Improvement of Risk Management Implementation to Achieve Long-Term Goals: A Case Study of an Electricity Infrastructure Project Development Company

PT Perusahaan Listrik Negara (Persero) or PLN is a state own company in Indonesia with core business is the supply of electricity, especially in power plant, transmission, and distribution. PT PLN (Persero) Unit Induk Pembangunan Jawa Bagian Tengah or PLN UIP JBT is one of PLN units which is responsible for the development of electricity infrastructure projects (power plant, transmission, and substation). PLN UIP JBT is responsible for the development of electricity infrastructure projects in West Java and Central Java. Several PLN UIP JBT project targets were completed beyond the target time and there are still many electricity infrastructure project targets that PLN UIP JBT must complete. The risk management aspect is an important aspect of governance and can be a catalyst for business processes in decision making. The success of the project and its planning increases significantly by implementing effective risk management. Therefore, improvement of risk management implementation of PLN UIP JBT is needed so that future project completion targets can be completed on time, with the right quality, and at the right cost. Improvement of risk management implementation of PLN UIP JBT is done by adding external environment analysis using general environment analysis and internal organization analysis using resources analysis and activity system map before the risk management process consisting of determining scope, context, criteria, risk identification, risk analysis, risk evaluation, and risk treatment. External environmental analysis is carried out to determine the external context while internal organizational analysis is carried out to determine the scope and internal context for the risk management process of PLN UIP JBT. This study concludes that PLN UIP JBT faces 16 risks consisting of 15 negative risks and one positive risk. The identified risks of PLN UIP JBT are risks related to budgeting, project design, procurement, licensing, land acquisition, legal, occupational health and safety, material, project completion time, contract, project handover, project payment, and other income. The risk treatments or mitigations for PLN UIP JBT are stakeholder coordination, regulatory compliance, cooperation, collaboration with related parties, and digitalization. 

Introduction

Construction projects frequently have unforeseen delays, and mitigating such delays is one of the most difficult challenges (Rashid, 2020). The delays in construction are shaped by intertwined factors, ranging from operational to managerial challenges (Al-Batainehet al., 2024). The success of the project and its planning were significantly enhanced by effective risk management (Urbanskiet al., 2019). Moreover, efficient and thorough risk management is essential for the achievement of infrastructure projects (Rahman, 2024).

PT Perusahaan Listrik Negara/State Electricity Company (Persero) or PLN is a state own company in Indonesia with core business is the supply of electricity, especially in power plant, transmission, and distribution. PT PLN (Persero) Unit Induk Pembangunan Jawa Bagian Tengah/Main Development Unit of Central Java Section or PLN UIP JBT is one of PLN units which is responsible for the development of electricity infrastructure projects (power plant, transmission, and substation). PLN UIP JBT is responsible for the development of electricity infrastructure projects in West Java and Central Java. Compared to the targets set in the PLN Electricity Supply Business Plan 2021–2030, several electricity infrastructure projects by PLN UIP JBT experienced delays in completion during the 2021–2024 period, including power plant, transmissions, and substations. Furthermore, the PLN Electricity Supply Business Plan 2025–2034 reveals that numerous projects scheduled for Commercial Operation Dates (COD) between 2025 and 2034. These conditions indicate that future infrastructure development targets will be increasingly challenging to meet. Therefore, improvement of risk management implementation of PLN UIP JBT is needed so that future project completion targets can be completed on time, with the right quality, and at the right cost.

Literature Review

External Environment Analysis

A firm’s competitive actions and responses are impacted by the conditions in the three components (general, industry and competitor) of its external environment, as well as its comprehension of those conditions (Hittet al., 2019). The general environment is devided into seven categories: demographic, economic, political/legal, sociocultural, technological, global, and sustainable physical (Hittet al., 2019). Recognizing opportunities and threats is an essential goal of studying the general environment (Hittet al., 2019).

Internal Organization Analysis

Firms recognize their strengths and weaknesses by analyzing their internal organization as represented by their resources, capabilities, and core competencies (Hittet al., 2019). Resources are any assets that a company can draw on while developing and implementing a strategy (Rothaermel, 2023). Broad in scope, resources cover a spectrum of individual, social, and organizational phenomena (Hittet al., 2019). A company’s production process requires resources, which might be tangible or intangible (Hittet al., 2019). Hittet al. (2019) define tangible resources as assets that can be observed and measured. The four primary categories of tangible resources are financial, organizational, physical and technological (Hittet al., 2019). According to Hittet al. (2019), intangible resources are assets that have a solid historical foundation, accumulate over time, and are difficult for competitors to research and replicate. The three primary category of intangible resources are human, innovation and reputational (Hittet al., 2019)

The activity system map is developed to show how a small set of core competencies (what enterprise does well), together with specific management policies that support those competencies, fit together to create strategic position (Porter, 1985). A strategic activity system sees a company as a network of interconnected activities that can form the basis of its competitive advantage (Porter, 1996). An activity system map is created by first defining the core elements of the value proposition, then identifying the most prominent activities carried out in the business, namely those activities that are most responsible for providing consumer value or that generate considerable costs (Magretta, 2012).

