Workers are seen building a road in Bekasi, West Java, Saturday (16/9). (ANTARA)
JAKARTA, GRES.NEWS – The Indonesian Builders Association (Gapensi) wants the government to raise the maximum value of infrastructure projects that forbids state-owned companies and large companies from participating, from Rp50 billion (US$3,765,060) to Rp100 billion to bolster the private sector’s role in infrastructure projects launched by the government.
"There have been widespread criticisms that the private sector have not been contributing much. That is true. We view that Rp100 billion would be enough to boost the private sector’s role next year," said H. Andi Rukman Karumpa, Secretary General, Central Executive Board of Gapensi, in a press release sent to gres.news, Tuesday (19/9).
The government has introduced categories based on the value of projects to determine the scale of companies that may participate in certain infrastructure projects.
- Below Rp2.5 billion for small construction companies.
- Rp2.5 billion-Rp50 billion for ‘medium-1’ construction companies.
- Rp50 billion-Rp100 billion for ‘medium-2’ construction companies.
- Over Rp100 billion for large and foreign companies.
The government previously explained that they introduced the categorization to give larger opportunity to local companies based in the region where the projects are taking place. They explained that strategy will narrow the gap between small, medium and large construction companies.
Andi acknowledges that the national construction market is still being dominated by large companies. "There are not may large construction companies, but they control 87 percent of the market share," Andi said.
Andi added that the construction sector contributes significantly to the national economic growth, namely 105 percent of the gross domestic product. Furthermore, Indonesia’s construction market is the largest in Southeast Asia and the fourth largest in Asia, trailing China, Japan and India.
This year, the government has set a budget of Rp387 billion for infrastructure developments. (mag)