Local contractors face bleak future<\/p>\n
JAKARTA (JP): Contractors in the country face a gloomy
\noutlook, as the lack of growth in the property sector could leave
\nmany businesses idle for at least the next two years, the
\nIndonesian Association of Contractors has said.<\/p>\n
The association's chairman, Fatur Rochman, said in a House of
\nRepresentatives hearing yesterday that the delay of projects due
\nto the government's cutback program and a lack of funding would
\ncause a 30 percent drop in construction next year.<\/p>\n
\"This year we've had to endure substantial losses due to the
\ncurrency crisis, next year we'll suffer unemployment,\" Fatur told
\nHouse Commission IV for public works.<\/p>\n
This would trigger the fall of many contractors, especially
\nsmall and medium-scale ones, as many of them would not be able to
\nmaintain their businesses any more, he said.<\/p>\n
Small and medium contractors only made marginal profits of
\nbetween 0.5 percent and 1 percent, he said.<\/p>\n
The currency crisis, which has caused the rupiah to drop by
\nover 35 percent against the U.S. dollar since July, has cost many
\ncontractors their savings from profits they have saved over the
\nyears.<\/p>\n
\"The money they accumulate in eight to 10 years is gone within
\nthree months,\" Fatur said.<\/p>\n
He said many developers of private and government-related
\nprojects had delayed paying their contractors because of project
\ndelays.<\/p>\n
At the same time, capital costs and material prices had shot
\nup, while materials must be paid in cash, he said.<\/p>\n
The tight money policy imposed by the government in August had
\ncaused interest rates to soar and further burdened contractors,
\nhe said.<\/p>\n
Contractors would not be able to keep their businesses if the
\ncondition persists, he said. Many had begun to let go of their
\nworkers.<\/p>\n
He said about two million workers in construction-related
\nsectors had lost their jobs.<\/p>\n
Fatur said the cost of contractor services must be adjusted.
\nAnother alternative was to optimize jobs on projects with limited
\nfunding, meaning contractors could be paid the same amount but
\nwith less work.<\/p>\n
He also appealed to the government to allow contractors to
\ndelay the payment of their income taxes until next year.<\/p>\n
The head of the Indonesian Builders Association (Gapensi),
\nAgus Kartasasmita, predicted yesterday that next year's growth in
\nthe construction sector would be lower than the annual average of
\n12 percent.<\/p>\n
The head of the Indonesian Association of Consultants, Poedji
\nRahardjo, said yesterday the crisis had raised the project's
\noperation costs for consultancy companies in the country.<\/p>\n
Poedji said many consultancy companies were also idle as a
\nresult of the project delays. The study of projects was behind
\nbecause of late payments, he said.<\/p>\n
He called for an adjustment to consultancy rates in accordance
\nwith the fluctuation of prices.<\/p>\n
He said the companies must also be able to charge interest for
\npayments that have been delayed. (das)<\/p>",
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