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tate-run construction companies have shown mixed responses to the government'€™s plan to have them raise Rp 50 trillion (US$3.8 billion) from the bond market in August this year to finance a number of infrastructure projects.

They were responding to State-Owned Enterprises Minister Rini Soemarno who said on Thursday the government was reviewing the possibility for state construction companies to issue a total of Rp 50 trillion worth of bonds in August.

PT Wijaya Karya (WIKA) corporate secretary Suradi said on Friday the bond issuance would probably not happen any time soon as many things had to be reviewed first before exercising the option.

'€œI think August will be the time when the feasibility study for the issuance will be completed, not the time when the bonds are issued,'€ he told The Jakarta Post, adding that his company had not yet received details from the State-Owned Enterprises (SOEs) Ministry regarding the plan.

A number of factors, such as gearing ratio and equity, had to be taken into account to measure concerned companies'€™ financial health, he added.

WIKA'€™s gearing ratio currently hit around 60 percent, while its equity stood at around Rp 4 trillion, according to Suradi.

Gearing ratio refers to the fundamental analysis ratio of a company'€™s level of long-term debts compared to its equity capital.

Having a different point of view, PT Waskita Karya finance director Tunggul Rajagukguk told the Post he was optimistic that the bond issuance would go as planned.

'€œThe bond issuance is currently still under review, but nothing needs to be worried about as it won'€™t take long. We are experienced in exercising such corporate actions,'€ he said.

Waskita is set to release new shares worth around Rp 5.3 trillion between June 15 and 22, with Rp 3.5 trillion coming from the government in the form of capital injection and the remainder coming from the public.

According to Minister Rini, the China Development Bank (CBD) and the Industrial and Commercial Bank of China (ICBC) would be the standby subscribers for the bonds.

'€œThe Chinese banks have expressed their commitment to support funding our infrastructure development, which is currently underway,'€ she told reporters.

The funds raised from the bond issuance would be used to finance various infrastructure projects, including the trans-Sumatra toll road, she added.

The 2,700-kilometer mega toll road will comprise 24 sections connecting major cities across the island of Sumatra and cost around Rp 360 trillion.

The kick-off of the project was marked with the construction of the Medan-Binjai section in North Sumatra in December last year.

State enterprises WIKA, Waskita, PT Adhi Karya, PT Hutama Karya and PT Jasa Marga are among the state companies involved in the project.

Under the administration of President Joko '€œJokowi'€ Widodo, Indonesia plans to carry out massive infrastructure projects to eventually boost its competitive edge.

Regarding the plan for a Rp 50 trillion bond issuance, the SOEs Ministry'€™s deputy, Gatot Tri Hargo, said that state firm Bahana Securities would become the underwriter.

Bahana Securities, however, did not respond to the Post'€™s enquiries regarding the bond issuance at the time of writing.