After having experience a decline in infrastructure development, especially in the field of industry production service and concrete and asphalt construction, in 2016 entrepreneurs expect the construction sector that support infrastructure will bounce back. After the decline that slowed 10 – 20 percent during the first half of this year, in the second half of this year the development of the construction sector will recover with growth of round 7 to 8 percent. This statement was made by General Secretary of the Indonesia Asphalt and Concrete Association (AABI), Benny Djutrisno, in Jakarta,
Djutrisno who told about his experience in participation in Bauma 2013, the construction and mining exhibition in Munich, Germany, said that until the next years, infrastructure sector in Indonesia will become an icon of development. Therefore, although in recent month the economic slowdown is also impacting the weakening power and development budget having not been absorbed optimally, his party believes that in October/November the arrangement of tender for some big projects will be started, whose realization started for the 2016 fiscal year.
“With the groundbreaking of some big projects which will start a few months ahead, it is expected that early 2016 will be a beginning of the movement of the one year, as the year of construction. It means that next year will no longer be a year of tender, but of construction work. We predict that in the next 5 to 5 years, the infrastructure sector will become an icon of Indonesia’s development. We also see the potential of the use of a number of raw materials that can be recycled, such as for cement and concrete, so that the ultimate impact it to increase raw material efficiency, he said.
The efficient use of raw materials makes the asphalt and concrete industry sector more environmentally friendly. We see that such recycling system has been available in Bauma, so that it is one of the reason we relearn a similar technology in similar exhibitions, one of which will be held in Germany in 2016. Raw materials that have been recycled can still be applied to the needs for the use of facilities that do not require major quality specifications, or lower level of needs, “said Djutrisno.
Admittedly there is still asphalt raw material that has to be imported, such as mixture of asphalt mixing plant, and most of the heavy equipment has to be imported plant, and most of the heavy equipment has to be imported. But gradually, the industry began to substitute the use of imported raw materials with local raw materials, such as the use of equipment imported separately, have started to be assembled domestically.
This step is an effort to minimize the impact of increasing depreciation of the rupiah against the US dollar. Moreover, the government has issued regulations that require the use of transactions that have been conducted in foreign currency denomination into the rupiah, in order reduce pressure on the Indonesian currency, he added.
Potential of Construction Market Value Continues to Increase
In the same occasion, the Secretary General of Construction Development of the Ministry of Public Works and Public Housing, Panani Kesai, suggests that the potential of construction marked value continued to rise, and this year it is predicted to reach IDR 1,000 trillion, this is in line with the need for investment in infrastructure sector for highway construction, railway, urban and marine transportation. Additionally, there are other needs, including the development of electricity sector, water resources, and public housing.
Meanwhile, based on data from Central statistics Agency (BPS) in 2013, the capacity of the national construction resources show that the number of construction workers in Indonesia reached 6.9 million workers. Of the construction workforce, according to data from the Institute for Constructions worker in Indonesia who are certified experts is 64,578 workers and 101,669 certified skilled workers.
Therefore, with the continued rise in construction market capitalization value in Indonesia, in line with infrastructure development plan that has been outlined, such as planned construction of new reservoirs and hydropower plant, construction of oil refineries; broadband range; low-cost rental apartment blocks (rusunawa) development; management of clean water and communal waste water system; and 1000-km highway construction plan of Jokowi, the government has set additional budget for infrastructure financing based on strategic issued in 2015.
There is also allocation of needs for construction purposes in the country, both for construction steel, asphalt and heavy equipment. The Government has set a policy for project construction work worth over IDR 200 billion, is required to have its own heavy equipment, or using a leasing system. Because if it does not have middle of the construction work, the project will stall, due to lack equipment whose lease has expired.
In the same occasion, deputy Managing Directors of VDMA for Economics and Statistic, who supervises the Trade Fair Markets Asia and Australia, Klaus Stockman, argued that mining potential in Indonesia is quite large. even it is estimated that every year Indonesia imported mining equipment worth USD 49 million. that is why the Indonesia business need to look at the potential of technological development in the utilization of mining equipment and heavy equipment in the exhibition which is planned to be held from April 11 to 17 in Munich, Germany. (E)
Business New - September 16, 2015