Construction in Indonesia: Looking Back and Moving Forward

173 Pages·2022·4.156 MB·English

by  Toong-Khuan Chan (editor), Krishna Suryanto Pribadi (editor)

“This book is extensive in the coverage of all aspects relevant about
Indonesia’s construction industry, past and present. Scholars and researchers
of construction industry of developing countries, policy makers of various
countries, and practitioners of the construction industry about to work in
Indonesia will find this a useful companion book.”
Professor Abdul Rashid Abdul Aziz, School of Housing,
Building and Planning, Universiti Sains Malaysia

Construction in Indonesia
Construction in Indonesia presents an in-depth analysis of the construction sector
and suggests pathways to further improve the performance and efficiency of the
industry. Experts in economics, management, and engineering have examined
all aspects of the Indonesian construction sector to provide readers with unique
insights into the workings of this important sector of the economy, and to ana-
lyse how both economic growth and policies have contributed to Indonesia’s
development and how lessons learned can be used to guide future growth.
Indonesia’s construction industry is set to grow rapidly after a decade of exten-
sive investments in public infrastructure projects emphasizing new transporta-
tion, utilities, and social infrastructure buildings. The book is divided into two
sections: Looking Back will focus on a critical analysis of the construction indus-
try, its achievements and its failures, and the impact of the efficiency of the
sector in bringing about improvements to overall quality of life. The primary pur-
pose of the second section, Moving Forward, is to suggest directions and emphases
for future action by the government of Indonesia (and other stakeholders) to
promote the continued development of the construction industry.
This book will be a valuable resource for policy makers in government and
industry and other stakeholders to obtain a succinct view of the sector in the
archipelago and to appreciate its potential to bring about improvements to the
quality of life in Indonesia.
Dr Toong-Khuan Chan is Senior Lecturer in Construction Management and
Technology, at the Faculty of Architecture Building and Planning, University
of Melbourne.
Professor Dr Ir Krishna Suryanto Pribadi is a Professor in the Faculty of Civil
and Environmental Engineering at Institut Teknologi Bandung, Indonesia.
Routledge Research Collections for Construction in Developing
Countries
Series Editors: Clinton Aigbavboa, Wellington Thwala,
Chimay Anumba, and David Edwards
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John Aliu, Clinton Aigbavboa and Wellington Thwala
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Developing the Competitive Advantage of Indigenous Construction Firms
Matthew Kwaw Somiah, Clinton Aigbavboa and Wellington Thwala
Construction Digitalisation
A Capability Maturity Model for Construction Organisations
Douglas Aghimien, Clinton Aigbavboa, Ayodeji Oke and Wellington Thwala
Sustainable Construction in the Era of the Fourth Industrial Revolution
Ayodeji E. Oke, Clinton O. Aigbavboa, Stephen S. Segun and Wellington D. Thwala
Construction in Indonesia: Looking Back and Moving Forward
Toong-Khuan Chan and Krishna Suryanto Pribadi
Construction in Indonesia
Looking Back and Moving Forward
Edited by Toong-Khuan Chan and
Krishna Suryanto Pribadi
First published 2022
by Routledge
4 Park Square, Milton Park, Abingdon, Oxon OX14 4RN
and by Routledge
605 Third Avenue, New York, NY 10158
Routledge is an imprint of the Taylor & Francis Group, an informa business
© 2022 selection and editorial matter, Toong-Khuan Chan and Krishna
Suryanto Pribadi; individual chapters, the contributors
The right of Toong-Khuan Chan and Krishna Suryanto Pribadi to be
identified as the authors of the editorial material, and of the authors for
their individual chapters, has been asserted in accordance with sections
77 and 78 of the Copyright, Designs and Patents Act 1988.
All rights reserved. No part of this book may be reprinted or reproduced
or utilised in any form or by any electronic, mechanical, or other means,
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or in any information storage or retrieval system, without permission in
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or registered trademarks, and are used only for identification and
explanation without intent to infringe.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available from the British Library
Library of Congress Cataloging-in-Publication Data
