Indonesia firm eyes infrastructure projects amid China’s dominance
PUBLICLY listed state construction firm PT Wijaya Karya ( Wika) is eyeing to accommodate increasing demand from Africa amid Chinese companies’ dominance in the region’s infrastructure projects.
Wika spokesperson Mahendra Vijaya said the company has received offers f rom countries like Tanzania, Madagascar, Ivor y Coast, Senegal and Rwanda to work on their roads, bridges, power plants and governmental buildings.
The company expects to secure at least two trillion rupiah ($140.72 million) worth of projects from the deals, which will be fully revealed during the Indonesia-Africa Infrastructure Dialogue in Bali which will take place from August 17 to 22, Mahendra said.
Roads and ports, as well as apartments and buildings – including the Rwandan central bank building – are especially of interest, he added.
“We enter into third world countries by offering win-win solutions so as to support our service exports and make it sustainable,” Mahendra told the press recently in Jakarta.
Investments have been pouring into the African continent in the past two decades to support infrastructure projects, with $386.1 billion in infrastructure financing having been disbursed from 2013 to 2017, according to the Infrastructure Consortium of Africa (ICA).
China has been the biggest financier for African infrastructure projects, second to the public sector, alongside donors and multilateral
banks. China has participated in over 200 African infrastructure projects, according to Deloitte’s March report.
Chinese enterprises were also said to have completed and were building projects consisting of 30,000km of highways, 2,000km of railways and about 20,000MW of power generation capacity, among other things.
Mahendra said Wika already had several portfolios in countries such as Algeria, Taiwan, Timor Leste and Niger, hence opening up possibilities to venture into more countries. However, the company has always taken into account many factors in reviewing their projects.
“We have to study those projects thoroughly because we have to consider political and immigration risks for our employees,” he said, adding that commercial factors would also be taken into account.
Mahendra said Wika would strive to reach a “win-win” solution both short- and long-term with the African countries, for Wika and for Indonesia.
President director Tumiyana said the projects could hopefully help meet the company’s target this year as it was seeking about four to five trillion rupiah in new contracts from outside of the country.
So far this year Wika has secured about 1.5 trillion rupiah from overseas projects or equal to 9.92 per cent of its 15.23 trillion r upia h in new contracts in t he first half. Overa ll, Wika’s projects only reached a quarter of its 61.74 t rillion r upia h target by mid-year.
Despite the low achievement relative to the target, Tumiyana remained upbeat the firm would reach its target as he predicted that its contract value to more than double the midyear accomplishment and reach 37 trillion rupiah in the third quarter.
Hiking the contract value would be major contracts such as the second phase of the MRT and LRT, power plants in Sumatra and several toll road projects in Java, he added.