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Indonesia parliament approves US$7.7 billion capital injection to state firms

Indonesia parliament approves US$7.7 billion capital injection to state firms

FILE PHOTO: An aerial view shows the construction site of a new section Mass Rapid Transportation (MRT) in Jakarta, Indonesia, July 9, 2017. Antara Foto/Rosa Panggabean via REUTERS

JAKARTA: Indonesia's parliament approved on Wednesday a 110.52 trillion rupiah (US$7.71 billion) injection into 11 state-owned enterprises and investment agencies as additional capital for this year and for 2022.

The approvals include 6.9 trillion rupiah for state railway operator PT Kereta Api Indonesia (KAI) to help finance the China-backed high-speed rail project.

Indonesia will raise its stake in the 142km rail project, which connects the capital Jakarta with Bandung, through KAI with 4.3 trillion rupiah of capital, out of the 6.9 trillion rupiah allocated for the company.

Chief executive of Indonesian builder Wijaya Karya, which controls 60 per cent of the project, in April said a cost increase of 20 per cent was expected in order to complete construction, and partners were asked to raise their stake.

China Railway Engineering Corporation and other Chinese companies control the other stakes.

Among other approvals by lawmakers on Wednesday was 5 trillion rupiah for state electricity firm PT Perusahaan Listrik Negara in 2022 to support its expansion, as well as capital injections for construction companies Waskita Karya and Adhi Karya to finance various infrastructure projects.

Source: Reuters

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