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A group of state-owned construction firms is seeking support
from the House of Representatives for a capital injection from the
government.
The companies -- PT Adhi Karya, PT Waskita Karya, PT Pembangunan
Perumahan (PP), PT Hutama Karya, PT Nindya Karya, PT Amarta Karya, PT
Brantas Abipraya and PT Istaka Karya -- said Wednesday during a hearing
they needed some Rp 3 trillion (about US$319.45 million) for the
development of infrastructure projects this year.
"It is in line with the government's focus in 2008 to speed up the
development of infrastructure projects. If we get the capital
injection, we can work two or three times faster," the companies'
representative, Musyarif, told the hearing.
The eight companies have total assets of about Rp 2.45 trillion. Adhi
Karya, the only company that has gone public, has total assets of Rp
1.286 trillion.
In addition to infrastructure development, Musyarif said the capital
injection would be used to fund preventive measures for possible
natural disasters, and to increase the companies' assets before they
conducted initial public offerings.
"In return, the state will benefit as the companies can provide more
revenue in the form of taxes and dividends, as well as providing
employment and supporting related industries," he said.
The companies project that they can employ about 400,000 workers a day
if they are given the capital injection, compared to 180,000 a day
currently.
Habil Marati, a member of the House's Commission XI, said before
providing a cash injection, the government should determine the
financial soundness of the companies.
"I suggest the Supreme Audit Agency audit the companies so the House
will know whether they have the capacity to compete in developing
infrastructure projects in the country," he told The Jakarta Post.
Habil also said publicly listed Adhi Karya should look to raise funds
from the stock market, rather than requesting government help.
Adhi Karya has said it plans to launch a Rp 600 billion rights issue,
and would bring the proposal to the House later this year.
Hafiz Zamawi, another House member, said the companies could look for
funds from the banking sector, as the country's banks were currently
"very liquid".
However, many banks are reluctant to finance infrastructure projects,
which are considered high risk and take a long time to complete.
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