THE BEST PROJECT FUNDING SCHEME SOLUTION TO STABILIZE CASH FLOW USING VALUE-FOCUSED THINKING AND ANALYTIC HIERARCHY PROCESS

• Main Author: Susilawati, Endang
• Format: Theses
• Language: Indonesia
• Subjects: Manajemen umum
• Online Access: https://digilib.itb.ac.id/gdl/view/79676
• Institution: Institut Teknologi Bandung

PT Rekadaya Elektrika is a subsidiary of PT PLN Nusantara Power engaged in Engineering, Procurement, and Construction (EPC) in the power sector. In early 2023, PT Rekadaya Elektrika signed a contract for the procurement, construction, testing, and commissioning of the Bali LNG Terminal with a short project duration of 8 months. The LNG terminal is intended to be used as the primary energy source for the power plant that electrifies the island of Bali. Therefore, completing the LNG terminal construction project within the contract duration is crucial and any delay is intolerable. The substantial contract value and the short project duration require well-planned financial support to ensure that cash flow remains steady and does not impede project completion. One of the key support factors in the EPC business is the availability of working capital for project implementation costs. However, the company faces liquidity constraints at the beginning of the year, where the cash and cash equivalents are insufficient for the execution of projects in 2023. With the Term of Payment scheme, specifically Monthly Progress without any Down Payment in this project, precise decision-making is essential to find the best solution for addressing the project financing needs as working capital to guarantee on-time project completion. This research utilizes two methodological approaches to derive strategic solutions. The Value-Focused Thinking (VFT) approach is employed to formulate criteria and alternative solutions. Through interviews and brainstorming involving Subject Matter Experts and relevant stakeholders, five financing alternatives are formulated, namely (1) Shareholder Loan from PT PLN NP; (2) Notional Pooling PLN Group Facility; (3) Non-Cash Loan PT RE Facility; (4) Non-Cash Loan PT PLN NP Facility; and (5) Non-Cash Loan PT PLN Facility. The subsequent methodological approach uses the Analytic Hierarchy Process (AHP) to determine the best financing solution. The research findings reveal that the Notional Pooling PLN Group Facility is the optimal financing source for working capital in the construction of the Bali LNG Terminal, offering advantages such as an easy application process, sufficient deficit limit for project costs, and maintained positive cash flow. The final stage of the research involves developing an implementation plan using the 5W+1H method (What, When, Where, Who, When, and How).