The Board of Commissioners is optimism for the Company’s business prospects in 2020. Such optimism is motivated by the projected economic growth that continues to improve, so that it is expected to be able to boost economic capability in a more positive direction, particularly in the aspect of investment performance.

Dear Shareholders and Stakeholders,

First of all, let us praise the Almighty God for His blessings throughout 2019 we managed to pass the year with good performance. The Board of Commissioners is proud to be able to take part in achieving such performance and excellence in the construction services industry. In carrying out its strategic functions, the Board of Commissioners seeks to ensure the checks and balances process by monitoring the adequacy of supervision and effectiveness of compliance with the applicable laws and regulations that are based on the principles of good corporate governance.

The Annual Report of 2019 fiscal year contains a comprehensive picture, highlights report and recapitulation of Waskita Karya’s performance throughout 2019 and serves as a proof of our responsibility and integrity to Shareholders and stakeholders.


The trade war between the United States and China, uncertainty about the outcome of Brexit negotiations, as well as geopolitical tensions in a number of countries such as Hong Kong and the Middle East provided negative sentiments that triggered slowdown in economy and global demand throughout 2019. Given the conditions, the World Bank in its report titled “Global Economic Prospects: Slow Growth, Policy Challenges” estimated global economic growth at the level of 2.4%.

The majority of central banks in the world responded to the slowing economic growth and weakening inflation by implementing more accommodative monetary policies, among others by reducing interest rates carried by the Fed and a number of other central banks in other countries. For four consecutive years since July 2019, Bank Indonesia cut its benchmark interest rate up to the level of 5%.

In terms of national scope, the slowdown in the global economy has also contributed to suppressing international trade activities, reducing manufacturing activity, and affecting export performance. As a result, Indonesia’s economic growth as of the end of 2019 which was projected to reach 5.3% in the 2019APBN, is estimated to only reach 5.02%, lower than that of 2018 at 5.17%

Amid tighter global and national macro conditions and environment, the national inflation rate remained stable at 2.72%, lower than that of 2018 which was recorded at 3.13%, however still within Bank Indonesia’s target limit of 3.5 ± 1%.The stability was triggered by the adequacy of production capacity and supply to demand, good coordination in maintaining supply availability, stable exchange rates, to maintained price expectations in the coming year.

Even though the economic conditions were not favorable and were improving,the Government continued the equal distribution of infrastructure in various regions in realizing Indonesia’s connectivity as stipulated in the 2015-2019 National MediumTerm Development Plan (RPJMN). The Government emphasized that infrastructure development will continue by prioritizing development that can connect new points of economic growth to increase economic equality. The government has set 223 National Strategic Projects and 27 Priority Projects with an investment value of Rp2,500 trillion in 15 sectors spread across Indonesia, including toll roads and national roads, inter-city and inner-city rail infrastructure, airport revitalization, a million house program, oil refinery construction, irrigation dams,special economic zones, fisheries and marine, to education infrastructure.

In the integration of the technology-based 4.0 industrial revolution,the Government has begun to implement an integrated construction services information system as mandated in Law No. 2 of 2017 concerning Construction Services. Through the application of this technology, it is expected that the stages of construction implementation, both from the planning, auction, construction to operation and maintenance stages can run more effectively and efficiently.


Throughout 2019, the Board of Commissioners proactively monitored and supervised the performance of the Board of Directors in carrying out the management functions of the Company so that checks and balances can be properly fulfilled. In general, the Board of Commissioners appreciates and views the Board of Directors and all elements of management have strived and worked hard in achieving their best performance in realizing the targets and business plans set out in the Work Plan and Corporate Budget (RKAP), although facing a number of internal and external challenges. Despite not meeting the targets set in the RKAP,the Company managed to record a new contract value of Rp26.1 trillion, with the largest contribution coming from the Prabumulih - Muara Enim toll road project.Considering that there are pending projects and will be continued in 2020, the Board of Commissioners is optimistic that the Company is able to record growth in the value of new contracts more than this year.

In 2019, the Company managed to obtain income through the divestment of two toll roads, namely 40% of the Solo Ngawi toll road operated by PT Jasamarga Solo Ngawi and the other 40% in the Ngawi Kertosono Kediri toll road operated by PT Jasamarga Ngawi Kertosono Kediri.

Based on an analysis on the 2019 Waskita Karya financial statements, a number of performance indicators and key ratios on the financial statements showed positive performance to meet the various required covenants, even able to reduce the debt to equity ratio by 2.3 times up to the end of 2019.

Based on this performance, the Board of Commissioners recommends that the Board of Directors and its staff to be more innovative and thorough in the future in increasing the acquisition of new contracts, maintaining liquidity capabilities, and improving the quality of project management. Even though the challenges in the construction and infrastructure sectors are increasingly dynamic, opportunities for business development are still wide open, especially considering the infrastructure budget in the 2020 APBN which increased by 4.9% to Rp419.2 trillion from the previous year. Coupled with the planned relocation of the National Capital, the Company is expected to reap better performance in helping the Government realize equitable development to improve productivity and welfare of the community.


