showed good performance in their financial audits.
'We will see which state enterprises need to be granted [capital injection], not only based on their current projects, but their overall track-records, such as business performances, managements, business sizes and future prospects,' House's Commission VI deputy chairman Dodi Reza Alex Noerdin said.
State shipping company Djakarta Lloyd, currently saddled by Rp 1.2 trillion in debt and with just one active vessel transporting coal, has yet to incorporate the government's capital injection into its
business plan for 2015, fearing it could take months for the House to approve the measure and disburse funds.
'If approved, we will use the [Rp 350 billion] funds to repair our six vessels and buy a new vessel so we can transport more commodities,' Djakarta Lloyd president director Arham Torik said.
Antam, another state-run enterprise hoping to acquire stimulus funds, would use the proposed
Rp 7 trillion to finance its smelter projects in Halmahera, North Maluku, and Mempawah, West Kalimantan. The smelters would help Antam process its raw products into semi-finished or finished products, president director Tato Miraza said.