Risk

Risk is defined as uncertainty that affects objectives (British Standards Institution, 2018, “BS ISO 31000:2018”). Risk signifies uncertainty about the future, representing a potential divergence from an expected or assessed result (Kedaryaet al., 2023). Risk is inherent in every human activity, risk can be positive or negative according to the activity and the situation where the activity is carried out, as well as the ability of the party carrying out the activity (Faturohmanet al., 2021). Risk is present everywhere and, regrettably, cannot be completely eliminated (Scott, 2016). However, risks can be managed effectively by reducing the level of probability of risk causes and the level of risk impact (Scott, 2016).

Risk Management

Risk management refers to an organization’s strategy to address potential risks to ensure the successful achievement of its goals and objectives (Susilo, 2017). The risk management includes risk management principles, risk management framework, and risk management process (British Standards Institution, 2018, “BS ISO 31000:2018”). The principles offer guidance on the characteristics of effective and efficient risk management, communicating its value and explaining its intention and purpose (British Standards Institution, 2018, “BS ISO 31000:2018”). The aim of the risk management framework is to assist the organization in integrating risk management into significant activities and functions (British Standards Institution, 2018, “BS ISO 31000:2018”). The process of managing risk involves the systematic implementation of policies, procedures and practices to the activities of communicating and consulting, establishing the context and assessing, treating, monitoring, reviewing, recording and reporting risk (British Standards Institution, 2018, “BS ISO 31000:2018”).

Scope, Context and Criteria

The purpose of determining scope, context and criteria is to customize the risk management process, allowing effective risk assessment and appropriate risk treatment (British Standards Institution, 2018, “BS ISO 31000:2018”). Scope, context and criteria involve determining the scope of the process and understanding the external and internal context (British Standards Institution, 2018, “BS ISO 31000:2018”).

Risk Identification

The purpose of risk identification is to identify, recognize and describe risks that might help or hinder an organization achieving its objectives (British Standards Institution, 2018, “BS ISO 31000:2018”).

Risk Analysis

The purpose of risk analysis is to comprehend the nature of risk and its characteristics including, where appropriate, the level of risk (British Standards Institution, 2018, “BS ISO 31000:2018”). Analysis techniques can be qualitative, quantitative or a combination of these, depending on the circumstances and intended use (British Standards Institution, 2018, “BS ISO 31000:2018”).

Risk Evaluation

The purpose of risk evaluation is to support decisions (British Standards Institution, 2018, “BS ISO 31000:2018”). Risk evaluation involves comparing the results of the risk analysis with the established risk criteria to determine where additional action is required (British Standards Institution, 2018, “BS ISO 31000:2018”).

Risk Treatment

The purpose of risk treatment is to choose and implement options for addressing risk (British Standards Institution, 2018, “BS ISO 31000:2018”). Risk treatment options should be chosen based on the organization’s objectives, risk criteria and available resources (British Standards Institution, 2018, “BS ISO 31000:2018”).

Methodology

This research uses systematic steps which are listed in Fig. 1.

Fig 1. Research methodology.

This research was conducted using a qualitative case study. This research methodology starts from problem identification is carried out to identify problems that can hinder PLN UIP JBT in completing the target of developing electricity infrastructure projects on time, with the right quality and at the right cost. Literature review was conducted to find supporting theories that can be used as references.

The primary data collection method was conducted through participant observation at PLN UIP JBT and discussions with experts at PLN UIP JBT from 5 Departments (Department of Planning, Department of Licensing, Land, and Communication, Department of Construction Operations I, Department of Construction Operations II, and Department of Finance, Budget, and General Affair) and 3 Sub-Departments (Sub-Department of Procurement Planner, Sub-Department of Procurement Executor, and Sub-Department of Occupational Safety, Health, Environment, and Security) for external environment analysis, internal organization analysis, and risk management process. Meanwhile, the secondary data collection method was conducted by studying internal data and reports, internal and external regulations, books, journals and data from the internet.

The data analysis method uses a strategic management process that includes external environment analysis (general environment analysis) to obtain external context, and internal organization analysis (resources analysis, and activity system map) to obtain internal context and scope. Furthermore, the data analysis method uses a risk management process that includes scope, context, criteria, risk identification, risk analysis, risk evaluation, and risk treatment.

Results and Discussion of Findings

External Environment Analysis

The external environment analysis of PLN UIP JBT is conducted using general environment analysis to highlight external conditions that influence long-term success. The general environment analysis of PLN UIP JBT is structured based on seven macro-environmental segments as follows:

1. Demographic:

• The electrification ratio in Indonesia was 99.83% in 2024 (pln.co.id, 2025).

• The number of PLN electricity customers in Indonesia is 92.88 million customers, consisting of 43% household customers, 30% industrial customers, 19% business customers and 8% other customers (pln.co.id, 2025).

2. Economic:

• Global growth is expected to be 3.3% in 2025 and 2026, lower than the 2000–2019 average of 3.7% (imf.org, 2025).

• Global headline inflation is projected to decrease to 4.2% in 2025 and 3.5% in 2026, Advanced economies are predicted to return to goal sooner than emerging and developing economies (imf.org, 2025).

• The exchange rate of the rupiah will range between IDR 16,531 to IDR 19,426 per US dollar throughout 2025–2029, with fluctuations influenced by global economic conditions and monetary policies (longforecast.com, 2025).

