Financing Model for Construction and Demolition Waste in Indonesia

Fajar Susilowati; Jalu Aji Prakoso; Arrizka Yanuar Adipradana

doi:10.5614/j.eng.technol.sci.2025.57.4.6

Financing Model for Construction and Demolition Waste in Indonesia

Published: 2025-01-01 | DOI: 10.5614/j.eng.technol.sci.2025.57.4.6 | Vol 57, Issue 4 (2025) | Cited by: 1

Authors

Fajar Susilowati

Civil Engineering, Faculty of Engineering, Tidar University, Jalan Kapten Suparman No. 39 Potrobangsan, Magelang 56116, Central Java

ORCID: 0000-0002-1762-9791 · OpenAlex: A5031493696

Jalu Aji Prakoso

Faculty of Economic, Tidar University, Jalan Kapten Suparman No. 39 Potrobangsan, Magelang 56116, Central Java,

ORCID: 0000-0003-2519-0472 · OpenAlex: A5010008811

Arrizka Yanuar Adipradana

Civil Engineering, Faculty of Engineering, Tidar University, Jalan Kapten Suparman No. 39 Potrobangsan, Magelang 56116, Central Java

ORCID: 0000-0002-8331-4640 · OpenAlex: A5016160423

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Abstract

Construction waste poses a significant environmental and economic challenge in Indonesia’s rapidly expanding construction sector. This research develops a financing model for managing construction waste throughout the project life cycle, emphasizing the integration of cost components and waste management strategies. Data were collected through surveys, structured interviews, and observations from 80 construction projects across Indonesia. The analysis revealed that while reinforcement, bricks, and split stone have high recycling potential, actual reuse remains limited due to poor planning and insufficient infrastructure. Seven financing components were identified: material loss, production/management, sorting, collection, transportation, recycling, and dumping. Notably, material loss accounts for the largest cost share—up to 10% of project value—while recycling and dumping costs are underfunded at 0.01%–0.5%. A cost-based model was developed to simulate waste-related expenses, ranging from 0.39% to 20.5% of overall project costs. The research also highlights the design stage as a critical leverage point for maximizing waste reduction. By aligning financial planning with life cycle stages, this research provides practical guidance for stakeholders and supports Indonesia’s transition to a circular construction economy through better budgeting, policy development, and waste strategy implementation.

Keywords

circular construction; construction waste; financing model; Indonesia; project life cycle

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Research Intelligence

Data from OpenAlex ↗

Metrics

Citations

0.43

FWCIfield-weighted

61th

Percentilevs same year + field

Article

Work type

GOLD

Open Access

Topics

Recycled Aggregate Concrete Performance Primary

0.95

Building and Construction › Engineering › Physical Sciences

Construction Project Management and Performance

0.90

Related Research

Citation Trend

2026

Citation Timeline

Year	Citations
2026	1

Semantic Profile AI-classified research signals

Core Domains

Demolition 0.78

level 2

Waste management 0.56

level 1

Business 0.45

level 0

Secondary Topics

Environmental science 0.43 Civil engineering 0.41 Engineering 0.34 Environmental planning 0.33 Environmental engineering 0.33 Forensic engineering 0.32

Institution Network

Universitas Tidar ID
Fajar Susilowati · Jalu Aji Prakoso · Arrizka Yanuar Adipradana

