Govt Owes Construction Soes Rp5.6t for Land Acquisition Expenses

Govt owes construction SOEs Rp5.6t 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 Rp5.6 trillion (US$390.9 million) in accumulated land acquisition expenses for infrastructure projects.

Waskita Karya president director Destiawan Soewardjono said on Wednesday that the government still owed the company Rp3.71 trillion for land acquired for its ongoing toll road projects, including the Pemalang-Batang toll road in Central Java, the Bekasi-Cawang-Kampung Melayu told road in Greater Jakarta and the Cimanggis-Cibitung toll road in West Java.

Land Acquisition Expenses

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.

“Our cash situation is currently in the red. However, we’re increasing our efforts to improve the situation by collecting unpaid reimbursements,” he said during a presentation at the House of Representatives, adding that the company had suffered from a 50 percent decline in toll road traffic.

He urged the Finance Ministry’s State Asset Management Agency (LMAN) to make the repayments, as the company’s data showed it was eligible to receive Rp1.35 trillion from the agency as of Wednesday.

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 Rp53.3 trillion to state-owned companies for land acquired for 77 strategic national projects, of which Rp11.88 trillion had gone to Waskita Karya, as of June 24.

Destiawan said Waskita Karya planned to asked the State-Owned Enterprises (SOE) Ministry for additional funds.

The government also owes Hutama Karya Rp1.86 trillion for land acquisition costs that were paid upfront by the company for several projects dating back to 2016.

“The debts have been accumulating since 2016,” Hutama Karya president director Budi Harto said during the hearing.

Hutama Karya is in charge of several sections of the trans-Sumatra toll road, including Medan-Binjai, Bakauheni-Terbanggi Besar and Pekanbaru-Dumai.

According to Hutama Karya, the company was owed Rp494 billion from last year and Rp369 billion from this year, on the top of outstanding repayments from 2016 to 2018.

“[The debts] are yet to be paid even though the land has been acquired and the project is underway,” Budi added.

Hutama Karya’s Budi 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).

“The Finance Ministry isn’t ready to verify our claims,” Budi complained.

Meanwhile, Wijaya Karya claims it is entitled to Rp 59.9 billion in outstanding repayments from the government for land acquired for the Serang-Panimban toll road project.

“As of June, the government has paid Rp1.27 trillion for the land acquisition costs for the Serang-Panimban toll road project. However, it’s still Rp 59 billion short,” the company’s president director Agung Budi Waskito said.

The construction firms are the latest SOEs seeking debt repayments from the government, despite recent reimbursements from the LMAN.

State-owned oil and gas giant Pertamina also reported on Monday to lawmakers that the government had yet to pay Rp96.5 trillion in compensation for fuel subsidies between 2017 and 2019. Govt owes construction SOEs Rp5.6t for land acquisition expenses (Mardika Parama, The Jakarta Post)