Boss Hutama Karya Reveals the Culprit of BUMN Karya ‘Bloody’

Jakarta, CNN Indonesia –

President Director of PT Hutama Karya (Persero) Budi Harto revealed the causes of financial problems BUMN creation. According to him, there are six things that affect finances BUMN Karya.

“I would like to convey some weak points why BUMN Karya is currently experiencing several problems, especially in finance,” he said in a Webinar on Measuring Infrastructure, Friday (16/4).

First, business competition. As a construction service provider for the government, BUMN works are required by law to go through a fairly tight competition selection. It is this competition, said Budi, that creates risks for this state-owned company.

The reason is, the impact of this competition is that BUMN works cannot get good quality prices.

“Broadly speaking, the actual quality of the good price is only about 90 percent of the HPS (Self-Estimated Price) compiled by the project owner or service provider. However, according to some facts and data, many of the tender results are below 80. percent, so this will result in a large risk of loss, “he explained.

Second, businesses that are highly vulnerable and at risk of economic change. According to Budi, any changes in the economic sector will have an impact on this construction service business.

For example, the increase in fuel prices could affect SOE contracts because their contracts are generally long-term, around 3-4 years. Meanwhile, in the contract, BUMN Karya has set a number of assumptions that may change in its course.

“Besides the business is vulnerable to changes in the economic environment, it must also process with competition, so that these two factors will encourage us to face big risks,” he added.

Third, technology. He said BUMN Karya was required to develop mastery of technology, so that it carried out trials in several projects that were followed. Unfortunately, Budi said that some construction service actors, especially state-owned enterprises, sometimes take projects whose technology is not fully mastered, resulting in greater losses.

Fourth, financial. He said that BUMN Karya made investments in fields that were still not financially viable. As a result, the company was forced to use loan funds, aka debt, to finance the project.

Fifth, the majority of BUMN are engaged in the property business. In fact, as it is known, the trend in the property business often fluctuates, giving rise to quite a risk.

“This is indeed something that is unhealthy, it is better if not all go into the same business, for example, everything goes into property, then everything goes to precast concrete,” he said.

Meanwhile, the property business demands the availability of large amounts of land. Therefore, BUMN Karya was forced to provide the land using funds sourced from debt.

“Therefore, it will result in annual interest, so that it will be capitalized in the property price, so that the resulting property will have a high HPP (Cost of Production). This HPP will be far above people’s purchasing power,” he explained.

Lastly, the influence of foreign markets. Budi said that foreign markets have legal and cultural differences, so that Karya BUMN must be careful about entering these markets. This is because construction projects have a character that is always changing, so that sometimes it causes disputes between service providers and service users, in which the service provider is often at a disadvantage.

“These are the causes that we can identify why our current condition is not doing well which is largely due to these factors,” he said.

Debt Lowering Strategy

On that occasion, he revealed that Hutama Karya already had a strategy to reduce the company’s debt. He said Hutama Karya would divest or sell toll roads that were already operating to investors. Furthermore, the proceeds from the sale or divestment of the segment will be used to reduce debt.

“We will do recycle, so we will offer several sections that are already operating which are quite good, such as Medan-Binjai, Bakauheni-Palembang, and Pekanbaru-Dumai.

On the same occasion, Deputy Managing Director Hutama Karya Aloysius Kiik Ro revealed that BUMN Karya had developed a number of strategies to reduce their financial burden. One of them is establishing a project management office (PMO) for BUMN Karya which is escorted by the Ministry of BUMN.

SOEs involved in the PMO include PT PP (Persero), PT Brantas Abipraya (Persero), PT Waskita Karya (Persero), PT Wijaya Karya (Persero), and PT Adhi Karya (Persero).

“We agreed to form this to make corrective steps. This is not just recently, actually it has been formed since March 2020 that we have started work,” he said.

From this PMO, he continued, BUMN Karya would rearrange the specialties owned by BUMN Karya companies. Furthermore, each company will focus on increasing competence in their respective fields.

“It is impossible for us to be winners in the region without us building specializations. So, then the six of us agreed, for example, who would be a tunnel expert, a bridge expert, a water expert, and so on, that was a super specialist,” he said.

[Gambas:Video CNN]

(ulf / age)

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