Not sure whether this counts as good news or not: The Indonesian government is advising state-owned construction firms to secure a slice of the expected construction boom, acquiring smaller private firms in order to compete with larger foreign companies in bidding for projects.

There’s a potential Rp600 trillion (US$66.6 billion) worth of construction to be done in Indonesia, with the government to supply about Rp140 trillion for infrastructure projects alone.

The State Enterprises Ministry’s deputy for infrastructure and logistics, Sumaryanto Widayatin, said state-owned companies were “too efficient” and “lacked creativity and vision” in bidding for tenders against foreign firms. He mentioned independent Tripatra and Rekayasa Industri as potential acquisition targets for larger state firms like Wijaya Karya, which posted a Rp546 billion profit last year (a 56% increase) and is looking to win Rp25 trillion in new projects this year.

Sumaryanto said oil and energy companies, many of them state-owned also, would need to build capacity in the near future and should consider state-owned construction firms for major projects. Such ‘synergy’ would not violate existing laws on business competition, he said.

source & article: The Jakarta Globe