• Indonesia’s inflation is estimated to be maintained at around 2.5%, and the Indonesian economy is projected to grow by 5.2% in 2025. (Ministry of Finance of the Republic of Indonesia, 2024).

• Indonesia’s GDP in 2024 has already surpassed IDR 22,139 trillion (Badan Pusat Statistik, 2025).

• The emergence of Additional Consumer High Voltage Demand which can significantly increase electricity sales and PLN business development (PT PLN (Persero), 2025a).

3. Political Legal:

• Presidential Regulation No. 112 of 2022 on the Acceleration of Renewable Energy Development for Electricity Supply aims to accelerate the development of power plants from renewable energy sources to achieve national energy mix targets and reduce greenhouse gas emissions (PT PLN (Persero), 2024). The Indonesian Government’s commitment to achieve Nationally Determined Contribution (NDC) by 2030 and Net Zero Emissions by 2060 (PT PLN (Persero), 2025a).

• The government regulates and supervises electricity provision by PLN, including setting reasonable tariff limits and determining PLN’s revenue model to ensure affordable electricity prices for the public (PT PLN (Persero), 2024). PLN’s profit margin has been set at 7% according to the letter from the Head of the Fiscal Policy Agency of the Ministry of Finance No. S-59/KF/2013 dated June 4, 2013, regarding PT PLN (Persero)’s Business Margin (PT PLN (Persero), 2024).

• Regulations related to electricity subsidies and compensation, where subsidies and compensation are government policies to control the prices of goods in society, including PLN’s electricity purchase prices. According to the Minister of Finance Regulation No. 178/PMK.02/2021, subsidies are provided to customers with tariff categories whose average electricity rates are lower than the basic cost of electricity supply (PT PLN (Persero), 2024).

• Government policies related to the Domestic Content Level, which regulate the minimum percentage of local components or added value in a product or service in Indonesia. One of the regulations related to the Domestic Content Level is the Minister of Industry Regulation No. 05/M-IND/PER/2/2017. The implementation of the Domestic Content Level in PLN’s procurement of goods and services is carried out at all stages, from planning to handover (PT PLN (Persero), 2024).

• The government has issued regulations related to PV (Photovoltaic) Rooftop to achieve energy mix targets through the Minister of Energy and Mineral Resources Regulation No. 26 of 2021 on Rooftop Solar Power Plants Connected to the Electricity Network of Public Electricity Supply Business License Holders (PT PLN (Persero), 2024).

• Regulations related to EV (Electric Vehicle) continue to evolve along with the growth of the electric vehicle market and changes in environmental policies worldwide, including in Indonesia (PT PLN (Persero), 2024). The government issued Presidential Regulation No. 55 of 2019 on the Acceleration of the Battery Electric Vehicle Program for Road Transportation, which presents an opportunity for PLN to prepare infrastructure to support EV growth (PT PLN (Persero), 2024).

• The government has issued policies related to the shared use of electricity networks through the Minister of Energy and Mineral Resources Regulation No. 11 of 2021 on the Implementation of Electricity Business (PT PLN (Persero), 2024). The shared use of electricity networks allows for the direct transfer of electricity from power plants developed by independent power producers (IPPs) to companies (customers) using PLN’s electricity network (PT PLN (Persero), 2024).

• The Government’s policy to increase the added value of minerals by downstreaming through export restrictions and the opening of Special Economic Zones/Industrial Zones, indirectly has an impact on increasing the number of new requests (additional demand) for electricity supply outside the Electricity Supply Business Plan significantly (PT PLN (Persero), 2025a). On the other hand, the grid’s reserve capacity in several areas is not yet sufficient to accommodate the additional demand (PT PLN (Persero), 2025a).

• The issuance of the PLN Electricity Supply Business Plan 2025–2034 in accordance with the decree of the Minister of Energy and Mineral Resources No. 188.K/TL.03/MEM.L/2025 as the main guideline in the development of the national electricity infrastructure to encourage a clean energy mix and sustainability of the energy sector (PT PLN (Persero), 2025b).

• Each government agency has different licensing regulations and requires a long permit issuance process in the development of electricity infrastructure (PT PLN (Persero) UIP JBT, 2024).

4. Sociocultural:

• Changes in lifestyle, with society increasingly prioritizing convenience and comfort in both indoor and outdoor activities (PT PLN (Persero), 2024).

• Increased public awareness of environmental issues, particularly related to global warming, which is a significant social factor that can influence market dynamics and the business needs of organizations, including PLN (PT PLN (Persero), 2024).

• Shifts in societal and investor perspectives, emphasizing sustainability to analyze a company’s success in managing risks using the ESG (Environmental, Social, and Governance) framework. ESG ratings provide insights into how well a company manages environmental, social, and governance risks and how these factors can impact the company’s long-term performance (PT PLN (Persero), 2024).

• Growing public awareness of gender equality issues, ensuring equal rights for men and women (PT PLN (Persero), 2024).

• Residents’ rejection of land acquisition for electricity infrastructure projects, results of the Public Appraisal Services Office’s assessment, Right of Way routes and transmission lines (PT PLN (Persero) UIP JBT, 2024).

5. Technological:

• The trend towards the electrification of energy resources, particularly in the transportation and industrial sectors, to replace limited fossil resources such as oil, gas, and coal (PT PLN (Persero), 2024).

