Sunday, 23 March 2014


The percentage of Indonesian Migrant Workers [TKI] in the construction sector in various infra structure projects abroad, especially skilled workers and experts kept increasing. The proportion of skilled and unskilled labor was 40 : 60. Although skilled labor was still below 50%, the number tend to increase year after year. “The ratio of expert: skilled labor: unskilled labor was 10:30:60 which was the structure of project employment in General. “Head of the Development Center, Investment Resources [PPS-DI] Ministry of Public Works [PU] Mochammad Natsir stated to Business News [4/3].

The Ministry of Public Works [PU] felt the need for development nurturing skilled labor toward AEC next year, so the Ministry of PU would also promote investment resources. The construction sector for infra structure projects involved many institutions in the Ministry. PPSDI encompassed development of institutional business, organizing, investment resources which ran supply chain, investment platform, market, and competitiveness. “We now even operate competence building sector and construction training with Malaysia. We have jut signed MoU last January,” Moh. Natsir said.

The Ministry of PU was optimistic about TKI competence toward AEC 2015. The optimism was not an exaggeration, considering the role of Indonesian contractor companies in Asean. Besides the national private companies and BUMN kept expanding and undertake various construction tasks. “We are doing well in Asean, the Middle East. We undertake many projects there. Our handicap is one: company and capital access. Our construction cost is relatively more expensive compared to that of Asean countries”

The Government had set up the Indonesian Export Financing Body [LPEI] and Exim Bank. The credit interest had been downsized to one digit but still more expensive compared to other countries. LPEI could facilitate credit for national or foreign contractors. For foreign investors, the prerequitment was the project undertaken must use local resources. If the project undertaken by foreign products was dedicated to Indonesia credit could be extended by Exim Bank or LPEI. Project which were export oriented could also have access to LPEI and Exim Bank.

Some Indonesian contractors’ offering were uncompetitive in terms of price. But in terms of Human Resources, skilled or unskilled, Indonesia was better. Indonesian contractors were able to finish construction projects faster than foreign contractors, while the quality of end result was also good. “We can finish one floor of building construction in one day, so we are getting more reputable in Dubai, Algeria, and Saudi Arabia because our personnel are competitive.”

Over the past 10-15 years Indonesian contractors had been winning projects in the Middle East. Wika Waskita contractor company was undertaking 2 huge projects in Saudi Arabia. i.e. Financial Center and King Saudi University in Ryadh. The number of workers employed in each project could be between 200 – 300 workers; they were skilled labor and expert staff. “All are skilled for all level of tasks, non are unskilled. But it has nothing to do with the Zero Housemaid plan by the Ministry of manpower. We are focusing on development of investment resources and construction.”

Indonesian contractors once had to undertake the tower construction project before the Burj Khalifa Dubai. Besides also the Monorail project in Algeria carried out by WIKA. Wika’s success was also in tandem with operations of asphalt and concrete in this oil rich state. So far TKI employment had been concentrated in Algeria. Some years ago during high season, the number of TKI employed came to 1,400 workers. “We are optimistic. But in countries like Iraq we are still waiting for the right moment. Many potential project were unexplored. We observe the security factor as war and terror are not totally gone”

Meanwhile the 41st IFAWPCA (International Federation of Asian and Western Pacific Contractors) Sudarto saw the need of meeting demand for infra structure building. Infra structure growth did not only affect economic growth but also social life. Various models of financing had been exercised to promote infra structure building. Investment could be done by state owned companies or regional companies and also the private sector. One of the platforms adopted was joint operation for infra structure asset. The payment scheme would be carried out by private investors in collaboration with operators. “This could be applicable through long term agreement or other models of public private partnership” Sudarto disclosed to Business News [3/3]. (SS)

Business New - March 7, 2014  

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