References

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Jaques, R., 2000. Construction Site Waste Generation—The Influence of Design and Procurement. Archit. Sci. Rev. 43, 141–145. https://doi.org/10.1080/00038628.2000.9696897 DOI: 10.1080/00038628.2000.9696897
Laovisutthichai, V., Lu, W., Bao, Z., 2022. Design for Construction Waste Minimization: Guidelines and Practice. Archit. Eng. Des. Manag. 18, 279–298. https://doi.org/10.1080/17452007.2020.1862043 DOI: 10.1080/17452007.2020.1862043
Ma, M., Tam, V.W.Y., Le, K.N., Li, W., 2020. Challenges in current construction and demolition waste recycling: A China study. Waste Manag. 118, 610–625. https://doi.org/10.1016/j.wasman.2020.09.030 DOI: 10.1016/j.wasman.2020.09.030
Minunno, R., O’Grady, T., Morrison, G.M., Gruner, R.L., Colling, M., 2018. Strategies for applying the circular economy to prefabricated buildings. Buildings 8. https://doi.org/10.3390/buildings8090125 DOI: 10.3390/buildings8090125
Osmani, M., Glass, J., Price, A.D.F., 2008. An Investigation of Design Waste Causes in Construction, in: WIT Transactions on Ecology and the Environment. WITPress, pp. 491–498. https://doi.org/10.2495/WM080501 DOI: 10.2495/wm080501
Othman, A.A.E., Elsawaf, L.A., 2021. Design Out Waste Framework for Achieving Sustainability in Public Housing Projects in Egypt. WSEAS Trans. Environ. Dev. 17, 222–231. https://doi.org/10.37394/232015.2021.17.22 DOI: 10.37394/232015.2021.17.22
Rady, M., Mahfouz, S.Y., Taher, S.E.-D.F., 2022. Optimal Design of Reinforced Concrete Materials in Construction. Materials 15. https://doi.org/10.3390/ma15072625 DOI: 10.3390/ma15072625
Rivera-Tenorio, M., Moya, R., 2020. Potential for pellet manufacturing with wood waste from construction in Costa Rica. Waste Manag. Res. 38, 886–895. https://doi.org/10.1177/0734242X19893022 DOI: 10.1177/0734242x19893022
Sembiring, F.T., 2018. Study of Recycling Demolition Waste Material Product in Jakarta, Indonesia, in: ICSoLCA 2018. Presented at the E3S Web of Conferences, pp. 1–5. https://doi.org/10.1051/e3sconf/20187404007 DOI: 10.1051/e3sconf/20187404007
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Susilowati, F., Adipradana, A.Y., Prakoso, J.A., 2022. Construction waste management strategy in Indonesia (originally in Bahasa). Deepublish.
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[ref-1] Ajayi, S.O., Oyedele, L.O., 2018. Critical Design Factors for Minimising Waste in Construction Projects: A Structural Equation Modelling Approach. Resour. Conserv. Recycl. 137, 302–313. https://doi.org/10.1016/j.resconrec.2018.06.005 DOI: 10.1016/j.resconrec.2018.06.005

[ref-2] Ajayi, S.O., Oyedele, L.O., Akinade, O.O., Bilal, M., Alaka, H.A., Owolabi, H.A., Kadiri, K.O., 2017. Attributes of Design for Construction Waste Minimization: A Case Study of Waste-to-Energy Project. Renew. Sustain. Energy Rev. 73, 1333–1341. https://doi.org/10.1016/j.rser.2017.01.084 DOI: 10.1016/j.rser.2017.01.084

[ref-3] Ajayi, S.O., Oyedele, L.O., Kadiri, K.O., Akinade, O.O., Bilal, M., Owolabi, H.A., Alaka, H.A., 2016. Competency-Based Measures for Designing Out Construction Waste: Task and Contextual Attributes. Eng. Constr. Archit. Manag. 23, 464–490. https://doi.org/10.1108/ECAM-06-2015-0095 DOI: 10.1108/ecam-06-2015-0095

[ref-4] Akinade, O.O., Oyedele, L.O., Ajayi, S.O., Bilal, M., Alaka, H.A., Owolabi, H.A., Arawomo, O.O., 2018. Designing Out Construction Waste Using BIM Technology: Stakeholders’ Expectations for Industry Deployment. J. Clean. Prod. 180, 375–385. https://doi.org/10.1016/j.jclepro.2018.01.022 DOI: 10.1016/j.jclepro.2018.01.022

[ref-5] Al-Raqeb, H., Ghaffar, S.H., Al-Kheetan, M.J., Chougan, M., 2023. Understanding the challenges of construction demolition waste management towards circular construction: Kuwait Stakeholder’s perspective. Clean. Waste Syst. 4, 100075–100075. https://doi.org/10.1016/j.clwas.2023.100075 DOI: 10.1016/j.clwas.2023.100075

[ref-6] Bappenas RI, 2024. Ekonomi Sirkular Peta Jalan & Rencana Aksi Nasional Indonesia 2025–2045.

