Indonesia plans to build a toll highway at a length of 1,167 km around the country’s main island, as part of the infrastructure projects outlined by President Joko Widodo that aim to boost economic activity, Invest-Gate reports.

The mega project is considered evidence of the massive spending boom over the past decade by Indonesia’s largest construction and real estate developers, many of which are now extremely indebted and facing close maturities.

The debt of Indonesia’s top 4 construction companies skyrockets by 1,200% to $8.6 bn since the incumbent president assumed his office.

John Teja, Director at PT Ciptadana Sekuritas Asia, notes that the amount of debt accumulated by construction companies in Indonesia is similar to what has happened in other countries, such as the real estate sector in China, adding that something needs to be done this year, or the problem may spread to other sectors such as suppliers and vendors.

Indonesian state-owned construction company, Waskita Karya, has IDR 2.3 tn of domestic bonds due later this month and another IDR 2.4 tn due by May 2024, according to data compiled by Bloomberg.

When asked about the company’s broad debt situation, Waskita Karya’s President Director Destiawan Soewardjono states that he is looking for long-term financing from abroad to give the company more space and time to rearrange its.

Waskita Karya’s long-term liabilities reach an all-time high of IDR 62 tn at the end of its fiscal third quarter, and its financial charges, which include interest expenses on its bonds and loans, are more than three times its gross profit.