Names: Chan, Toong Khuan, editor. | Pribadi, Krishna Suryanto, editor.
Title: Construction in Indonesia : looking back and moving forward / edited
by Toong Khuan Chan and Krishna Suryanto Pribadi.
Description: Abingdon, Oxon ; New York, NY : Routledge, 2022. | Series:
Routledge research collections for construction in developing countries
| Includes bibliographical references and index.
Identifiers: LCCN 2021053006 (print) | LCCN 2021053007 (ebook) | ISBN
9780367712174 (hardback) | ISBN 9780367712211 (paperback) | ISBN
9781003149866 (ebook)
Subjects: LCSH: Construction industry--Indonesia.
Classification: LCC HD9715.I642 C66 2022 (print) | LCC HD9715.I642
(ebook) | DDC 338.4/762409598--dc23/eng/20220112
LC record available at https://lccn.loc.gov/2021053006
LC ebook record available at https://lccn.loc.gov/2021053007
ISBN: 978-0-367-71217-4 (hbk)
ISBN: 978-0-367-71221-1 (pbk)
ISBN: 978-1-003-14986-6 (ebk)
DOI: 10.1201/9781003149866
Typeset in Goudy
by SPi Technologies India Pvt Ltd (Straive)
Contents
Preface ix
List of contributors xi
1 Indonesia and National Development Planning 1
KRISHNA S PRIBADI AND TOONG-KHUAN CHAN
2 Construction Industry and Governing Legislation 19
KRISHNA S PRIBADI, BIEMO W SOEMARDI, AKHMAD SURAJI AND
TOONG-KHUAN CHAN
3 Construction Companies 37
TOONG-KHUAN CHAN AND KRISHNA S PRIBADI
4 Construction Workers and the Informal Sector 54
KRISHNA S PRIBADI AND TOONG-KHUAN CHAN
5 Construction Supply Chain 72
MUHAMAD ABDUH AND TOONG-KHUAN CHAN
6 Financing of Infrastructure Investments 92
TOONG-KHUAN CHAN AND KRISHNA S PRIBADI
7 New Capital City 109
KRISHNA S PRIBADI AND TOONG-KHUAN CHAN
8 Education, Training, and Certification 119
MUHAMAD ABDUH, KRISHNA S PRIBADI, BIEMO W SOEMARDI AND
TOONG-KHUAN CHAN
viii Contents
9 China’s Belt and Road Initiative in Indonesia: A Case Study
of the Jakarta-Bandung High-Speed Rail 131
BIEMO W SOEMARDI AND TOONG-KHUAN CHAN
10 Strategies to Improve the Indonesian Construction Industry 143
KRISHNA S PRIBADI, AKHMAD SURAJI AND TOONG-KHUAN CHAN
Index 155
Preface
Indonesia’s national economy is expected to grow rapidly after a decade of sig-
nificant investments in public infrastructure projects emphasizing new roads,
railways, ports, airports, power generation and distribution, water supply and
sanitation, schools, and hospitals. Its capital, Jakarta, is a vibrant, bustling,
and modern city complete with newly completed urban transportation system,
gleaming skyscrapers, smooth flowing traffic on tolled highways, and a high-
speed rail under construction to Bandung. Combined with the recent announce-
ment for a new capital city in East Kalimantan, the construction industry is
under increasing pressure to perform and deliver on this national development
agenda and to support economic growth. As in any other developing economy,
the Indonesian construction sector is beset by numerous challenges namely a
shortage of skilled workers (and an abundance of low skilled workers), low tech-
nology adoption, and poor regulatory framework and compliance. Furthermore,
the construction sector operates in a complicated regulatory environment where
multiple government agencies are involved in legislation, approvals, and funding
for infrastructure.
The aim of this book is to present an in-depth analysis of the Indonesian
construction industry and suggests pathways to further improve the performance
and efficiency of this sector. Working from both economics and development
perspectives, experts in economics, construction management, and engineering
have examined several aspects of the Indonesian construction sector to provide
readers with unique insights into the workings of this important sector of the
economy. The book is in two sections: Looking Back, which entails the first five
chapters, focused on a critical analysis of the construction industry, its contrac-
tors and workers, and the supply chain that includes the manufacturers and sup-
pliers of construction materials; and Moving Forward, which suggests directions
and emphases for future action by the government of Indonesia. The second
section examines and discusses new financing structures, the opportunities that
the construction of its new capital city offer, its participation in China’s Belt
and Road Initiative (BRI), and strategies for construction industry development.
Several fundamental questions for the construction sector include the issue of
foreign capital and technology, the involvement of government and state-owned
enterprises versus private sector firms, funding for worker education and training,
and political will to strengthen regulatory compliance. Both the government and