Private Indonesia builder turns architect in search for edge on big state firms

* Revenue of private builders far underperforms state firms

* Nusantara bucks trend, 9-month revenue up 4.0 pct

* Nusantara proposes own toll project in eastern Indonesia

* Indonesia sees infrastructure as economic growth driver

By Cindy Silviana and Eveline Danubrata

JAKARTA, Dec 16 (Reuters) - Largely sidelined in a government-financed public works boom, a small private Indonesian builder is going back to the drawing board to chase new business - literally drafting its own infrastructure projects to seek an edge over state-owned giants.

Private peers of the firm, PT Nusantara Infrastructure Tbk , have seen combined sales fall this year, as state-backed builders won big-money tenders. But Nusantara bucked the overall downturn, boosted by smaller projects like an airport toll road in comparatively underdeveloped eastern Indonesia.

Jakarta has accelerated building of roads, ports and power plants under President Joko Widodo’s $450 billion plan to revive previously flagging growth in Southeast Asia’s biggest economy. Despite his stated goal of giving private firms fair access to deals, in practice the big state firms have dominated.

Nusantara’s chief operating officer Danni Hasan said his firm prefers finding its own projects to taking part in public-private partnerships offered by the government. “If we initiate, that’s already one step ahead of everyone,” said Hasan, describing Nusantara as “more agile” than state firms.

Hasan said that by being first to propose projects like a future Makassar city toll road in the South Sulawesi province in eastern Indonesia, his company can get the right to match any other bid when the government opens up the project to tender.

The private builders have adopted different strategies to try to cope with the dominance of the state firms. While some have focused on trying to submit competitive bids for domestic tenders, others have simply concentrated on snagging deals overseas.

Yet combined revenue at the 11 biggest private infrastructure-related firms listed in Jakarta fell 1.4 percent to a total of 15.5 trillion rupiah ($1.1 billion) over the first nine months of the year, according to Thomson Reuters data.

At Nusantara, which also has businesses in ports, energy, water and telecommunication towers, nine-month revenue rose 4.0 percent to $28.3 million, about a third of its market value. That almost matched the percentage increase at the four main state builders that reported nine-month results: their combined revenue grew 5.5 percent to nearly $2 billion.

Historically, nearly two-thirds of toll road projects in Indonesia have been awarded to state-controlled PT Jasa Marga Tbk alone, according to a presentation by Nusantara, Indonesia’s eighth-biggest private infrastructure-related firm by market value.

Looking ahead, Widodo’s avowed goal of involving the private sector more deeply appears distant. Yet state firms reject any suggestion of favouritism.

The president director of state builder PT Waskita Karya Tbk , M. Choliq, denied benefiting from any preferential treatment. Choliq told reporters on the sidelines of a briefing the contracts are simply awarded to the most capable companies.

According to Raj Kannan, managing director of Jakarta-based consultancy Tusk Advisory, the Indonesian government sees an important role for state enterprises to build “financially unviable but economically important projects”.

“However, in the case of financially viable projects and projects where governments provide credit enhancements, then the private sector should be given priority,” Kannan said.