[ref-7] Bilal, M., Oyedele, L.O., Qadir, J., Munir, K., Akinade, O.O., Ajayi, S.O., Alaka, H.A., Owolabi, H.A., 2015. Analysis of Critical Features and Evaluation of BIM Software: Towards a Plug-in for Construction Waste Minimization Using Big Data. Int. J. Sustain. Build. Technol. Urban Dev. 6, 211–228. https://doi.org/10.1080/2093761X.2015.1116415 DOI: 10.1080/2093761x.2015.1116415

[ref-8] Bossink, B.A.G., Brouwers, H.J.H., 1996. Construction Waste: Quantification and Source Evaluation. Journal of Construction Engineering and Management. J. Constr. Eng. Manag. 122, 55–60.

[ref-9] Daoud, A.O., Othman, A.A.E., Ebohon, O.J., Bayyati, A., 2023. Analysis of Factors Affecting Construction and Demolition Waste Reduction in Egypt. Int. J. Constr. Manag. 23, 1395–1404. https://doi.org/10.1080/15623599.2021.1974682 DOI: 10.1080/15623599.2021.1974682

[ref-10] Fikri Hasmori, M., Faizul Md Zin, A., Nagapan, S., Deraman, R., Abas, N., Yunus, R., Klufallah, M., 2020. The on-site waste minimization practices for construction waste, in: IOP Conf. Ser. Mater. Sci. Eng. Presented at the IOP Conference Series: Materials Science and Engineering, Institute of Physics Publishing. https://doi.org/10.1088/1757-899X/713/1/012038 DOI: 10.1088/1757-899x/713/1/012038

[ref-11] Hansen, S., 2024. Construction Waste Management from Environmental Law Perspective in Indonesia. Int. J. Law Public Policy IJLAPP 6, 1–7. https://doi.org/10.36079/lamintang.ijlapp-0601.578 DOI: 10.36079/lamintang.ijlapp-0601.578

[ref-12] Hao, J., Yuan, H., Liu, J., Chin, C.S., Lu, W., 2019. A Model for Assessing the Economic Performance of Construction Waste Reduction. J. Clean. Prod. 232, 427–440. https://doi.org/10.1016/j.jclepro.2019.05.348 DOI: 10.1016/j.jclepro.2019.05.348

[ref-13] Hassan, N.M., Alashwal, A., 2024. Developing a Model for the Implementation of Designing Out Waste in Construction. Archit. Eng. Des. Manag. https://doi.org/10.1080/17452007.2024.2311670 DOI: 10.1080/17452007.2024.2311670

[ref-14] Huang, B., Wang, X., Kua, H., Geng, Y., Bleischwitz, R., Ren, J., 2018. Construction and demolition waste management in China through the 3R principle. Resour. Conserv. Recycl. 129, 36–44. https://doi.org/10.1016/j.resconrec.2017.09.029 DOI: 10.1016/j.resconrec.2017.09.029

[ref-15] Jahan, I., Zhang, G., Bhuiyan, M., Navaratnam, S., Shi, L., 2022. Experts’ Perceptions of the Management and Minimisation of Waste in the Australian Construction Industry. Sustain. Switz. 14. https://doi.org/10.3390/su141811319 DOI: 10.3390/su141811319

[ref-16] Jaques, R., 2000. Construction Site Waste Generation—The Influence of Design and Procurement. Archit. Sci. Rev. 43, 141–145. https://doi.org/10.1080/00038628.2000.9696897 DOI: 10.1080/00038628.2000.9696897

[ref-17] Laovisutthichai, V., Lu, W., Bao, Z., 2022. Design for Construction Waste Minimization: Guidelines and Practice. Archit. Eng. Des. Manag. 18, 279–298. https://doi.org/10.1080/17452007.2020.1862043 DOI: 10.1080/17452007.2020.1862043

[ref-18] Ma, M., Tam, V.W.Y., Le, K.N., Li, W., 2020. Challenges in current construction and demolition waste recycling: A China study. Waste Manag. 118, 610–625. https://doi.org/10.1016/j.wasman.2020.09.030 DOI: 10.1016/j.wasman.2020.09.030

[ref-19] Minunno, R., O’Grady, T., Morrison, G.M., Gruner, R.L., Colling, M., 2018. Strategies for applying the circular economy to prefabricated buildings. Buildings 8. https://doi.org/10.3390/buildings8090125 DOI: 10.3390/buildings8090125

