ASEAN KEY DESTINATIONS
Construction firm PP eyes Rp 21t power plant projects
State-run construction firm Pembangunan Perumahan (PP) has its sights set on the construction of power plants in Sumatra and West Kalimantan to support the government’s massive power plant development objectives.
In its initial plan, the company will focus on power plant construction projects in Aceh, Riau and West Kalimantan valued at Rp 9 trillion.
Lukman Hidayat, the company’s director for business development, research and technology, said the power plants in the three provinces would have a capacity of 200 megawatts (MW) apiece.
PP also plans to carry out a joint venture with another state company for the construction of a 800 MW power plant, which Lukman said would be located somewhere in Sumatra.
He declined to disclose the name of the company’s partner, saying PP was still working on the tender for the Rp 12 trillion project.
According to Lukman, PP will own around 20 to 45 percent of shares on the power plants, requiring an investment of between Rp 4.2 trillion and Rp 9.45 trillion.
“We are currently in the process of securing the tender for the joint venture,” Lukman said.
Lukman said the power plant projects were part of the company’s support of the government’s plan to develop power plants with a total capacity of 35,000 MW.
Previously, President Joko “Jokowi” Widodo said his administration aimed to add 35,000 MW of power to the electricity grid over five years, with private companies or independent power producers (IPP) expected to contribute 25,000 MW.
Thus, the government is currently working to entice more participation from the private sector.
The 2019 power-generation goals are one of the Jokowi administration’s priority programs for boosting economic growth.
PP, aiming to book Rp 15.12 trillion in new contracts within the first half of 2015, reported it had pocketed Rp 8.9 trillion in contracts from January to May.
The firm hopes to finalize contracts valued at Rp 27.5 trillion in 2015, up 30 percent from year-on-year (yoy) growth of 20.24 trillion.
The new contracts relate to projects located in Makassar, South Sulawesi; Medan, North Sumatra; Jakarta; Surabaya, East Java; Banten; Semarang, East Java; Bintan, Riau Islands; and Timor Leste.
This year, PP seeks to grow revenue by 52.97 percent, to Rp 19 trillion, from 2014 levels. Meanwhile, it hopes to book Rp 730 billion in net profit.
Last month, the construction firm gave authority to its subsidiary, PP Properti, to offer new shares in an initial public offering (IPO) in an attempt to raise funds for its business expansion.
The property firm, which is listed under the code PPRO, sold 4.91 million shares, or 35 percent of its enlarged capital, to the public on May 11 to 13, raising around Rp 883 billion in funds.
The company, which was split from Pembangunan Perumahan in 2013, appointed Bahana Securities, CIMB Securities Indonesia,
CLSA Indonesia, Danareksa Sekuritas, and Mandiri Sekuritas as underwriters.
This year, PP Properti is working on developing a number of property projects in Java, two of which are residential projects; namely Grand Sungkono Lagoon in Surabaya and Grand Kamala Lagoon in Bekasi.
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