The Board of Commissioners proactively reviews and monitors the implementation of policies and strategies established at the beginning of the year with the Board of Directors, both in operational and financial management. These constructive and solutional recommendations and suggestions for operational and financial management will then be submitted to the Board of Directors and other interested parties through Joint Meetings of Board of Commissioners and Board of Directors and Coordination Meetings which are held quarterly to discuss aspects that require special attention. The Board of Commissioners also gave their suggestions and input in the determination of plans and targets contained in the Corporate Budget and Work Plan (RKAP) prepared at the beginning of the year by taking into account internal and external assumptions that were considered to have a significant influence on the Company’s business continuity

The Board of Commissioners periodically conducts direct supervision in the field through work visit activities to the project site to ensure the adequacy of supervision and to review the suitability of the process and work results with the specified qualifications.

In facing business challenges that are increasingly challenging, the Board of Commissioners emphasizes the importance of growing better work ethic in all lines of business that are run with the available resources. To achieve these objectives, it is necessary to establish a strategy that is mature, realistic, and consistent with the conditions of competition to answer the encountered problems and challenges

In line with the direction from the Government which calls on BUMN Karya to optimize its capacity to achieve the determined goals and targets, the Board of Commissioners seeks to build awareness with all involved parties, from the top management ranks to other supporting instruments, including subsidiaries, to make changes and improvements to every aspects, including in the financial, operational, legal, and human capital management.


TThe Board of Commissioners is responsible for overseeing and monitoring the implemented policies and providing overall views and input on the Board of Directors’ performance reports. All inputs and suggestions are then delivered through joint meetings and quarterly coordination meetings. In addition to submitting recommendations, the Board of Commissioners also provides recommendations on proposals prepared by the Board of Directors by adjusting the provisions of the Articles of Association, the aspirations of Shareholders, and the principles of good corporate governance.

In maintaining its relevance to the Company’s development, the Board of Commissioners periodically monitors the Company’s activities and provides opinions and suggestions regarding the plan and implementation of RJPP, RKAP, as well as any issues deemed important to the Company.


The Board of Commissioners is optimism for the Company’s business prospects in 2020. Such optimism is motivated by the projected economic growth that continues to improve, so that it is expected to be able to boost economic capability in a more positive direction, particularly in the aspect of investment performance. Reflecting on the direction of global economic growth which is expected to increase in the upcoming year, the Company considers that Indonesian Government’s decision to target economic growth in the range of 5.4% - 6.0% as stated in the National Medium-Term Development Plan (RPJMN) 2020 - 2024 opens wider opportunities for the potential development of the Company’s business in the future.

Another prospect that needs to be examined is the plans and decisions for the construction of the New Capital in Penajam Paser Utara and Kutai Kertanegara, where the implementation is carried out in stages with three main stages, namely the area design masterplan, the construction of basic infrastructure, and the construction of houses and office buildings. The Company, armed with its excellence, sees that this has become another prospective opportunity for the Company’s business development in the future, especially with its status as a BUMN Karya entity

In terms of infrastructure, the Government’s initiative which has established clear policy directions and focus on sustainable infrastructure development opens broader and prospective opportunities for the Company’s business sustainability. The Board of Commissioners observes that there are a number of Government policies related to infrastructure that support opportunities for the Company’s business development in the future, including the construction of a new National Capital, additional National Strategic Projects, development of ten new tourist destinations in KSPN priority, and development of major projects to strengthen program focus and control in the 2020- 2024 RPJMN. Welcoming these prospects,the Company supports the strategic efforts prepared by the Board of Directors to set targets for obtaining a New ContractValue that is higher than the achievements in 2019, as stipulated in the 2020 RKAP.

However, to maintain the Company’s sustainable growth, setting targets for the acquisition of New Contract Values is always accompanied by efforts to increase production effectiveness and efficiency, accelerate the process of collecting receivables, and improve the business performance of the divestment of several toll roads that have been operating. Reflecting on the successful implementation of the divestment in 2019, the Board of Commissioners is optimistic that the divestment plans can be implemented well in the coming years.


In integrating itssupervisory function,the Board of Commissioners also bears the responsibility of ensuring the fulfillment of the best practices of Good Corporate Governance comprehensively in all business processes and activities. The Board of Commissioners and the Board of Directors always encourage the optimization of implementation and become a good role model so that the culture of GCG awareness can grow in every individual of the Company

In addition to monitoring the implementation of GCG, the Board of Commissioners continues to improve and update GCG policies and tools regularly. The policy is outlined in internal regulations governing the implementation of GCG, including the GCG Code, Board Manual, Corporate Code of Conduct, and the Whistleblowing System (WBS).

