The so-called pervasive presence of these firms is especially true in the infrastructure sector, which may need Rp 4.7 quadrillion (US$347.8 billion) by the end of 2019.

However, speaking at an infrastructure forum on Thursday, State-Owned Enterprises Minister Rini Soemarno effectively rebuked such a concern, claiming that private firms found it hard to participate in infrastructure projects, including on Java, the country’s most developed island, because of the risks it entails.

Toll road projects on Java, for instance, are often hampered by disputes in the land acquisition process.

“What happens on Java and in other places is that many of these [private] companies have the license already secured. However, they do not construct it [the infrastructure] because the license says that the government must guarantee that the land is clear,” said Rini in the forum jointly hosted by the ministry, the Association of State-Owned Banks (Himbara) and The Jakarta Post.

In the end, the government ends up re-buying the license and building the toll roads by itself before it can hand over the infrastructure to private firms, she said.

“For example, our toll road in Bakauheni [in Lampung] was constructed by PT Hutama Karya, which was 100 percent owned by the government,” she said.

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