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Waskita's toll road projects will take 10 more years, govt says

Jakarta Post - January 2, 2024

Divya Karyza, Jakarta – The government has predicted it will take 10 more years to complete all of state-owned construction firm Waskita Karya's toll road projects, as policymakers seek to save the debt-laden company from collapse.

Deputy State-Owned Enterprises (SOEs) Minister Kartika "Tiko" Wirjoatmodjo said on Friday that the estimate included both the construction and divestment of Waskita's projects.

They are the Kayu Agung-Palembang-Betung Toll Road in Palembang, South Sumatra; the Bekasi-Cawang-Kampung Melayu (Becakayu) Toll Road in Greater Jakarta; and the Krian-Legundi-Bunder-Manyar (KLBM) Toll Road in East Java, part of the Surabaya-Mojokerto Toll Road.

The government, Kartika said, had assigned another state-owned construction firm, Hutama Karya, to continue the construction of the three toll roads and had given the company a capital injection of Rp 12.5 trillion (US$810.7 million).

"We, as shareholders, made a capital deposit through HK [Hutama Karya] for the toll road projects. These toll roads must be completed and, one day, divested. We hope that 10 years will be enough to complete and divest the toll roads," he told reporters at a press briefing in Jakarta.

In the meantime, he continued, the government would work to resolve Waskita's liabilities to its bondholders, a undertaking that Kartika acknowledged had yet to see significant progress.

For now, the government would focus on addressing the debt payments Waskita owed to banks. It would propose extending Waskita's repayment horizon for another 10 years.

In late December, Waskita Karya announced it was laying off 500 employees for efficiency reasons amid a push to right its finances.

The announcement came two and a half months after the company caused stock market jitters in mid-October by defaulting on bonds worth nearly Rp 1 trillion due in late September. It also missed earlier bond repayments in May and August.

In May, the Indonesia Stock Exchange (IDX) halted trading of Waskita shares as the government worked to restructure the debt-laden state-owned enterprise (SOE).

Similarly, the IDX suspended trading of PT Wijaya Karya (WIKA) stock after the state-owned construction firm missed a deadline on Dec. 18 to make a principal repayment on its sukuk (sharia-compliant bonds).

At the Friday press briefing, the government also announced it would look for solutions for 15 "problematic" SOEs next year, including possibly disbanding the companies.

Aside from poor finances, Kartika said, SOEs could be disbanded if they no longer had a clear business goal or function or if they no longer benefitted the country.

This year, the government has disbanded 7 SOEs: PT Merpati Nusantara Airlines, PT Kertas Kraft Aceh, PT Pembayaran Armada Niaga Nasional, PT Kertas Leces, PT Istaka Karya, PT Industri Gelas and PT Industri Sandang Nusantara.

Source: https://asianews.network/waskitas-toll-road-projects-will-take-10-more-years-govt-says