Indonesia: Govt owes construction SOEs IDR5.6tr for land acquisition expenses

• Three state-owned construction companies, PT Waskita Karya, PT Hutama Karya and PT Wijaya Karya, are seeking repayments from the government for IDR5.6tr (USD390.9mn) in accumulated land acquisition expenses for infrastructure projects.
• A combination of mounting unpaid expenses by the government and the company’s dwindling income due to the COVID-19 pandemic has caused cash flow issues for the company, according to Destiawan.
• The LMAN previously stated it would continue to reimburse companies to help them endure the impacts of the drop off in toll road traffic. It has reimbursed IDR53.3tr to state-owned companies for land acquired for 77 strategic national projects, of which IDR11.88tr had gone to Waskita Karya, as of 24 Jun 20.
• The government also owes Hutama Karya IDR1.86tr for land acquisition costs that were paid upfront by the company for several projects dating back to 2016.
• Hutama Karya’s Budi Harto blamed the delays on the absence of a Finance Ministry decree (PMK) to regulate repayments to companies involved in completing the government’s National Strategic Projects (PSN).
• The government recently changed the payment verification scheme via Presidential Regulation No. 66/2020, which appointed the Finance Ministry to verify repayments, taking over from the Development Finance Comptroller (BPKP).

External Link : https://www.thejakartapost.com/news/2020/07/02/govt-owes-construction-soes-rp-5-6t-for-land-acquisition-expenses.html