All About Indonesian Contractors Companies

By Pryastuti Handhayani | Published On: 6 September 2022
All About Indonesian Contractors Companies

With the rapid development of infrastructure in Indonesia, there are now more and more developments in the public sector that are increasingly justifying community mobility, Of course, the existence of this infrastructure development is not due to the contractor companies’ efforts and work. Contractors companies are chosen by individuals with the necessary experience, certification, and accountability to carry out the development plan. But first, we need to define what a contractor is.

What is a Contractor?

According to CNBC, President Jokowi stated in 2022 that the infrastructure sector is one of the prima donnas in the 2023 APBN. Basuki Hadimudjono, Minister of PUPR, has budgeted Rp. 392 trillion for the infrastructure budget, an increase of 7.75% from 2022 to 2023. Of course, the role of a qualified contractor plays a significant role in the success of this project.

A contractor, according to builderspace, is a professional who provides skills or services to a company for a set time. They may be contracted for a specific time or within a specific time frame, with the project duration determined by defined plans, rules, and conditions.

Contractors can be self-employed and operate as sole proprietors, or they can run their own limited company. Independent contractors work on their own and find their clients. Contractors can, however, be hired by agency firms. Those who work for a company may not need to find their clients because the company can provide them with clients. The contractor and his taxes will also be paid by the company.

Contractors, whether employed or self-employed, can work on multiple contracts at the same time. Contractors with transferable skills can often work with a variety of businesses. Several well-known contractors in Indonesia are involved in various government strategic projects.

Types of Contractors

Contractors are classified into three types: construction managers, design-build contractors, and prime contractors. While most contractors are general contractors, there are other types of contractors, such as construction managers, design-build contractors, and prime contractors.

The contractor business area is vast, and each contractor has a distinct business focus and specialization in its field, one of which is:

  • Construction services are provided by a building contractor.
  • A contractor provides labor procurement services.
  • Military and defense contractors

In Indonesia, there are various types of contractors who can help with a project. Others include:

1. Architectural Designer

Buildings are covered by contractors using simple, medium, and advanced technology. There is also architecture for the interior of the property, landscaping, and property maintenance.

2. Civil Engineer

Bridges, roads, railways, runways, underground roads, tunnels, dams, drainage canals, and waterways are common projects for civil contractors.

3. Environmental Consultant

Environmental planning encompasses urban planning, environmental impact analysis, environmental engineering, clean water and waste treatment, and maintenance.

4. Contractor for Electrical Work

Electrical fields include power plant installations, electrical installations, transmission and distribution networks, signals, and telecommunications.

5. Mechanical Contractor

The mechanical field includes air conditioning installations, industrial installations, oil or gas installations, elevator and escalator manufacturing, water pipe manufacturing, and maintenance.

Contractor Responsibilities and Roles

Starting from the builderspace, a contractor’s duties and responsibilities usually change depending on the work they are doing. The work or project will be overseen by a team of supervisors or consultants who are used to working together or who have been appointed by the owner.

If something goes wrong, the contractor can consult with the management team. Before beginning work, the project design must be correct so that even the smallest error is avoided. Among the many responsibilities of the contractor are:

  1. The construction must be carried out in the following regulations and specifications of the plans agreed upon based on the issues in the contract.
  2. Updating project implementation progress reports or, in this case, progress reports to project owners on a daily, weekly, and monthly basis. The report includes the work implementation, completed work, workforce recorded in the project, and other information.
  3. The work schedule adheres to the deadline.
  4. Provide project raw materials, labor, and a suitable location for work implementation to ensure the project runs smoothly.

Several types of contractors companies

If key steps are not taken by the project management team, hiring contractors for construction projects can considerably raise implementation risk. In reality, construction companies end up taking on additional duties and dangers that aren’t necessarily actual, rather than distributing contract risk to contractors. This paper outlines many steps that project managers should take to prevent or minimize risk exposure on construction projects that employ contractor labor.

Starting with PMI, understanding the factors in a contractor evaluation system is critical in designing and maintaining a practical planning and control system. Because the contractor evaluation system must be designed with an understanding of the constraints and motivations that will later influence the contractor’s activity decisions regarding each worker’s performance and incentives, that is, the success of a cost control system is determined in part by the contractor’s motivation to make it operationally effective within the organizational and managerial constraints that may limit its effectiveness.

Hiring contractors for construction projects is now the most common method of construction work. Hiring contractors without clear and specific rules, on the other hand, significantly increases the risk of project implementation. Many project managers are unaware of all the risks they are taking and, as a result, fail by failing to take precautions.

Examples of contractors companies in Indonesia

Of course, the efforts and labor of contractors companies in Indonesia cannot be divorced from the existence of infrastructure development that is continuing to rise quickly. The greatest contractor businesses are those with training, accreditation, and full accountability for carrying out the continuing development strategy. There are several firms with the best reputations in Indonesia, one of which is:

1. PT Adhi Karya (ADHI)

Who recognizes the red spherical emblem in the midst of which are the letters “adhi”? They are indeed PT Adhi Karya. Who would have imagined that this one contractor company was formerly a Dutch corporation given its status as a State-Owned Enterprise (BUMN)? Architecten-Ingenicure-en Annemersbedrijf Associatie Selle en de Bruyn, Reyerse en de Vries N.V., standing with the initials (Associate N.V.). On March 11, 1960, the business was eventually given national status and given the name PN Adhi Karya. The first construction company to be listed on the Indonesia Stock Exchange was Adhi Karya in 2004. (IDX).

Adhi Karya has recently worked on several construction projects, including the Sigli Toll Road Project, Serdang Dam, Kab. Deli Serdang, Margatiga Dam, East Lampung, and the construction of a dam in Gilireng, Wajo. Adhi Karya is not only active in the construction sector, but also in the property, industry, energy, and investment sectors.

2. PT Wijaya Karya (WIKA)

PT Wijaya Karya is another “mega” contractor (WIKA). WIKA grew from a business that only covered electrical installations and water pipes to a civil and building contractor company in the 1970s. WIKA has now established itself as one of the largest contractors companies in the country, with projects in ten other countries around the world.

3. PT Pembangunan Perumahan (PP)

Most Indonesians may be unfamiliar with this company with the iconic “PP” logo. They are, indeed, PT Pembangunan Perumahan (PP). This contractor company, founded in 1953 as NV Pembangunan Perumahan, has been trusted to build houses for PT Semen Gresik Tbk officers as well as large projects such as the Bali Beach Hotel, Ambarukmo Palace Hotel, Samudera Beach Hotel, and Hotel Indonesia. PP also completed one of the megaprojects that year, New Tanjung Priok, with a project value of Rp8.2 trillion. In 2012, they also oversaw the construction of seven airports.

That is an overview of what a contractor is and what types of contractor companies exist in Indonesia. Hopefully, your input will help to improve project management quality.


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