Indonesia Offers Six Toll Road Projects Costs US$8B

The Innauguration of part of Trans Java Section by President Joko Widodo - Photo by Toll Road Regulatory Agency

JAKARTA (TheInsiderStories) – Indonesia’s Toll Road Regulatory Agency offered six toll road projects with an investment value of Rp124 trillion (US$8.67 billion) to be auctioned gradually in the second half of this year.

The projects have length 327 kilometres, said the agency on Tuesday (10/07). The agency’ head Herry Trisaputra Zuna said that the auction process of the six toll roads is expected to be completed this year.

The six toll roads are Semarang-Demak along 26.80 kilometres (km) with investment value Rp15.34 trillion, Semanan-Balaraja along 31.90 km with value Rp16 trillion, Kamal-Teluknaga-Rajeg 38.60 km of Rp23.16 trillion.

In addition, the tendered project is access to the Port of Patimban along 37.70 km worth of Rp6.40 trillion, Gedebage-Tasikmalaya-Cilacap along the 184 km with an investment of Rp46.60 trillion, and the Balikpapan-Penajam Paser Utama Bridge along 7.60 km with an investment value of Rp16.50 trillion.

According to him the projects, PT Penjaminan Infrastruktur Indonesia, the state-owned guarantee firm under the Ministry of Finance, is ready to guarantee the risk of the six toll road projects.

President Director of PII Armand Hermawan stated that a number of risks that can be guaranteed by PII are political risks, delays in land procurement, delayed refunds and tariff adjustments.

Last year, the agency has auctioned two toll road projects to investors with through availability payment scheme, in which the government will set up the quality and service standard.

The two toll roads are the Serang-Panimbang toll road section with a length of 83.9 kilometres and estimated investment of Rp11.4 trillion in Banten province and a toll road linking Samarinda and Bontang in East Kalimantan with a length of 94 km and estimated cost of Rp15 trillion.

Earlier in February 2017, the Indonesia government launched five toll projects worth Rp50.8 trillion that developed through Public Private Partners scheme. All the projects with the length 311.32 km are expected to be completed by 2019.

The five projects are Jakarta – Cikampek II elevated along 36.4 km with total investment Rp14.7 trillion, Krian – Legundi – Bunder – Manyar 38.2 km (Rp 9 trillion), Cileunyi-Sumedang – Dawu (Cisundawu) with a length of 60.72 km that will be connected with the port of Cirebon (Rp8.2 trillion), Serang – Panimbang along 33 km, which is part of the development of Tanjung Lesung (RpRp5.4 trillion) and Kuala Tanjung Mas – Tebing Tinggi – Parapat 143 km (Rp13.4 trillion).

According to Minister for Economic Affairs and Chairman of Committee Acceleration of Infrastructure Development Priorities Darmin Nasution, the toll road projects require a total investment of Rp4,800 trillion until 2019.

In the last of two years, the government has injected capital for state-owned enterprises (SOEs) Rp65.8 trillion and Rp50.4 trillion to carry out the infrastructure projects. At the same time, Minister of Public Works and People’s Housing Basuki Hadimuljono said, its unit already paid Rp14.5 trillion from total funds Rp34 trillion for land acquisition.

Toll Road Integration

The government is continuously working to realize an effective and efficient national transportation system to improve the mobility of goods and services. In an effort to support the national logistics system, the Government implements a policy of transaction integration on toll roads, said Zuna.

This, he added, is in line with Law Number 38 Year 2004 concerning Roads mandating that Toll Roads are held to improve the use and effectiveness of goods distribution services, and affirmed in services to support the improvement of economic growth and is aimed at increasing efficiency of distribution service in supporting the improvement of economic growth especially in areas that have high level of development.

In Media Discussion on Monday (02/07), Zuna stated government has the plan to integrate the management of toll road across the country. The toll adjustment is expected to address the needs of logistics actors and encourage trucks or containers to utilize toll roads thus reducing arterial road burden.

The integration of these toll roads also encourages partiality to freight logistics and public transport. He revealed that based on the mapping, with an integrated payment system, 61 per cent of JORR Toll Road users will benefit from paying cheaper rates than before.

After integration, the use of JORR Toll Road along 76,43 Km will be charged one tariff that is Rp15,000 for the vehicle of class I, the vehicle of class 2 and 3 tariff is same that is Rp22,500, and group 4 and 5 also pay the same tariff that is Rp 30,000.

The tariff rate of Rp 15,000 is based on the multiplication of the average distance of JORR toll road users 17.6 km with an average tariff of Rp 875 per km. The amount of this tariff is still below the willingness to pay off the community obtained from the previous study related to toll road investment.

The benefits of toll road integration are the efficiency of time and cost, especially toll road users, especially logistic transportation that stopped 2-3 times to only one time with the lower tariff, he ended.

US$1: Rp14,300