• The expanding trends of decentralization, digitalization, and decarbonization (3D), driven by technologies such as renewable energy power plants, energy storage, nuclear power, electric vehicles, smart grids, hydrogen and ammonia, and carbon capture technology (PT PLN (Persero), 2024).

• The emergence of startups specifically developing revolutionary technologies to achieve clean energy, supported by major investors (PT PLN (Persero), 2024). Examples include airborne power plants, nuclear fusion reactors, space-based solar power, and wireless electricity transmission (PT PLN (Persero), 2024).

6. Global:

• International Cooperation in form of investment and technology transfer through international cooperation will play a crucial role in the development of Indonesia’s electricity sector (PT PLN (Persero), 2024). Programs such as the Just Energy Transition Partnership (JETP), established during the G20 Leaders’ Summit in 2022, further signify Indonesia’s commitment to delivering a just transition for the power sector (PT PLN (Persero), 2024). The JETP program emphasizes a fair and sustainable economic transition from high carbon to low carbon for all societal layers (PT PLN (Persero), 2024).

• International environmental policies such as commitments to carbon emission reductions and climate agreements, will influence Indonesia’s energy policies (PT PLN (Persero), 2024). Indonesia is committed to reducing carbon emissions and increasing the use of renewable energy as part of global efforts to address climate change (PT PLN (Persero), 2024).

• Technological advancements in renewable energy worldwide, such as increased efficiency of solar panels and wind turbines, will drive the adoption of these technologies in Indonesia (PT PLN (Persero), 2024). The decreasing costs of these technologies also make investments in renewable energy more attractive (PT PLN (Persero), 2024).

7. Sustainable Physical:

• The risk of climate change due to increased greenhouse gases and the commitment to achieving Net Zero Emission (NZE) (PT PLN (Persero), 2024).

• The demand for creating a safer work environment (Zero Accident) that is also mother and child-friendly, implementing environmentally friendly business models to adhere to the 3P principles (profit, people, and planet), and maintaining work-life balance (PT PLN (Persero), 2024).

• Environmental management to preserve ecosystems and ensure water availability for surrounding areas, particularly for hydroelectric power plants (PT PLN (Persero), 2024).

• The demand for waste management to address the impact of electricity production and the disposal of unused assets, which can be managed according to the 3R principles (Reduce, Reuse, Recycle) (PT PLN (Persero), 2024).

• Lender regulations regarding social and environmental issues are different from the regulations in Indonesia and are very strict, thus requiring more effort to comply with lender regulations in the development of electricity infrastructure projects, for example the World Bank’s Environmental and Social Standards (ESS) (PT PLN (Persero) UIP JBT, 2024).

Internal Organization Analysis

An internal organization analysis of PLN UIP JBT was conducted using several methods that are resources analysis and activity system map. Internal organization analysis is needed to determine the current internal conditions of PLN UIP JBT. PLN UIP JBT has resources, both tangible and intangible. PLN UIP JBT’s tangible resources are analyzed in the categories of financial, organizational, physical and technological resources with the details in Table I.

Table I. Tangible Resources Analysis of PLN UIP JBT

No.	Category	Description
1	Financial resources	- PLN UIP JBT has internal funding from PLN and external funding from loan. The budget for investment projects is limited and budget submission requires several documents that must be fulfilled by PLN UIP JBT.
2	Organizational resources	- PLN UIP JBT has organizational structure that contains a network of interrelated Departments, Sub-Departments, Implementation Units, Sectors, and Sections.
		- PLN UIP JBT has a well-defined formal reporting structure that includes hierarchical roles such as General Manager, Senior Manager, Manager, Assistant Manager, Team Leader, Specialist, Senior Officer, Officer, and Technician.
3	Physical resources	- PLN UIP JBT has one main unit office located in Bandung City, serving as the central hub for coordination and administration.
		- PLN UIP JBT has four project implementation unit offices in West Bandung Regency, Bandung City, Cirebon City and Semarang City to support the execution of electricity infrastructure projects.
		- PLN UIP JBT has operational vehicles to facilitate mobility and logistical support.
4	Technological resources	- PLN UIP JBT has hardware, specialized software and applications developed by PLN.

PLN UIP JBT’s intangible resources are analyzed in the categories of human, innovation and reputational resources with the details in Table II.

Table II. Intangible Resources Analysis of PLN UIP JBT

No.	Category	Description
1	Human resources	- PLN UIP JBT has employees who are mostly young (≤40 years).
		- PLN UIP JBT has employees with technical and non-technical knowledge, skills and experience in management of electricity infrastructure development projects (power plants, transmission, substation).
		- PLN UIP JBT has employee competency gap with technological advances in electricity infrastructure development in the fields of renewable energy, transmission and substation.
		- PLN UIP JBT has corporate value AKHLAK (Amanah/Trustworthy, Kompeten/Competent, Harmonious, Loyal, Adaptive, Kolaboratif/Collaborative).
		- PLN UIP JBT has cultural programs including Safety Culture, Elimination of Waste, Wellbeing and Next Process is Our Costumer.
		- PLN UIP JBT is supported by internal and external educational and training programs.
2	Innovation resources	- PLN UIP JBT carries out knowledge management including knowledge sharing, knowledge capturing and community of practice.
		- PLN UIP JBT has Integrated Management System document.
		- The culture of digitalization and innovation is still lacking.
3	Reputational resources	- PLN UIP JBT has a reputation as a state-owned enterprise in Indonesia.

