PP Presisi finance director Benny Pidakso acknowledged the mounting concern over whether the infrastructure boom experienced under President Joko “Jokowi” Widodo’s administration could be sustained.

“The market is not created solely by government spending. The bigger [market] will derive from the expenditures of state-owned enterprises and the private sector,” he said recently.

Data from the subsidiary of state-owned construction firm PT Pembangunan Perumahan (PT PP) shows that in 2016 alone, the government only contributed 2 percent of the overall infrastructure projects, while a staggering 82 percent belonged to SOEs and the remaining 16 percent derived from private companies.

As of July, no new contracts had been offered by the government. However, contracts from SOEs comprised up to 70 percent of all new contracts, while the rest came from the private sector.

Benny said that although the parent company, PT PP, currently made up around 40 percent of the SOEs contracts, there would still be a promising market going forward.

PP Presisi provides mostly civil works services to SOEs and private companies, as well as heavy tool rentals to aid construction.

At present, the company is involved in the construction of the Solo-Kertosono toll road in Central Java as well as the construction of the Way Sekampung Dam in Lampung, among other projects.

The present administration has set ambitious targets to build infrastructure, such as toll roads, airports, seaports and railways, to enhance connectivity across the sprawling archipelago.

Benny said he believed the infrastructure push pursued by the Jokowi administration would also be adopted by the next administration after the 2019 election.

PP Presisi’s optimism about the continuity of infrastructure construction has also seen it set an ambitious target to double its revenue and profit next year, in addition to expanding its business.

While the company declined to elaborate on its revenue and net profit target this year, its revenue hit Rp 441 billion (US$32.5 million) in the January-July period, more than double the figure booked in the same period
last year.

Accordingly, its net profit also jumped by more than double the figure of last year, reaching Rp 38 billion.

PP Presisi has earmarked more than Rp 1 trillion for capital expenditure next year to support the construction of dams, toll roads and airports, Benny said. It allocated Rp 1.8 trillion this year.

The company’s capital expenditure for this year and next year will be partially funded by an initial public offering (IPO) on Nov. 20. The company aims to sell 35 percent of its shares, equal to 4.2 billion shares, to the public in order to garner Rp 3 trillion, of which 70 percent will be spent on capital expenditure and the rest used as working capital.

“The biggest capital expenditure will be for procurement of heavy machinery like bulldozers and excavators,” Benny said.

PP Presisi president director Iswanto Amperawan said that the construction of infrastructure was dependent on heavy machinery.

“That is where we excel, so we can get involved in any line of work, be it building projects or civil works projects,” he said.

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