Why did President Prabowo revoke the funding for Waskita Karya?

President Prabowo Subianto has expressed a preference for private sector involvement in infrastructure projects, believing they are often more efficient and cost-effective than state-owned enterprises. The revocation aligns with this philosophy.

Where will the revoked funding now be directed?

The funds have been reallocated to PT Hutama Karya (Persero) to facilitate the acquisition of assets from Waskita Karya as part of a restructuring effort.

What are National Strategic Projects (PSN)?

National Strategic Projects (PSN) are infrastructure projects deemed crucial for Indonesia's economic development and are given priority status by the government.

What is Waskita Karya's role in Indonesian infrastructure?

Waskita Karya is a state-owned construction company that has been heavily involved in numerous infrastructure projects across Indonesia, including toll roads, bridges, and other public works.

How might this decision impact future infrastructure development in Indonesia?

The revocation of funding suggests a potential shift towards greater private sector involvement in Indonesian infrastructure,which could lead to new opportunities for private companies but also raises questions about the role of state-owned enterprises.

Jakarta – PT Adhi Karya (persero) Tbk (ADHI) is seeking private sector funding to advance construction of the Phase II Light Rail‌ Transit (LRT) project connecting Cibubur and Bogor. This move follows the triumphant completion and operation of the Jabodebek Phase I LRT, currently serving‌ routes between Cawang-Cibubur, Cawang-Dukuh atas, and East Cawang-Bekasi.

According to Adhi Karya President Director Entus asnawi,discussions are underway with the Directorate General of Railways‍ at the Ministry ⁢of Transportation (Kemenhub) and ⁢PT Kereta Api Indonesia (KAI) to secure the‍ necessary capital. The Jabodebek Phase II LRT project is authorized under Presidential Regulation (Perpres) Number 98 of 2015.”As this is a ‍Perpres,‍ we have also discussed with the Director General of Railways. We are jointly looking for funding ‌solutions for the construction of the second phase, involving funds outside ⁤the government to work ⁢together with KAI,” ⁣Entus stated during a virtual public expose on⁢ Monday (September 8, 2025).

Adhi Karya was assigned the construction of ‌the Jabodebek LRT in two phases through‌ the aforementioned Perpres. Currently, 44 km of the LRT ‍is operational, representing a project value of Rp 25.5 trillion. However, the company has only received Rp 23.3 trillion in state Capital ‍Participation (PMN) ‌for Phase I, leaving a Rp 2.2 trillion balance owed by the government.

“The first stage of ‌44 kilometers that we have built ‌and operate at this time is Rp 23.3 trillion. But at that time there was still a lack of funds,” entus explained.

Adhi Karya Finance Director Bani Iqbal anticipates resolving the outstanding government receivables related‍ to the Jabodebek LRT project by the end⁣ of the year,acknowledging that these receivables constitute the company’s‌ largest outstanding balance.”The biggest receivables at this time are from the LRT, which is still in the process of discussion with KAI, Ministry of Finance,⁣ and also and ‌between them for its completion. the target can be completed as soon as possible later this year,” Bani said.

Prabowo Subianto Rescinds $197 Million Waskita Karya Funding

Q: How much funding was revoked from Waskita Karya?

The revoked National Capital Participation (PMN) amounted to IDR 3 trillion, which is approximately $197 million USD.

Table of Contents

Prabowo Subianto Rescinds $197 Million Waskita Karya Funding

Jakarta, Indonesia – President prabowo Subianto has revoked a planned IDR 3 trillion (approximately $197 million USD) National Capital Participation (PMN) for PT Waskita Karya (Persero) Tbk, a state-owned construction company. the decision, formalized in Government Regulation (PP) Number 20 of 2025, effectively reverses a prior commitment made to bolster Waskita Karya’s capital structure.

The regulation, signed into law on May 6, 2025, rescinds Government Regulation Number 34 of 2022, which initially authorized the capital injection.This move signals a potential shift in the Indonesian government’s approach to infrastructure development, favoring private sector involvement over direct state funding for certain projects.

Background of the Revoked Funding

The now-canceled IDR 3 trillion PMN was originally allocated by former President Joko Widodo (Jokowi) with the intention of strengthening Waskita Karya’s financial position and enhancing its capacity to complete National Strategic Projects (PSN), notably in the toll road sector.The funds were to be drawn from the 2022 state Budget (APBN). Though,the plan was ultimately scrapped,and the funds were slated to be returned to the state treasury.

Did You Know? Waskita Karya was heavily involved in the construction of several sections of the Trans-Java toll road, a major infrastructure project aimed at improving connectivity across the island of Java.

Waskita Karya’s Viewpoint

In 2023, Waskita karya’s President Director, Mursyid, disclosed that the Privatization committee had approved the return of the 2022 PMN funds to the State General Cash Account.This decision effectively halted the company’s planned rights issue and privatization process, according to information released to the Indonesia Stock Exchange (BEI).

Shift to Hutama Karya

Following the decision to retract the PMN from Waskita Karya, State-owned Enterprises (BUMN) Minister Erick Thohir redirected the funds to PT Hutama Karya (Persero). The intended purpose of this reallocation was to enable Hutama Karya to acquire assets from Waskita Karya as part of a broader restructuring effort.

Prabowo’s Stance on State Capital Participation

President Prabowo Subianto has expressed reservations about the effectiveness of state capital participation, particularly in the construction sector. He voiced his concerns at the International Conference on Infrastructure (ICI) 2025 in Jakarta, emphasizing his belief that the private sector is frequently enough more efficient and capable in handling infrastructure projects.

“I believe in the strong role of the state for intervention overcoming poverty, hunger, improved education… but I also know that in certain fields, especially physical development construction, the private sector is often more modern, efficient, and on time by saving a large budget,” Prabowo stated at the conference The Jakarta Post reported.

Prabowo criticized the perceived inefficiencies of state-owned enterprises, suggesting that they sometimes operate without a strong sense of urgency due to the expectation of continued financial support from the government.

Pro Tip: monitoring government regulations and policy shifts is crucial for understanding the future direction of infrastructure development in Indonesia.

Potential Implications

The revocation of funding for Waskita Karya and President Prabowo’s statements suggest a potential shift towards greater private sector involvement in Indonesian infrastructure projects. this could lead to increased opportunities for private companies, both domestic and international, to participate in the country’s ongoing development initiatives. However, it also raises questions about the future role of state-owned enterprises in the sector.

What impact will this decision have on ongoing infrastructure projects? How will it affect the competitive landscape within the construction industry?

Key Figures
Entity	Funding (IDR)	Funding (USD)	Status
Waskita Karya (Originally)	3 Trillion	$197 Million	Revoked
Hutama Karya (Currently)	3 Trillion	$197 Million	Reallocated

Evergreen Insights: The Evolving Landscape of Indonesian Infrastructure

Indonesia’s infrastructure development has been a key focus of successive administrations, recognizing its importance for economic growth and connectivity. The country has historically relied on a mix of state funding and private investment to finance these projects. However, the balance between these two approaches has shifted over time, influenced by factors such as government priorities, economic conditions, and the perceived efficiency of different models.

The current administration’s emphasis on private sector involvement reflects a broader trend towards greater fiscal responsibility and a desire to leverage the expertise and resources of private companies. This approach is not without its challenges, as it requires a robust regulatory framework, clear procurement processes, and effective risk management strategies to ensure that projects are delivered on time and within budget. According to a 2024 report by the World Bank,Indonesia needs to improve its regulatory environment to attract more private investment in infrastructure World Bank.

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