"It would be much more ideal if, in the future, infrastructure project development is carried out by private institutions so as to (simplify) the bureaucracy and minimize the risk of moral hazard," he said, according to a written statement received here on Thursday.
Soesatyo delivered the remarks during a meeting with a group of creditors that Istaka Karya still owes money to. The members of the group who attended the meeting included Andy Simanjuntak, Wanto Suriyanto, Bambang Susilo, M. Yudan, and Zoliman.
During the meeting, the group informed that the state-owned company still owes them Rp 1.1 trillion (US$73 million).
The debt accumulated from the Soekarno Hatta International Airport's Sedyatmo toll road project, with payments not cleared since 2011, as well as the Bawean-Semarang toll road project.
On July 12, 2022, the Jakarta State Court declared the company bankrupt, following which, the state disbanded the company through Government Regulation Number 13 of 2023.
Soesatyo informed that Istaka Karya still owes a considerable sum to its partners and is yet to clear it.
This has led to business players ceasing operations of their enterprises and their assets —houses, plot, heavy equipment, and buildings — are at risk of being seized by the bank.
"Some even died while fighting for their rights from Istaka Karya due to stress," he said.
The Istaka Karya case must serve as a lesson for the government in the management of state-owned enterprises, he added.
He said he believes that by involving private entities, such incidents would not be repeated.
Moreover, in a meeting in July 2016, President Joko Widodo highlighted private entities' contribution to infrastructure projects that are necessary for national development, he noted.
They can contribute as project investors as well, apart from being contractors, Soesatyo said.
Private entities' involvement is important given that the state budget cannot fully fund infrastructure development, he added.
As the Finance Ministry has informed, the total budget needed for infrastructure development under the medium-term national development plan is Rp6,445 trillion (US$427 billion), he added.
He said that for the time being, the state and regional budgets can only funnel Rp2,385 trillion (US$158 billion), while state and region-owned companies can contribute Rp1,353 trillion (US$90 billion); thus, state entities are expected to fulfill the remaining budgetary requirements.
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Translator: Gilang Galiartha, Mecca Yumna
Editor: Sri Haryati
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