Construction Services Business Structure

Government Regulation No. 22 of 2020 on implementing regulations on law number 2 of 2017 and has been in force since 23 April 2020 (“GR 22/2020”)  accommodates various matters related to the implementation of construction services business including construction services organization structure.

The business structure of construction services consists of (a) type, nature, classification, and business services and (b) form and qualification. Since GR 22/2020 does note further stipulates the provision on form and qualification, the mentioned form and qualification will be regulated under Ministry of Public Works and Public Housing (“Minister”) regulation.

This legal insight will elaborate the type, nature, classification and business services of construction services as regulated under GR 22/2020.

Type of Construction Services

The type of construction services consists of:

  1. Construction consultancy services which may provide services as assessment, planning, design, supervision, and construction management. The description for each activities as describe before, are as follows:
Assessment The assessment process is implemented in order to produce documents that provide information on Identification of requirements, objectives of the construction work, construction organization system, and strategy and program for construction organization.
Planning This comprises two activities, specially feasibility studies for buildings and/or analysis of the effects of traffic.
Design The designing of buildings must at least encompass the following activities: (a) determination of design standards and methods, (b) design implementation, and (c) Presentation of construction design.
Supervision Supervision is aimed at ensuring the fulfillment of various technical and administrative contract requirements
Construction Management Project management, Construction management, Quality management, and Construction safety management.
  1. Construction works services which may provide services as construction, operation, maintenance, dismantling and reconstruction. The description for each activity as describe before, are as follows:
Construction This is defined as a planned, physical implementation activity which is carried out within the appropriate timeframe and which should encompass appropriate quality and costs, as determined under the relevant construction plan, in order to realize the construction of a building. The construction itself must full requirements relating to land availability and licensing.
Operation Operations should be conducted in accordance with the building plan standard, as well as with standard operating procedures and are considered part of an integrated service agreement.
Maintenance Maintenance is conducted across all or parts of buildings in order to maintain the performance of said buildings, along with related facilities and infrastructure.
Dismantling Dismantling is implemented in relation to buildings which meet certain criteria, especially if the function is no longer required, endanger public safety unlicensed, the land will be reused, and exceeded their planned lifetimes, with extensions being technically impossible.
Reconstruction Reconstruction encompasses the renovation, rehabilitation and restoration of buildings.
  1. Integrated construction works which may provide services as design and engineering, procurement, and implementation. The description for each activity as described before, are design (rancang bangun) and engineering, procurement and implementation. Engineering, procurement, and implementation as mentioned before consists of (a) Engineering involves assessments, planning, design, supervision and/or management of constructions as part of a construction-consultation service, (b) Procurement refers to the procurement of goods or services and (c) Implementation entails the act of construction, maintenance, operation, dismantling and reconstruction.
how can we help you?

Contact us or submit a business inquiry online.

“SSA Advocates’ solid footing in the Indonesian legal market can be attributed to its dispute resolution and restructuring and insolvency work. Suhardi Somomoeljono is a key contact.”

Asialaw (Dispute Resolution)
, Asialaw, 2020