The next stage is to create PLN UIP JBT’s activity system map includes a number of interconnected procedures that are essential to the effective and efficient implementation and completion of projects. The activity system map for PLN UIP JBT is as in Fig. 2.

Fig. 2. Activity system map of PLN UIP JBT.

From the PLN UIP JBT activity system map, 15 essential activities were identified for the implementation and completion of the electricity infrastructure project. The green circle represents the most prominent operations carried out at PLN UIP JBT, which are most responsible for creating value or generating large expenditures. The lines suggest fit where both activities influence one other, therefore a skewed grid of lines is beneficial for strategy. This organized connection helps PLN UIP JBT meet its goals of timely, cost-effective, and high-quality project delivery. The activity system map of PLN UIP JBT serves a strategic tool for identifying and improving the alignment, or “fit,” between distinct organizational activities. The map allows management to determine if the performance of one activity influences or is influenced by the performance of others by showing how each process interacts. This interconnection serves as a platform for developing ideas to increase coordination and operational synergy.

Scope, Context and Criteria

Scope and context involve defining the scope of objectives, processes, external and internal context. The scope of objectives of PLN UIP JBT is “Organizing the construction of power plant and transmission that are effective, efficient, cost, quality and time appropriate in order to support the development of electricity in the Java, Madura, Bali Regional areas so that it can become a benchmarking center for PLN UIP throughout Indonesia” (PT PLN (Persero) UIP JBT, 2024).

The scope of processes at PLN UIP JBT has been identified through the development of its activity system map that there are 15 essential activities for the implementation and completion of the electricity infrastructure project. The external context of PLN UIP JBT has been defined through external environmental analysis, while the internal context of PLN UIP JBT has been determined through internal organizational analysis.

The likelihood level criteria and impact level criteria in risk management are very important because they help analyze risks effectively. The likelihood level criteria help to understand how likely a risk is to occur. The impact level criteria help to understand how big an impact or consequence a risk will have if it occurs. The likelihood level criteria and impact level criteria used by PLN UIP JBT in this research are in Tables III and IV.

Table III. Likelihood Level Criteria of PLN UIP JBT

Level of likelihood		Probability	Qualitative description
E	Almost certain	>80%–100%	Almost certain to happen
D	Likely	>60%–80%	Most likely to happen
C	Possible	>40%–60%	Equally likely to happen and not happen
B	Unlikely	>20%–40%	Less likely to happen
A	Rare	0%–20%	Almost certain not to happen

Table IV. Impact Level Criteria of PLN UIP JBT

No.	Level of impact	Not significant	Minor	Medium	Significant	Very significant
1	Internal Business Process:
	a. Occupational safety and health/life safety	Not tolerated
	b. Operational performance achievement	Deviation from target: <0.5%	Deviation from target: 0.5%–2.5%	Deviation from target: 2.5%–5%	Deviation from target: 5%–10%	Deviation from target: >10%
2	Finance & Markets
	Opportunity profit/loss	<0.1% of the company’s annual revenue	0.1%–0.5% of the company’s annual revenue	0.5%–1% of the company’s annual revenue	1%–2% of the company’s revenue per year	>2% of the company’s annual revenue

Risk Identification

Risk identification is to find, recognize and describe risks that might help or prohibit an organization from achieving its objectives. To achieve organizational goals, the company must carry out a series of essential business activities or processes as depicted in the PLN UIP JBT activity system map, each of which carries its own unique set of risks. Considering PLN UIP JBT’s scope of objective, scope of process, external context and internal context, 16 risks were identified, consisting of 15 negative risks and one positive risk. Risk identification of PLN UIP JBT is as in Table V.

