The Effectiveness of Government Equity Participation in Enhancing Development Performance: Challenges and Sustainability Prospects of State-Owned Enterprises in Indonesia

Abstract

This study aims to evaluate the effectiveness of Government Equity Participation (GEP) policies on State-Owned Enterprises (SOEs) in Indonesia by addressing four primary questions: (1) How is GEP policy implemented? (2) To what extent does it impact financial performance? (3) Does GEP strengthen the execution of government assignments? and (4) How can a more accountable and sustainable GEP policy framework be formulated? A qualitative approach was employed through case studies of three strategic SOEs: PT PLN, PT Hutama Karya, and PT Waskita Karya. The findings indicate that the effectiveness of GEP is highly contingent upon the quality of internal governance, institutional preparedness, and project design. GEP has supported capital structure reinforcement and expanded public service delivery, particularly in energy and infrastructure sectors. However, its impact on profitability and operational efficiency varies. PLN successfully utilized GEP for rural electrification and renewable energy projects; Hutama Karya began financial recovery as toll road projects progressed; meanwhile, Waskita Karya continued to face liquidity pressure due to weak management. This study emphasizes the importance of results-based evaluation and long-term development impact, and recommends institutional reform, enhanced transparency, and the use of cost–benefit analysis in GEP policy planning and oversight.