Accident-prone Indonesian contractor replaces president

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An Indonesian state-owned construction company linked to eight accidents since August 2016 has replaced its president, as national leader Joko Widodo fights to develop quality infrastructure for the country.

Waskita Karya decided at a general shareholders meeting on Friday to replace M. Choliq, an industry veteran who has been at the helm since 2008, with I. Gusti Ngurah Putra, the president of fellow state-owned contractor Hutama Karya.

Improving Indonesia’s infrastructure was a key part of Widodo’s presidential campaign in 2014, but he faces headwinds from 16 accidents industrywide in less than two years as well as delays in the construction of a high-speed railway between Jakarta and Bandung.

On Feb. 20, an early morning collapse at a construction site for a toll road injured seven workers, triggering a public outcry and prompting the government to declare a temporary halt on building elevated roads and rail lines the same day.

With Widodo’s re-election bid looming next year, Jokowi, as he is affectionately known, had to act swiftly to replace Waskita Karya’s president.

Putra worked for Waskita from 1984 to 2011. Ahmad Bambang, deputy state-owned enterprise minister for construction and transportation facilities, said the ministry specifically selected a former member of Waskita to boost employee morale. “By choosing Waskita people who have done great outside, calling them back [lifts morale],” he said after the shareholders meeting.

Waskita, established in 1961, was responsible for major projects such as Soekarno-Hatta International Airport in the 1980s and the central bank headquarters in the 1990s.

The Jakarta-listed contractor has been one of the biggest beneficiaries of Widodo’s infrastructure program. Orders surged after Jokowi took office in 2014, and the company emerged as the top state contractor by market capitalization. Waskita’s net profit for 2017 surged 126% to 3.8 trillion rupiah ($276 million).

But the growth in orders from infrastructure projects proved too much for the state-owned company.

“Why [were there so] many [accidents] over the past eight months? Because there is a lot of production,” Choliq said at a news conference the same day.

“I give you an example. In 2017, Waskita had to install 11,000 girders — many of the accidents happened when girders fell while being lifted. Compare that with other contractors, probably less than 100.”

“We had a lot more projects compared with others,” Choliq continued. “Our revenue last year was 45 trillion [rupiah]. The others had less than 20 trillion.”

Waskita Karya’s shares ended the day down 1.5% at 2,550 rupiah.

Nikkei staff writer Erwida Maulia in Jakarta contributed to this article. 

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