JAKARTA: State-run construction companies are setting much more optimistic targets this year after struggling to meet initial new contracts targets last year, with Adhi Karya being the latest among four publicly-listed companies to announce its full-year performance projection.
Adhi Karya is targeting to boost its new contracts by around 81 percent on an annual basis to Rp 25.1 trillion. The combined new contracts target for listed state-run builders is projected to hit about Rp 167.34 trillion this year, around 74 percent above last year’s new contracts realization.
“Our optimism is in line with the infrastructure development plan in Indonesia, especially with the increase in the infrastructure budget this year,” Adhi corporate secretary Ki Syahgolang Permata said.
Adhi, according to a recently published statement, aims to see state and local government-funded projects and projects from fellow state-owned companies to contribute 37.3 percent and 25.7 percent to its new contracts, respectively, while private funded projects are estimated to make up the remainder.
As for construction type, the company is aiming for building projects to make up 45.3 percent of its new contracts, whereas road and bridge projects are expected to contribute 21.3 percent.
Adhi saw its 2015 new contracts go up by 15.2 percent from around Rp 9.2 trillion in the previous year, but the company fell short in securing its initial target last year to double its new contract achievement from the 2014 figure.
State-run builders struggled to meet their targets in the first half of last year, despite having set up high new contract estimation on expected infrastructure projects earlier in the year, amid a slowing economy, sluggish infrastructure spending and bureaucratic transition.
Adhi, Wijaya Karya (Wika), Waskita Karya and Pembangunan Perumahan (PP) targeted combined new contracts to reach Rp 100.4 trillion in 2015. However, they only managed to secure around Rp 96 trillion by the end of the year, with Adhi and Wika failing to meet their new contracts goals.
The projects, however, are expected to progress this year as the government has pledged to maintain its focus on infrastructure development, with the 2016 state budget draft allocating Rp 313.5 trillion or 14.8 percent of total state spending for infrastructure.
In the first week of this year, the government signed agreements on 644 infrastructure project packages worth Rp 8.81 trillion, spurring confidence for speedier budget spending and economic growth improvement this year. The Public Works and Public Housing Ministry also surpassed its budget spending target last year with 94.4 percent budget disbursement by the end of the year, more than the 93 percent target, despite slow progress throughout the year.
The four companies have all previously said that massive new infrastructure projects expected to be launched this year, as well as delayed projects from last year, were expected to bolster their new contract targets this year.
Wika and Waskita set the most ambitious targets for this year, both aiming to double their new contracts target.
Waskita, according to its president director M. Choliq, is looking to see its new contracts hit Rp 60 trillion this year, compared to Rp 30 trillion last year, on the back of its massive toll road projects.
Wika, on the other hand, is looking to pocket Rp 52.26 trillion, far above the Rp 25.33 trillion in new contracts it won last year. Wika corporate secretary Suradi said previously that the high-speed railway project connecting Jakarta and Bandung was expected to bring in Rp 17 trillion of new contracts alone to company.
PP is targeting a more modest growth of around 15 percent to Rp 31 trillion, from Rp 27.01 trillion last year.
