Jakarta. President Joko "Jokowi" Widodo urged subsidiaries of state-owned enterprises to go public this year to help support the government's agenda of accelerating infrastructure development across the archipelago and bolster the country's economic growth.
"Subsidiaries of state-owned companies should publicly list their shares because we need more funding to build more infrastructure projects," Jokowi told reporters at the Indonesia Stock Exchange (IDX) in South Jakarta on Tuesday (04/07).
"To accelerate infrastructure building, it is not possible to solely depend on bank loans," the president added.
Since taking office in 2014, Jokowi has prioritized developing the country's infrastructure sector, aiming to build as many as 15 new airports, 24 seaports, 2,650 kilometers of national roads, 1,000 km of toll roads, 3,258 km of railways and 60 ferry slips across the country by 2019.
However, to finalize all of those projects, the government would need Rp 5.519 trillion ($414 billion), some of which would have to come from the private sector.
According to the local Construction Contractors' Association (Gapensi), the sector was only the sixth top factor driving economic growth in this first quarter this year, though the association is optimistic that building will ramp up in the latter half of 2017.
Out of at least nine SOE subsidiaries that announced intentions to hold initial public offerings later this year – which are expected to raise a total of Rp 21 trillion in fresh funds – five specialize in construction development.
Construction equipment distributor PP Peralatan Konstruksi, housing developer PP Urban and power plant developer PP Energi, all subsidiaries of construction giant Pembangunan Perumahan (PP), previously announced plans to go public later this year.
Agus Purbiyanto, PP's finance director, told reporters last month that Peralatan Konstruksi will go public in either September or October, while PP Urban and PP Energi are expected to list their shares by year's end.
The construction equipment distributor will seek to raise Rp 2.5 trillion in fresh funds from its fourth quarter IPO by selling between 30-35 percent of its shares to investors.
The company will use its first half financial report for its corporate action plan.
Wika Gedung and Wika Realty, the building and leasing arms of state-controlled Wijaya Karya (Wika), also announced plans to go public later this year.
Adhi Persada Gedung, the property arm of state-owned company Adhi Karya, announced it will delay an IPO until early next year.