Contractors Association to Write to PU Minister, Effect of Material Price Increase

Deputy General Chair for Cooperation between AKI Members and Director of Operations I WSKT Ari Asmoko. Photo: Theresia Agatha/VOI

JAKARTA - The Indonesian Contractors Association (AKI) revealed that it plans to write a letter to the Minister of Public Works (PU) to encourage the issuance of a discretionary adjustment of project prices amid a surge in the prices of key materials and industrial fuels that are bottlenecks in the construction sector.

Deputy Chairman of the AKI Member Inter-Cooperation and Director of Operations I of PT Waskita Karya (Persero) Tbk (WSKT) Ari Asmoko said that the surge in raw material prices such as asphalt and industrial fuel (BBM) has currently pressured the operational cost structure of various infrastructure projects in the field.

Therefore, said Ari, the government as the project owner is expected to immediately respond to the challenge.

"We want to collaborate with friends first, this must be voiced together to the Ministry (PU). Because if it is alone, I think it is less effective, we encourage it to be able to set discretion," said Ari when met by reporters at the Coffee Morning titled "Formulating the Value of Escalation of Construction Prices in the AKI Version" in Jakarta, Tuesday, August 4.

To strengthen the argument for the proposed price escalation, AKI admitted that he was collecting data on the index of the increase in the dominant material prices released by the Central Statistics Agency (BPS) this week.

The historical data of the price increase from BPS will later be attached to an official letter to the Ministry of PU and the project owners (owners) as proof of the validity of the financial burden borne by the contractor.

"Then, later we will send it to the Ministry (PU) or others as the owner of the project related to what we are experiencing. Then it also needs coordination with BPKP so that the standing is the same, then at the end we coordinate with the Prosecutor's Office so that it is smooth," he said.

"We are trying to have certain policies, yes, even though it can't help at all. But, the point is, yes, it doesn't matter," he concluded.

Based on AKI data, during the period from February 28 to July 1, 2026, the rupiah exchange rate weakened by 7.82 percent from the strongest level of Rp16,677 per dollar to Rp17,964 per US dollar. Meanwhile, world oil prices increased by 37.41 percent from 52.10 US dollars per barrel to 71.57 US dollars per barrel.

As a result, the domestic industrial solar price rose significantly to 41.52 percent to Rp23,050 per liter. Even though, fuel is the most important capital component in the construction sector.

This condition causes almost all components of project implementation costs to increase simultaneously. For example, the main material component such as concrete iron is also reported to have increased by 27.78 percent, asphalt by 23.85 percent and ready-mix by 9.77 percent.