Govt Issues Regulation on Infrastructure Project Costs Escalation

Summary

The government approved the proposed price adjustment or contract escalation for infrastructure projects in the 2022 fiscal year. This is stated in Finance Ministry Letter No. S-940/MK/2022 on the proposed Finance Minister Regulation (PMK) for escalating construction work contracts due to rising fuel and asphalt prices.

The letter is a follow-up to the Public Works and Public Housing Minister Letter No. HK.0102-Mn/2154, sent on Oct 26. The letter states that the proposed cost escalation will be processed by the Government Goods/Services Procurement Policy Institute (LKPP). However, Deputy General Chairperson of the Association of Indonesian National Construction Contractors (Gapensi) Didi Iskandar Aulia assessed that granting a contract escalation permit was too late. According to him, many construction contracts had been completed in November, "So the contract escalation has no effect," he said on Monday.

Start your free trial.

If you would like to get a 30-day free unlimited access to all of our insights, please click “Start free trial” button below. If you already have an account, please login.

What do subscribers receive?

As a subscriber, you’ll receive daily insights, weekly business digests, and quarterly industrial reports.

What kind of pieces will i get?

In-depth reports on assumption and impact analysis, as well as update and trends mapping, written by our credible and experienced analysts.

And, there is something else…

Enjoy a 30-day free trial, on us. Feel free to contact us with any additional questions you have.