2013-08-23 09:12:55 - New Construction market report from Business Monitor International: "Indonesia Infrastructure Report Q4 2013"
As expected, Q113 data on Indonesia's construction sector had supported our view that there is limited scope for construction growth in 2013 and 2014 to outperform its 2012 level. Furthermore, the downside risks we had previously highlighted - namely a deepening deficit (brought on by ballooning subsidies), rising inflation, bottlenecks in project execution and the 2014 presidential elections - are starting to manifest and could adversely affect near-term construction activity. As such, we have revise down our construction growth forecasts in 2013 and 2014, with growth reaching 7.4% in 2013 (previously 7.5%) and 6.9% (previously 7.4%) in 2014.
The key factors that will facilitate growth are:
Full Report Details at
- www.fastmr.com/prod/670567_indonesia_infrastructure_report_q4_20 ..
* In May 2013, MRT Jakarta, the city-owned corporate
entity in charge of developing Jakarta's first mass rapid transit (MRT) project, awarded two underground construction packages to a consortium consisting of Japanese companies Shimizu, Obayashi and Indonesian companies Wijaya Karya and Jaya Konstruksi. MRT Jakarta also awarded another underground package to a consortium consisting of Japanese company Sumitomo Mitsu and Indonesian company Hutama Karya.
* In May 2013, a senior official in the Indonesian government announced that the land acquisition deadline for the coal-fired power plant in Batang, Central Java would be delayed till October 2013. Construction on the project was supposed to have commenced in October 2012, but has yet to start due to land acquisition issues. The 2,000MW plant is the first and largest public-private partnership (PPP) project awarded by Indonesia so far, with a price tag of nearly US$4bn - the other seven PPP projects awarded so far have been toll roads. The project had been awarded in October 2011 to Bhimasena Power Indonesia - a consortium comprising of Japan's J-Power and Itochu, as well as Indonesia's Adaro Power - and commercial operations were originally planned for 2017.
* In May 2013, Chinese state-owned utility firm China Power Investment (CPI) unveiled a plan to invest US$17bn to develop 7,000MW of hydropower projects in the North Kalimantan region of Indonesia. The project will be constructed in stages along the Kayan River, and CPI said that it hopes to commence construction in 2014. The project is expected to take seven years to be completed, and CPI has already received preliminary approval from Indonesian Energy and Mineral Resources Minister Jero Wacik.
* In July 2013, Indian conglomerate Adani Group had abandoned a US$1.7bn coal railway project with Indonesia's state-owned coal miner Bukit Asam in South Sumatra due to tough restrictions imposed by Indonesia on licensing, according to Bukit Assam CEO Milawarma. Meanwhile, the company is still in talks with Indonesia's Rajawali Group to start another US$2bn South Sumatra coal railway project delayed due to licensing and validation issues. The projects delay has affected the expansion plans of the state-owned coal miner, which is expected to produce 17mn tonnes of coal in 2013. The company's projects are also exposed to other risks, such as weak coal prices and expectations that China will reduce the import of low-calorie coal, Milawarma added.
* In July 2013, the government of Indonesia revealed plans to offer two public-private partnership (PPP) projects in the province of Central Kalimantan. The projects involve the construction of a railway line Puruk Cahu-Batanjung worth IDR40trn (US$3.99bn) and a steel plant project worth IDR20trn (US$2bn). The Puruk Cahu-Batanjung rail project would continue to transport natural resources, while it will be developed for passenger trains for the future. The steel project is expected to be offered in early 2014. Four countries, including China and India, are reportedly interested in the project.
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