[ref-20] Osmani, M., Glass, J., Price, A.D.F., 2008. An Investigation of Design Waste Causes in Construction, in: WIT Transactions on Ecology and the Environment. WITPress, pp. 491–498. https://doi.org/10.2495/WM080501 DOI: 10.2495/wm080501

[ref-21] Othman, A.A.E., Elsawaf, L.A., 2021. Design Out Waste Framework for Achieving Sustainability in Public Housing Projects in Egypt. WSEAS Trans. Environ. Dev. 17, 222–231. https://doi.org/10.37394/232015.2021.17.22 DOI: 10.37394/232015.2021.17.22

[ref-22] Rady, M., Mahfouz, S.Y., Taher, S.E.-D.F., 2022. Optimal Design of Reinforced Concrete Materials in Construction. Materials 15. https://doi.org/10.3390/ma15072625 DOI: 10.3390/ma15072625

[ref-23] Rivera-Tenorio, M., Moya, R., 2020. Potential for pellet manufacturing with wood waste from construction in Costa Rica. Waste Manag. Res. 38, 886–895. https://doi.org/10.1177/0734242X19893022 DOI: 10.1177/0734242x19893022

[ref-24] Sembiring, F.T., 2018. Study of Recycling Demolition Waste Material Product in Jakarta, Indonesia, in: ICSoLCA 2018. Presented at the E3S Web of Conferences, pp. 1–5. https://doi.org/10.1051/e3sconf/20187404007 DOI: 10.1051/e3sconf/20187404007

[ref-25] Sudiro, R., Musyafa, A., 2018. Analysis of Structural Work Material Waste in Construction Projects (in Bahasa). Teknisia 419–429.

[ref-26] Susilowati, F., Adipradana, A.Y., Prakoso, J.A., 2022. Construction waste management strategy in Indonesia (originally in Bahasa). Deepublish.

[ref-27] Svendsen, A., 2022. Roadmap for an Energy Efficient, Low-Carbon Buildings and Construction Sector in Indonesia.

[ref-28] Tam, V.W., Fung, I.W., Chan, J.K., Martin, S., 2014. Adoption of design and build procurement method: an empirical study on Wynn Macau Resort. Int. J. Constr. Proj. Manag. 6, 3.

[ref-29] Tam, V.W.Y., Hao, J.J.L., 2014. Prefabrication as a mean of minimizing construction waste on site. Int. J. Constr. Manag. 14, 113–121. https://doi.org/10.1080/15623599.2014.899129 DOI: 10.1080/15623599.2014.899129

[ref-30] Tereshko, E., Rudskaya, I., 2021. A Systematic Approach to the Management of a Construction Complex under the Conditions of Digitalization. Int. J. Technol. 12, 1437. https://doi.org/10.14716/ijtech.v12i7.5356 DOI: 10.14716/ijtech.v12i7.5356

[ref-31] Waheed, W., Khodier, L., Fathy, F., 2024. Integrating Lean and Sustainability for Waste Reduction in Construction from the Early Design Phase. HBRC J. 20, 337–364. https://doi.org/10.1080/16874048.2024.2318502 DOI: 10.1080/16874048.2024.2318502

[ref-32] Wahyu Adi, T.J., Wibowo, P., 2020. Application of circular economy in the Indonesia construction industry. IOP Conf. Ser. Mater. Sci. Eng. 849. https://doi.org/10.1088/1757-899X/849/1/012049 DOI: 10.1088/1757-899x/849/1/012049

[ref-33] Wang, H., Yi, W., Liu, Y., 2022. Optimal Route Design for Construction Waste Transportation Systems: Mathematical Models and Solution Algorithms. Mathematics 10. https://doi.org/10.3390/math10224340 DOI: 10.3390/math10224340

[ref-34] Wang, J., Li, Z., Tam, V.W.Y., 2015. Identifying Best Design Strategies for Construction Waste Minimization. J. Clean. Prod. 92, 237–247. https://doi.org/10.1016/j.jclepro.2014.12.076 DOI: 10.1016/j.jclepro.2014.12.076

[ref-35] Yu, A.T.W., Wong, I., Wu, Z., Poon, C.-S., 2021. Strategies for Effective Waste Reduction and Management of Building Construction Projects in Highly Urbanized Cities— a Case Study of Hong Kong. Buildings 11. https://doi.org/10.3390/buildings11050214 DOI: 10.3390/buildings11050214