{
  "id": 6250005,
  "title": "The Construction SOEs Merger Epidemic",
  "url": "https://urgent.news/2026/09/08/the-construction-soes-merger-epidemic",
  "topic": "business",
  "section": "Business",
  "published": "2026-09-08T07:20:25.000Z",
  "source": {
    "name": "Tempo.co English",
    "slug": "tempo-co-english",
    "url": "https://en.tempo.co/read/2119165/the-construction-soes-merger-epidemic"
  },
  "original_language": "en",
  "account": "State-owned enterprises (SOEs) in Indonesia face potential financial instability when merged together, akin to how ailing humans can spread illness to healthy individuals. President Prabowo Subianto's push to speed up SOE consolidation could trigger a financial epidemic. In August 2026, the Ministry of State-Owned Enterprises announced the closure of 290 unproductive companies, aiming to end at 300 by year-end. Amid this, Danantara, the SOEs superholding, will merge seven construction sector companies into three holdings over the next three months. However, not all of these companies are in good health. Adhi Karya has failed to pay a bond coupon, and restructuring Pembangunan Perumahan's bonds fell through due to investor approval issues, resulting in a downgrade of its debt rating. Only Hutama Karya appears relatively healthy, due to a full government guarantee.\n\nThe construction SOEs slated for consolidation carry unresolved old problems. Wijaya Karya faces annual losses from the Jakarta-Bandung high-speed railway, while Waskita Karya and Adhi Karya have rarely recorded profits due to large, unprofitable projects. With total debt of Rp180 trillion, the companies' assets don't cover their liabilities. Rather than forcing mergers to meet targets, Danantara and the government should tackle SOE issues individually and gradually. First, they must identify the root causes of each company's problems, separating burdens from government assignments, flawed business decisions, inefficiency, and corruption. Without these reforms, restructuring and mergers will fail.\n\nRestoring commercial discipline in construction SOEs is crucial. This involves prioritizing cash-flow recovery, divesting unprofitable assets, and focusing on profitable projects. The government must stop burdening SOEs with unprofitable projects, especially those assigned by those in power without proper business calculations. President Prabowo's command-style governance exacerbates the issue, accelerating the spread of chronic ailments among state companies and undermining their role in economic growth and development.",
  "summary": "Merging state-owned enterprises risks worsening the chaos in managing state companies. Sick companies could infect healthy ones.",
  "key_points": [],
  "editors_take": null,
  "illustration": null,
  "coverage": {
    "outlets": 1,
    "also_reported_by": []
  },
  "ai_generated": true,
  "disclaimer": "Summaries, key points and the editor’s take are written by software from other outlets’ reporting and may contain errors — always check the linked original."
}