State-run construction firm Wijaya Karya (Wika) is looking to double its overseas contracts to about Rp 4 trillion (US$314 million) this year from Rp 1.8 trillion with the recent signing of new contracts in Malaysia and the Middle East.
Wika corporate secretary Suradi said the new overseas projects would include a superblock in Kuching, Malaysia, a hotel in Riyadh and a six-floor residential building in Makkah, both in Saudi Arabia, as well as an airport in Timor Leste.
Each of the projects will be worth around Rp 1 trillion.
The company has been involved in construction work for years in several Middle East countries, Timor Leste and Myanmar.
In Myanmar, Wika won a $125 million contract for the development of a commercial tower, a move essential for supporting its overseas expansion.
Wika and its partner, Singapore-based high-end developer Noble Twin Dragons Pte. Ltd., signed an agreement in September last year to build the mixed-use Pyay Tower and Residences in Yangon.
Wika president director Bintang Perbowo said the company was requesting a capital injection from the government this year to support the company’s growing construction work.
He said Thursday that the company had formally asked for Rp 7.2 trillion ($575.05 million) as a capital injection from the government to finance its large power plant projects, which would cost a total of about $1.56 billion to build.
With or without the capital injection, Bintang said that the company would carry on with its three power plant projects, which are expected to start distributing power by 2018 with a total capacity of 5,200 megawatts (MW), as the company planned to look for funding sources elsewhere.
He said that about Rp 4.6 trillion of the requested funds would be used for this year’s business activities and the other 2.6 trillion for next year’s, mainly to support its independent power producer (IPP) projects.
The requested capital is expected to be part of the government’s commitment to stimulate state-run companies. The government has budgeted Rp 48 trillion for capital injections for 35 companies — excluding Wika, but including fellow listed builders Waskita Karya and Adhi Karya. Companies receiving the stimulus will have to carry out rights issues to secure the capital.
Talks for the planned capital injection are currently being held at the House of Representatives.
The capital, according to him, will be used to finance Wika’s planned three power plant projects, each in which the company hopes to hold a 15-percent stakes.
The three IPP projects, Bintang said were a 2×600 MW plant in South Sumatra, the 2×1000 MW Jawa-5 power plant in Serang, Banten, and another 2×1000 MW plant, also in Banten.
The projects, he said, were meant to support the government’s commitment to develop additional electricity, up to 35,000 MW within the next five years, of which 20,000 MW would be provided by IPPs.
He said that each megawatt from the three power plants — all will be fueled by coal — would cost the company about $1.5 million to $2 million, meaning that the company will be required to disburse around $1.17 billion to $1.56 billion in total.
Bintang said that even if the company’s stimulus request was turned down, the company would carry on with the projects, which are expected to commence this year and conclude in three years, as they were expected to return income to the company.
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