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State firm, Saudi firm sign $2b commitment to build low cost housing
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President Joko "Jokowi" Widodo and King Salman bin Abdulaziz Al Saud wave at Bogor Palace in West Java on Wednesday on the king's first day in Indonesia. (Antara/Puspa Perwitasari)
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tate construction firm PT Wijaya Karya (WIKA) signed a US$2 billion (US$26.7 trillion) commitment with Saudi Arabian firm Adil Makki Contracting Company (AMCO) on Thursday to build 8,000 low cost housing units, as part of government infrastructure improvement.
“The realization of the MoU can take place next year,” said Roslan Roeslani, chairman of Indonesian Chamber of Commerce and Industry (KADIN), after the signing ceremony during the Indonesia-Saudi Arabia Business Forum in the Grand Hyatt on Thursday.
KADIN invites more Saudi businesspeople to invest in infrastructure amid Indonesia's limited state budget and vision to accelerate development of roads, ports, water, sanitary systems and other public facilities.
The country is targeting to build thousands of kilometers of toll roads, dozens of dams, airports and seaports as well as an additional 35,000 MW of power plants within the 2015 to 2019 period to cut down its high logistics cost that now accounts for more than 20 percent of its Gross Domestic Product.
(Read also: Saudi Arabia confirms investment in Cilacap refinery: Minister)
According to an assessment by the National Development Planning Board (Bappenas), the total investment needs for the period amount to Rp 4.8 quadrillion (US$369.2 billion), of which national and regional budgets can only cover Rp 1.98 quadrillion.
WIKA and AMCO signing took place during the Indonesia-Saudi Arabia business forum attended by businesspeople and high officials from both countries, including Indonesia Investment Coordinating Board (BKPM) head Thomas “Tom” Lembong, Trade Minister Enggartiasto “Enggar” Lukita and Governor of the General Authority for Small and Medium Enterprises from Saudi Arabia, Ghassan Ahmed Al Sulaiman. (bbn)
