Infrastructure Boosts Kalla’s Bukaka
PT Bukaka Teknik Utama (BUKK) Tbk, a company controlled by the family of Vice President Jusuf Kalla, booked net profit of Rp130.9 billion in the first half of 2017, ten times from its profit in the corresponding period last year (Rp13.8 billion), thanks to strong revenue stream from infrastructure projects in the country.
Salim Group & Start-Ups
Lily Chan, CEO of NUS Enterprise, and Axton Salim from Salim Group (son of Antoni Salim) are scheduled to launch BLOCK71 Jakarta this week. Mr Lim Hng Kiang, minister of industry and trade of Singapore, is expected to witness the signing of agreement between NUS Enterprise and Salim Group.
The Ugly Truth: Cinere-Jagorawi Toll Road Project
Section II of Cinere-Jagorawi (Cijago) toll road connecting Cisalak and Kukusan (6 KM) in Depok City, West Java was slated to start commercial operation in mid 2016. One year later, we still see no sign of completion of the construction. We paid a visit to the project, which is part of the so-called Jakarta Outer Ring Road-2 (JORR-2), to get better understanding about difficulties in infrastructure development in the country.
Trans-Sumatra Toll Road So Far
After years of delay, we finally see increasing activity in the development of Pekanbaru-Dumai toll road. For sure, the 131.5 KM toll road will not be completed before the end of Jokowi-Kalla administration in 2019. Overall construction progress has only reached 0.63% by July 14, 2017 because of slow pace of land acquisition.
Will Wuling Make a Difference?
Effort from some business groups, including the one controlled by Rini Soemarno, current minister of state-owned enterprises, to introduce Chinese motorcycle brands in Indonesia is widely considered a failure. Japanese brands like Honda, Yamaha, Suzuki, and Kawasaki continue to control the market. Indian brand TVS also failed despite first few years of success.
Project Financing Challenge: Greater Jakarta LRT
Light-rail transit (LRT) connecting Cibubur, Bekasi, and Grogol is one of strategic infrastructure projects of Jokowi-Kalla administration to ease traffic congestion in the Greater Jakarta area. By early last month, physical construction already reached 23%. But, financing for the whole project (Rp22 trillion) yet to be completed, placing President Jokowi under political pressures.
Infrastructure Journal No.27/2017
Long way to go for a stronger economic growth, but progress of infrastructure projects all over the country makes Indonesia a more attractive place for investments. Problems are here and there, but one should appreciate the development pace. In this edition, we update dam (water reservoir) projects, airports, toll roads, and railways.
Industrial Sugar Auction
Trade minister Enggartiasto Lukita has reportedly signed a decree about implementation of the controversial industrial sugar auction. Based on the decree signed recently, the auction will be effective October 1st, 2017.
Siloam Hospital vs Mitra Keluarga: Valuation Gap
Siloam Hospital (SILO), controlled by Lippo Group, has entered into agreements to acquire Hosana Medica hospital in Bekasi, West Java province for Rp150 billion. At the same time, Siloam also inaugurated commercial operation of Siloam Hospital Bogor in West Java. Still, shares of SILO ended lower by 1.9% to Rp10,400 on Friday (Jul 14), only slightly above its IPO price four years ago.
Modern Group & The Collapse of 7-Eleven (1)
What a mess! Modern International (MDRN), parent of the company operating 7-Eleven convenience stores in Indonesia, is now traded way below Rp50 (the lowest quotable price on IDX) following the closure of the retail business only eight years after Modern Group signed the master franchise agreement.