Nice…. State-owned holding has finally been decided. But, what about business competition? This is particularly happens in the toll road sector. By uniting Hutama Karya, WIKA, WSKT, ADHI, and JSMR, we are talking about assets worth 115,7 trillion IDR. The value is much bigger than in any other companies in Indonesia.
While looking at the mapping of highway construction companies in Indonesia, we see a wide distribution. The competition in this industry can be called almost perfect. None of the construction companies have the ability to determine the price. The auctioning system ensures that the lowest price is for the one who gets the project, although it will be added to other criteria. Small companies margins.
But by having SOE’s toll roads in Indonesia, we will see changes. The government can easily choose state-owned holding to work on a project. The bigger the project, the more it is possible that the state-owned holding will get it.
The question is: Is this suitable with the Competition Law? One article that can be tested is article 17 figure 2c. The article says: Entrepreneurs can be suspected or considered as controlling production and/or marketing or goods and/or services as referred to under Paragraph (1) of this article if: one entrepreneur or one group of entrepreneurs controls more than 50% (fifty percent) of the marketing share of one type of good or service.
It will not only shut down the other contractors. The lack of competition between SOEs may reduce the project quality and weaken the management competitiveness.
Of course we trust that the government will ensure that there is a balance between the competition and the achievement of national strategic plan which is going well. Therefore, we are waiting for a solution to this case.
Add Comment