Waskita secures contracts worth Rp 100t for 2016
The Jakarta Post
State-owned construction firm PT Waskita Karya has secured contracts for projects worth Rp 100 trillion (US$7 billion) for next year.
Waskita Karya president director M. Choliq said the majority of the contracts were for new toll roads, while some were for the continuation of existing projects that the company was already working on.
The contracts, he added, were in line with the company's aim to expand its business as a contractor and to take on a greater role in developing the archipelago's road infrastructure.
'Up to Rp 70 trillion comprises new toll road development across Indonesia. The reason why we are taking on many toll road projects is that they provide a profitable win-win opportunity for both Waskita Karya and our investors,' Choliq said on the sidelines of the State-Owned Enterprise Forum in Jakarta on Thursday.
To help fund the projects, Waskita Karya plans to allocate up to Rp 10 trillion in capital expenditure, sourced mostly from bank loans and the company's internal funds. A possible rights issue in the second half of 2016 is also on the cards.
Waskita Karya is not among 22 state-owned companies that are eligible to receive state capital injections (PMN) worth a total of Rp 31.32 trillion for 2016, the disbursement of which is still on hold following a request by the House of Representatives.
Even without a capital injection, Choliq said the company was confident in the feasibility of its project funding plans.
He further explained that another reason why the company chose to focus on toll roads was to help complete master plans that were designed years ago but have been suspended.
The projects put on hold include toll road segments connecting Bogor and Sukabumi via Ciawi in West Java as well as Pasuruan and Probolinggo in East Java. Waskita Karya aims to take over those projects.
'Some of these projects were designed 20 years ago, making them suitable for the long run. By acquiring these stalled projects, we can offer three to four additional supply chains that could benefit investors, such as precast concrete,' he added.
'The opportunities can be harnessed, and the construction activities can continue to flourish.'
New toll road projects due to begin in 2016 include an arduous toll road system in Bali, connecting the Kuta area with Canggu, Tanah Lot and Soka, which then extends further to Pekutatan, Gilimanuk and Lovina.
The company is also in charge of several segments of the under-construction Trans-Java toll road, which is built in collaboration with state-owned toll road operator PT Jasa Marga. Jasa Marga expects the project to finish in 2017.
As a result of these projects, Waskita Karya predicts net profit of Rp 2 trillion in 2016.
Choliq insists that all toll road projects, new and carried over, would be completed by 2018. As for revenue, the company is aiming to reach Rp 30 trillion in 2016, which would mark a 100 percent increase from the 2015 target of Rp 15 trillion.
As reported earlier, Waskita Karya is planning an initial public offering (IPO) of its recently established precast concrete subsidiary Waskita Beton Precast (WBP) in the second half of next year. The company hopes to collect proceeds of Rp 3.5 trillion from the IPO.
Waskita spun off its precast concrete subsidiary in October last year following a massive expansion launched in response to growing domestic demand from public infrastructure projects.
Choliq said Waskita wanted to benefit from the numerous toll road construction projects by supplying precast concrete, especially to projects run by the company itself.
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