Table V. Risk Identification of PLN UIP JBT

No.	Activity/Process	Risk	Cause	Impact
1	Settlement of budget submission determination.	Unsustainable budget or funding availability.	Internal Cause: 1) Budget proposal requirements from PLN UIP JBT are incomplete. 2) The amount of the proposed budget from PLN UIP JBT is not in accordance. 3) Fulfillment of lender requirements are incomplete. External Cause: 4) Termination of funding from lender. 5) PLN budget is insufficient. 6) National and global economic conditions.	1b. Operational performance achievement: Target availability of work budget or funding was not achieved.
2	Completion of survey, civil and electromechanical design.	Delay in drawing approval.	Internal Cause: 1) Limited PLN engineer personnel. 2) Lack of experience of PLN engineers in data collection until approval drawing is issued. External Cause: 3) Changes in field conditions or extreme field conditions. 4) Lack of data for foundation class approval. 5) Differences in interpretation between PLN and contractors. 6) Limited number or competence of contractor engineers.	1b. Operational performance achievement: Target of project contractual implementation percentage was not achieved.
3	Procurement planning and execution.	Procurement failed.	Internal Cause: 1) Short tender announcement broadcast time. 2) From the evaluation results, no participants meet the requirements or the number who passed does not meet the requirements according to PLN Board of Directors regulation. 3) The negotiation process carried out did not reach an agreement. 4) There was a change in the work plan and resulted in a change in the need for goods/services. 5) The user of goods/services canceled the procurement process. 6) Budget is not available/insufficient.	1b. Operational performance achievement: Target of investment cash budget absorption of 95%–100% was not achieved.
			External Cause: 7) Participants are not careful or understand the requirements in the work plan and requirements. 8) No participants participated in the tender, or the number of participants is less than that required in the PLN Board of Directors regulation. 9) There is an objection from the auction participant which is stated to be correct by the Manager of Procurement Executor and/or an appeal objection is stated to be correct by the user of goods/services.
			10) There has been no determination of the reference price for transmission materials from the related agencies.
4	Completion of spatial planning, environmental and location determination permits, etc.	Licensing requirements are not completed on time.	Internal Cause: 1) Lack of permit requirements. 2) Coordination with stakeholders takes time and money. External Cause: 3) Related stakeholders are less cooperative.	1b. Operational performance achievement: Target of licensing was not achieved.
5	Land acquisition.	Residents’ rejection of land acquisition for project.	Internal Cause: 1) Lack of socialization to the community. External Cause: 2) Landowners’ expectations for compensation values that are too high beyond reason. 3) The results of the measurement of the land to be acquired do not match the expectations of the landowners. 4) Lack of understanding and excessive concern of residents regarding the effects of radiation on electricity infrastructure.	1b. Operational performance achievement: Target of land acquisition was not achieved.
6	Completion of legal documents for land assets.	Legal document requirements for land assets were not completed on time.	Internal Cause: 1) Lack of legal document application requirements for PLN land assets. 2) It takes a lot of time and money to coordinate with stakeholders. 3) Land acquisition stakes are not permanent or lost during construction. External Cause: 4) Related stakeholders are less cooperative.	1b. Operational performance achievement: Target of land certification or legal asset document was not achieved.
7	Occupational health and safety compliance.	Implementation of work supervision does not meet occupational safety and health requirements.	Internal Cause: 1) Lack of supervision and periodic evaluation of occupational safety and health supervision by contractors. 2) Lack of education to occupational safety and health supervisors regarding occupational safety and health provisions that need to be supervised. External Cause: 3) Inadequate occupational safety and health supporting work equipment for contractors. 4) Contractors do not comply with occupational safety and health management system.	1a. Occupational safety and health/life safety: Not Tolerated.
8	Completion of logistics and customs.	Delay in arrival of materials.	Internal Cause: 1) Equipment non-conformity with required specifications. 2) Delay in submission or revision of design review approval. External Cause: 3) Project location access constraints. 4) Letter of Credit (L/C) has not been issued. 5) Delay in vendor/sub-contractor approval by PLN if there is a proposed change to the vendor list 6) Natural conditions/weather. 7) Disruption to the transportation process both offshore and onshore. 8) Lack of information regarding the process of arrival of materials from abroad. 9) The main transmission material contract has not been implemented at the PLN head office.	1b. Operational performance achievement: Target of project contractual implementation percentage was not achieved.
9	Completion of project supervision.	Deviation of project progress that has an investment cash budget and an investment budget.	Internal Cause: 1) Verification of payment minutes document takes a long time. 2) Payment minutes document is incomplete. External Cause: 3) Contractor performance is less than optimal.	1b. Operational performance achievement: Target of project contractual implementation percentage was not achieved.
10	Completion of contractual execution.	Long duration of settlement of construction and variation claims.	Internal Cause: 1) Evidence of claims and variations submitted by the contractor is incomplete and invalid 2) There is no price reference set out in the contract for claims and variations External Cause: 3) Availability of supporting evidence from third parties.	1b. Operational performance achievement: Target of project contractual implementation percentage was not achieved.
11	Completion of commissioning certificate.	Delay in issuing project commissioning certification.	Internal Cause: 1) Required documents have not been completely fulfilled. 2) Lack of monitoring and coordination with related parties. External Cause: 3) The contractor has not completed the pending item of commissioning certification.	1b. Operational performance achievement: Target for increasing power plant, transmission and substations capacity was not achieved.
12	Completion of handover of business operations.	Delay in the process of documenting the handover of business operations.	Internal Cause: 1) The documents for compiling the minutes of the handover of business operations are incomplete. External Cause: 2) The inventory process requires schedule adjustments with PLN UIT JBT (Unit Induk Pembangunan Jawa Bagian Tengah/Main Transmission Unit of Central Java Section). 3) There are pending items that need to be agreed between PLN UIP JBT and PLN UIT JBT.	1b. Operational performance achievement: Target of handover of business operations was not achieved.
13	Settlement of work in progress to fix asset.	Delay in the settlement process of work in progress to become a fixed asset.	Internal Cause: 1) There is no standard regarding the delivery of commissioning certification information from the project operation handover team to the project asset handover team. 2) The settlement process from work in progress to fixed asset is still manual in determining the value of asset items attached to the physical inventory of assets. 3) There is an error in the value of the settlement of work in progress to fixed assets. External Cause: 4) There is an asset freeze period in the SAP (System Application and Product).	1b. Operational performance achievement: Target of settlement of work in progress to fixed asset was not achieved.
14	Completion of project handover.	Delay in completion of project handover.	Internal Cause: 1) Documents required for project handover are not available. 2) Land certification has not been completed. 3) Pending items that appear after operations. 4) There is land whose grant or borrowing process has not been completed administratively. External Cause: 5) Pending items have not been completed by the contractor. 6) Project handover pending items from PLN Business Unit (UIT JBT/UIP2B Jamali (Unit Induk Pusat Pengatur Beban Jawa, Madura, Bali/Load Control Center Main Unit of Java, Madura, Bali)/UID Jabar (Unit Induk Distribusi Jawa Barat/Main Distribution Unit of West Java)/UID Jateng & DIY (Unit Induk Distribusi Jawa Tengah & Daerah Istimewa Yogyakarta/Main Distribution Unit of Central Java & Special Region of Yogyakarta)/PLN Indonesia Power/PLN Nusantara Power) that do not comply with the scope of the contract.	1b. Operational performance achievement: Target of project handover was not achieved
15	Budget absorption.	Investment cash budget absorption planning is not accurate.	Internal Cause: 1) Lack of accuracy when inputting budget values. 2) Users are too optimistic in determining payment plans. External Cause: 3) Lack of coordination when determining budget needs. 4) Budget recomposition process through several stages (divisions). 5) Invoice verification process through the Treasury Division and the Java, Madura, Bali, Maluku, Papua, and Nusa Tenggara Construction Division of PLN Head Office takes a long time or is late. 6) Contractors are less careful in completing invoice document requirements.	1b. Operational performance achievement: Target of investment cash budget absorption of 95%–100% was not achieved.
16		Optimizing the utilization of property assets to support increasing of beyond kWh income (Positive Risk).	Internal Cause: 1) PLN UIP JBT manages unutilized land and building assets and some are in damaged condition. 2) Marketing of asset utilization is not optimal. 3) Regulations related to asset utilization in PLN environment. External Cause: 4) Strategic asset location. 5) Market potential in the land and building asset environment. 6) Rental price of land and/or building assets that have economic value.	2. Opportunity profit/loss: Increase beyond kWh income.