Throughout 2019, the Board of Commissioners supervised various strategic aspects of the Company and regularly met with Management and provides recommendations related to operational performance, governance, financial performance, risk management, and external relations with stakeholders, as well as other relevant issues.

Taking into account various issues that have hit several SOE companies in recent times, the Ministry of SOE as the majority shareholder of SOEs has encouraged the strengthening of the supervisory function of the Board of Commissioners, especially the quality of compliance with applicable laws and regulations as well as the implementation of corporate principles that is clean and free from fraud.To respond to these obligations,the Board of Commissioners empowers committees under its level to monitor and provide recommendations for improvement on aspects that are the responsibility of the Board of Commissioners’ oversight. In this regard, the Board of Commissioners supports the Board of Directors along with all instruments of the Company to strengthen the implementation of the principles of good corporate governance, including transparency, accountability, responsibility, independence, and fairness. Both the Board of Commissioners and the Board of Directors share the responsibility to instill the culture and values of integrity and ethics in a sustainable manner in carrying out the activities and business processes of the company.

The Board of Commissioners’ integrity towards the optimal implementation of GCG principles and best practices can be seen from the quality of the achievements of the GCG assessment in 2019 which achieved 88.058 with the “Excellent”.The compliance function which is a priority in implementing GCG is also to be proud of, because as of the end of 2019 there were no reports of irregularities related to corruption, gratification, or administrative sanctions imposed on the Company.


The Board of Commissioners places high attention on implementation of good corporate governance practices and upholding the values of integrity and compliance in running the Company’s business. Based on this commitment, the Board of Commissioners utilizes the policy tools and the implementation of the Whistleblowing System as a mechanism that supports the Company to prevent and conduct early warning systems of indications of irregularities and fraud practices that occur in the Company.

In ensuring the effectiveness of the implementation of the Whistleblowing System,the Company improved the policy related to the Whistleblowing System mechanism in 2019 and encouraged Management to implement WBS effectively. In addition, in 2019 the Company also added a new Whistleblowing System channel via website The Internal Audit Division as the Manager of the Whistleblowing System has received several reports through this channel and has followed it up in accordance with applicable regulations and legal provisions.

Throughout 2019, the Board of Commissioners considered that the implementation of the Whistleblowing System in the Company had been carried out quite well,especially with the Whistleblowing System banner placed on the front page of the Company’s website as a form of WBS socialization to stakeholders. In addition, the Whistleblowing System has also been socialized and internalized through Coordination Meetings and through the installation of banners in the lobby and every floor of the Waskita office room.As of the end of 2019, there have been four complaints of violations that have been followed up with the final status closed.


In carrying out the duties, functions, and responsibilities of oversight of the policies and planning of the Board of Directors in managing the Company, the Board of Commissioners is assisted by the Audit Committee and Risk Management Committee.

These two committees assist the Board of Commissioners by regularly reviewing management reports, preparing reviews and recommendations related to supervision in the field of internal control and risk management which include accounting and finance, human resources, quality, occupational health and safety, operations, and information systems.

The Audit Committee and Risk Management Committee always carry out active coordination with all involved partners so that the processes and mechanisms of understanding and review of information needed by the Board of Commissioners can be carried out properly. In addition, the Board of Commissioners reviewed that it has actively provided the results of reviews and recommendations related to the supervision of the effectiveness of internal control and the adequacy of risk management, to be further utilized as a consideration for the Board of Commissioners in the decision making process.Thus,the Board of Commissioners views the functions and duties of the committees under the Board of Commissioners have been carried out properly.


The composition of the Board of Commissioners for the period of January 1, 2019 to May 9, 2019 consisted of 1 (one) President Commissioner, 3 (three) Commissioners, and 3 (three) Independent Commissioners, as follows:

Name Position
Badrodin Haiti President Commissioner
R Agus Sartono Commissioner
Arif Baharudin Commissioner
Danis Hidayat Sumadilaga Commissioner
Muhammad Aqil Irham Independent Commissioner
Viktor S Sirait Independent Commissioner
Muradi Independent Commissioner


The Board of Commissioners highly appreciates the performance and positive achievements made throughout 2019.For this reason, the Board of Commissioners would like to extend our gratitude to the Board of Directors and all members of the Company for their hard work, dedication, and innovation in contributing to realize the vision and mission of Company

We would also like to express our deepest appreciation to shareholders,stakeholders and customers for the trust and loyalty given so that the Company can continue to maintain excellence as a leading construction company in Indonesia. All trust that has been established has become a provision for us to be more solid to achieve the best performance and optimal added value on an ongoing basis.

Jakarta, March 29, 2020

President Commissioner

PT Waskita Karya (Persero) Tbk

Badrodin Haiti