President Joko Widodo officiated Medan-Kualanamu-Tebing Tinggi toll road (Image credit : Presidential Office)

JAKARTA (TheInsiderStories) – Indonesian ministry of public works and public housing on Thursday (11/21) offered four toll roads worth Rp112.96 trillion (US$ 8.06 billion) with a total length of 424.27 kilometers (km). The government will prioritize the private sector rather than the state-owned company.

Infrastructure, as conveyed by President Joko Widodo earlier, is still a priority in addition to human resources, one of which is connectivity. I am sure toll road investment will benefit all of you, we will prioritize the national private sector,” minister Basuki Hadimuljono said at the market sounding event in Jakarta.

In detail, the four toll roads offered are, first, the Solo – Yogyakarta – NYIA Kulon Progo toll road along 93.14 km at a cost of Rp28.58 trillion. Second, the Yogyakarta – Bawen toll road along 76.36 km worth Rp17.38 trillion.

Third, Tasikmalaya-Cilacap Gedebage toll roads along 206.65 km costing Rp57.594 trillion. Fourth, Makasar – Maros – Sungguminasa, and Takalar, which cover 48.12 km worth Rp9.41 trillion.

In the next five years, Hadimuljono went on to say, his ministry targeted the construction of new roads along 3,000 km and the construction of 2,500 km of toll roads. Meanwhile, financing infrastructure projects is considered to be one of the biggest challenges in toll road development.

“The reason is that the ability of the state budget for 2020-2024 is projected to only be able to meet 30 percent or around Rp623 trillion of the total budget needed for infrastructure provision of Rp2,058 trillion,” the minister noted.

As a step to close the 70 percent non-state funding gap or Rp1,435 trillion, the ministry, he said, is pushing for innovation in infrastructure development financing through the public-private partnership scheme.

Through this scheme, the government provides various facilities and facilities including Viability Gap Funding (VGF) in the form of state budget funding support for the construction of part of toll road construction so as to increase the financial viability of a toll road section, Hadimuljono concluded.

Meanwhile, Indonesia’s Toll Road Regulatory Agency previously has offered seventh toll road projects with an investment value of Rp151.13 trillion to be auctioned until December 2019. The projects have a length of 575 km.

The agency’ head Danang Parikesit said six of the seven projects to be auctioned were proposals or initiatives from business entities. He added that currently there is one project which is in the tender process, namely the Balikpapan – Penajam Paser Utara toll road bridge along 7.35 km.

“The project is a business entity initiative with the right to equalize the offer or right to match at PT Tol Teluk Balikpapan,” he said. PT Tol Teluk Balikpapan is a subsidiary of PT Waskita Toll Road (WTR). With the right to equalize the offer, WTR has a huge opportunity to win the auction of projects worth Rp15.53 trillion.

While the six toll road projects are also ready to be auctioned with a total investment of Rp135.60 trillion. The six projects are Semanan – Balaraja toll road along 31.90 km, Kamal – Teluk Naga – Rajeg along 38.60 km, Patimban Port Access along 37.70 km, Gedebage – Tasikmalaya – Cilacap along 184 km, Solo – Yogyakarta – Kulon Progo along 91.93 km, and Yogyakarta – Bowen along 77 km.

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.

From 2015 to June 2019, the agency has completed the operation of 985 km. From 1978 to June 2019, toll roads in Indonesia that have been fully constructed and operate have reached 1,780 km, the agency data showed.

US$1=Rp14,000

Written by Lexy Nantu, Email: lexy@theinsiderstories.com