Risk Analysis and Risk Evaluation

Risk analysis is inherently used to determine the level of possibility, level of impact and level of risk of PLN UIP JBT before risk treatment is carried out. Risk evaluation entails comparing the results of the risk analysis to the established risk criteria to determine where further action is needed. The risk analysis and risk evaluation of PLN UIP JBT are as in Table VI. Risk analysis of PLN UIP JBT reveals a total of 16 risks which are categorized by their severity levels. There are 4 extreme risks, 8 very high risks, 3 high risks, and 1 low risk. PLN JBT UIP risks that need the most attention are extreme risks, followed by very high risks, high risks, and low risk. Risk map of PLN UIP JBT is as in Fig. 3.

Table VI. Risk Analysis and Risk Evaluation of PLN UIP JBT

No.	Risk	Likelihood level	Impact level	Risk level	Risk evaluation (Transfer, Terminate, Tolerate, Treat)
1	Unsustainable budget or funding availability.	Likely	Very significant	Extreme	Treat
2	Delay in drawing approval.	Likely	Very significant	Extreme	Treat
3	Procurement failed.	Likely	Significant	Very high	Treat
4	Licensing requirements are not completed on time.	Likely	Significant	Very high	Treat
5	Residents’ rejection of land acquisition for project.	Likely	Significant	Very high	Treat
6	Legal document requirements for land assets were not completed on time.	Likely	Significant	Very high	Treat
7	Implementation of work supervision does not meet occupational safety and health requirements.	Likely	Very significant	Extreme	Treat
8	Delay in arrival of materials.	Likely	Significant	Very high	Treat
9	Deviation of project progress that has an investment cash budget and an investment budget.	Likely	Very significant	Extreme	Treat
10	Long duration of settlement of construction and variation claims.	Likely	Significant	Very high	Treat
11	Delay in issuing project commissioning certification.	Likely	Significant	Very high	Treat
12	Delay in the process of documenting the handover of business operations.	Possible	Significant	High	Treat
13	Delay in the settlement process of work in progress to become a fixed asset.	Possible	Significant	High	Treat
14	Delay in completion of project handover.	Possible	Significant	High	Treat
15	Investment cash budget absorption planning is not accurate.	Likely	Significant	Very high	Treat
16	Optimizing the utilization of property assets to support increasing of beyond kWh income (Positive Risk).	Rare	Not significant	Low	Treat

Fig. 3. Risk map of PLN UIP JBT.

Description of risk level: Green (Low), Blue (Moderate), Yellow (High), Orange (Very High), Red (Extreme).

Risk Treatment

Based on risk identification, risk analysis and risk evaluation of PLN UIP JBT underscore the importance of implementing comprehensive risk treatment strategies aimed at mitigating the likelihood and impact of negative risks while enhancing the likelihood and impact of positive risk to support the successful execution of PLN UIP JBT’s objectives. Risk treatments or mitigations for PLN UIP JBT are formulated to complete the target of electricity infrastructure project development on time, with the right quality, and at the right cost. Risk treatment of PLN UIP JBT is as in Table VII.

