Indonesia is planning to invest US$360 billion (about 387 trillion won) in building SOC infrastructures such as highways and railways for the next five years, opening an opportunity for Korean builders to receive orders.
According to a report by the Jakarta branch of Korea International Trade Association, Indonesia's President Joko Widodo will invest about US$360 billion in infrastructure projects during his five-year presidency, under the name of ‘Jokonomics.’
President Jokowi, who is to run in the 2019 presidential election, is most likely to be re-elected as he has maintained a 70 percent approval rating until recently. The Indonesian government is building 15 airports and 172 sea ports, with investments of a total 385 trillion won (US$346 billion) in highways and railway networks, ports, airports and power plants by 2019 when the president’s term ends.
As POSCO, Hyundai E&C, Lotte E&C, and Nautilus Hyosung have succeeded in signing contracts in SOC sector in Indonesia, more companies are expected to have opportunities. Nautilus Hyosung is supplying various financial automation devices to BCA, the largest private bank in Indonesia. In August last year, the Korea Railroad Corporation received the final contract for construction of the railway system for the first stage of Jakarta Light Railway and won the second stage project.
Hanwha E&C won US$230 million worth order for the construction of 1.87 million public houses. Lotte E&C received a gas-fired combined cycle power plant. Hyundai E&C is participating in the construction of Cirebon II coal-fired power plant. POSCO Engineering signed an design, procurement, construction(EPC) contract for the construction of a hydroelectric power plant and POSCO operates an integrated steel mill (Krakatau POSCO) with an annual production capacity of 3 million tons.