Business · Companies · 10 hrs ago
Indonesia Gives National Private Contractors Priority on Some Projects
Indonesia has introduced new rules for public construction projects through two regulations issued in 2025 and 2026.
The rules expand opportunities for local firms and small businesses by dividing construction work into categories based on company qualifications and project value.
Projects worth more than 15 billion rupiah and up to 50 billion rupiah are for medium-sized firms, while larger firms can handle projects above 50 billion rupiah.
National contractors outside state-owned companies are prioritized for projects worth 50 billion to 100 billion rupiah, according to GAPENSI chairman Andi Rukman N. Karumpa.
The rules also ban lending a company’s name to another firm so that small-business contracts are carried out by eligible businesses.
GAPENSI says the opportunities depend on funded projects being made available, including local projects for small firms.
The group is urging the government to apply the rules consistently and ensure budgets are available for construction work.
Indonesia’s construction procurement rules prioritize national non-state-owned contractors for projects worth Rp 50 billion to Rp 100 billion, according to the head of the contractors’ association GAPENSI.
GAPENSI chairman Andi Rukman N. Karumpa welcomed two regulations that he said create more opportunities for regional businesses, construction micro, small and medium-sized enterprises, and national contractors.
A 2025 public works regulation divides construction firms into five qualification levels, from small to large, with project eligibility tied to their qualifications.
Andi said the new rules need to be backed by actual project packages and sufficient funding to deliver their intended benefits.
He also said local construction projects could support employment, demand for building materials and other businesses.
- Who
- The Indonesian government set the rules. GAPENSI chairman Andi Rukman N. Karumpa welcomed them.
- What
- Rules prioritize national contractors that are not state-owned enterprises for projects worth Rp 50 billion to Rp 100 billion.
- When
- The Public Works Ministry regulation was issued on December 30, 2025, and the LKPP regulation was set on September 22, 2026. Andi commented on October 14, 2026.
- Where
- Indonesia.
- Why
- The rules aim to widen opportunities for regional businesses, small firms and national non-state-owned contractors.
This story does not have two clearly opposing sides.
The Public Works Ministry issued Regulation No. 6 of 2025 on business standards, oversight and sanctions in the public works sector.
LKPP set Regulation No. 3 of 2026 on government procurement through providers.
Andi Rukman N. Karumpa welcomed the regulations and called for project packages and adequate funding to support their implementation.
- Public Works regulation
- No. 6 of 2025, issued December 30, 2025
- LKPP regulation
- No. 3 of 2026, set September 22, 2026
- Priority project segment
- Rp 50 billion to Rp 100 billion
- Construction firm qualifications
- Kecil 1, Kecil 2, Kecil 3, Menengah and Besar
- GAPENSI chairman
- Andi Rukman N. Karumpa
What people are saying
The interesting thing is that in the Rp 50 billion to Rp 100 billion segment, which used to be handled by state-owned enterprises, priority is given to national non-state-owned businesses.
If regional transfer-funded packages are not held back, and infrastructure funds are not zeroed out again, then we are confident that local construction MSMEs in the Rp 2 billion, Rp 7.5 billion and Rp 15 billion segments will truly be given programs for public services at the local level; people’s purchasing power will certainly rise, and economic growth will certainly increase.