JAKARTA (TheInsiderstories) – State-owned toll road operator PT Jasa Marga Tbk (IDX:JSMR) has the opportunity to become the majority owner of the Trans-Java toll roads that stretch from the western tip of Java to East Java, by buying the newly-operated toll roads being divested by PT Waskita Karya Tbk (IDX:WSKT).
‘By acquiring the (Waskita) toll roads, Jasa Marga could become majority owner and the operator of the entire Trans-Java toll roads,’ said Deputy for Construction and Transportation Facilities at the State-Owned Enterprise Ministry Ahmad Bambang on Thursday (9/11).
He made the statement after Waskita Karya announced it had decided to postpone the sale of its 10 sections of toll roads, some of which are part of the Trans-Java toll road, when the price offered by private investors was disappointing. The company aims to raise trillions of rupiah to fund existing and planned toll road development by divesting the already-completed toll roads.
Among the toll road sections to be sold are Kranci-Pejagan, Peagan-Pemalang, Pasuruan-Probolingo, Solo-Ngawi, Ngawi-Kertosono and Batang-Semarang. These toll road sections are part of the Trans-Java toll road.
President Director of Waskita Karya M. Choliq has said that the postponement of the divestment was the result of disagreements on prices offered by investors.
Jasa Marga and PT Astra Internasional Tbk’s (IDX: ASII) toll road units have earlier expressed interest in acquiring Waskita Karya’s assets.
The SOEs has a huge task on its shoulders, namely, developing toll road construction projects, spanning a total of 1,260 kilometers before 2019. To fund these projects, the company requires huge amount of funds up to Rp 110 trillion.
The plan to sell the toll roads was in line with the call of President Joko Widodo to speed up the development of toll roads in the country, which has been too slow.
President Widodo has set an ambitious target to develop more than double the existing length of toll roads during his five-year tenure. Over the past three years, 568 km of new toll roads have been developed, totaling operating toll road length to 1,348 km, from 780 km in Oct. 2014. The President has set a plan to add 1,852 km of toll roads before the end of 2019, when he concludes his term of office.
Based on Indonesian standards, the target is quite ambitious, because in the past thirty years, up until 2014, only 780 km of toll roads were developed, the majority of which were developed and operated by Jasa Marga. Since coming to power, President Joko Widodo has allowed more state construction companies, including Waskita Karya and PT Adhi Karya Tbk (IDX: ADHI), to develop toll roads.
However, funding has been one of the key issues to be solved, in addition to land clearing problems. Waskita has taken the responsibility to support the Joko Widodo government’s determination to more than double the length of the country’s toll roads.
By international standards, the development of the country’s toll roads has been far too slow. China, which started late in developing toll roads, has so far developed around 280,000 kilometers of toll roads.
Business players have supported the government’s drive to develop toll roads as it will provide a strong foundation for more sustainable economic growth in the future.
By Elisa Valenta, Email: firstname.lastname@example.org