Table VII. Risk Treatment of PLN UIP JBT

No.	Risk	Risk treatment
1	Unsustainable budget or funding availability.	Strategic coordination with relevant stakeholders and thorough fulfilment of both internal and lender documentation requirements. These efforts aim to ensure timely and adequate financial support for project implementation.
2	Delay in drawing approval.	Combination of technical coordination, workload management, and digital monitoring. Key measures include conducting joint surveys, verifying topographic and soil data, and utilizing the IPRO application for document validation. Regular coordination meetings, targeted training, and escalation procedures such as warning letters and high-level meetings are also employed to ensure timely approval and maintain project schedules.
3	Procurement failed.	Structured and technology-driven approach. Key strategies include the development of optimized procurement schedules, the use of e-procurement platforms, and the integration of digital tools such as the E-BID DOC (Electronic Bidding Document) application. Regular coordination with relevant units, continuous market research, and the establishment of clear procurement procedures help ensure transparency and efficiency. Additionally, escalation mechanisms, re-auction processes, and direct appointments are employed in accordance with internal regulations to address procurement challenges and maintain project timelines.
4	Licensing requirements are not completed on time.	Combination of administrative preparedness, stakeholder engagement, and strategic collaboration. The company emphasizes early preparation, budget alignment, and coordination with relevant authorities, supported by Corporate Social Responsibility (CSR) initiatives and escalation mechanisms.
5	Residents’ rejection of land acquisition for project.	Conducting of socialization efforts, legal support, persuasive communication, and formal agreements to build trust and facilitate negotiations.
6	Legal document requirements for land assets were not completed on time.	Structured certification processes, technical verification, and inter-agency cooperation, ensuring timely and compliant land asset management.
7	Implementation of work supervision does not meet occupational safety and health requirements.	Comprehensive framework of planning, monitoring, and enforcement. This includes the development of occupational safety and health supervision and training plans, routine field inspections, and the use of digital tools such as the INSPEKTA (Inspection Technology) application for reporting. Regular evaluation meetings with contractors and project units ensure compliance, while corrective actions such as issuing and following up on formal warnings are enforced to address violations and promote a culture of safety.
8	Delay in arrival of materials.	Enhanced coordination with vendors and contractors, supervision during Factory Acceptance Tests (FAT), and logistical planning, including contingency measures and contract amendments.
9	Deviation of project progress that has an investment cash budget and an investment budget.	Using digital tools like the SIDITA (Sistem Digital Tagihan/Digital Billing System) application, regular monitoring, and escalation procedures such as Show Cause Meetings.
10	Long duration of settlement of construction and variation claims.	Strict supervision and collaborative data validation.
11	Delay in issuing project commissioning certification.	Document checklists, use of the Certification Management Platform (CMP), and stakeholder coordination.
12	Delay in the process of documenting the handover of business operations.	Proactive measures such as regular monitoring, structured interdepartmental coordination, and thorough evaluation of delay causes.
13	Delay in the settlement process of work in progress to become a fixed asset.	Interdepartmental coordination, accurate documentation, and alignment with SAP asset freeze periods.
14	Delay in completion of project handover.	Structured contracts, periodic evaluations, and escalation to higher management. These measures collectively support timely project delivery and asset management.
15	Investment cash budget absorption planning is not accurate.	Systematic financial oversight and coordination. This includes the use of the FIX (Financial Integration and eXecution) application for monthly budget verification, weekly monitoring, and regular budget review meetings. Additional measures involve reconciling outstanding payment plans, coordinating revisions with relevant divisions, and ensuring the completeness of billing documentation. These efforts aim to enhance budget accuracy and financial efficiency.
16	Optimizing the utilization of property assets to support increasing of beyond kWh income (Positive Risk).	Asset mapping, revitalization, and strategic marketing. PLN UIP JBT leverages regulatory frameworks, digital platforms like GASPRO (Geospasial Aset Properti/Geospatial Property Asset), and appraisal-based pricing to enhance asset attractiveness and competitiveness. These initiatives support revenue diversification and improved asset management.

Conclusions and Recommendations

Through improvement of risk management implementation of PLN UIP JBT, this study concludes that PLN UIP JBT faces 16 risks consisting of 15 negative risks and 1 positive risk in achieving the long-term target of completing electricity infrastructure projects (power plant, transmission and substation) on time, with the right quality and at the right cost. The identified risks of PLN UIP JBT are risks related to budgeting, project design, procurement, licensing, land acquisition, legal, occupational health and safety, material, project completion time, contract, project handover, project payment and other income. The risk treatments or mitigations for PLN UIP JBT are stakeholder coordination, regulatory compliance, cooperation, collaboration with related parties, and digitalization.

Recommendations for further research to improve the quality of research are to conduct research related to improvement of risk management implementation to achieve long-term goals of electricity infrastructure project development company using more primary data collection from top management perspective and quantitative methods. Top management involvement in data collection will enrich the accuracy of external environment analysis, internal organization analysis, risk identification, risk analysis, risk evaluation, and risk treatment. Quantitative methods can be applied to determine the level of risk likelihood and the level of risk impact.

Limititations of the Study

Regulations and policies are subject to change, this could affect the relevance of the results of external environment analysis, internal organization analysis, risk identification, risk analysis, risk evaluation, and risk treatment over time.

Conflict of Interest

Conflict of Interest: Authors declare that they do not have any conflict of interest.