Wijaya Karya Secures US$66 Million Loan for Land Acquisition

Toll Road - Photo by PT Nusantara Infrastructure Tbk

JAKARTA (TheInsiderStories) – State-owned construction company PT Wijaya Karya Tbk (IDX: WIKA) has secured Rp894 billion (US$66.22 million) from PT Bank Mandiri Tbk (IDX: BMRI) and PT Bank Negara Indonesia Tbk (IDX: BBNI). This loan will be allocated to finance land acquisition needed for the 84 kilometer-long Serang-Panimbang toll road.

Each lender has provided Rp447 billion, respectively, for the loan that will mature in the next 24 months, at an interest rate of 9 per cent.

Entus Asnawi, PT Wijaya Karya Serang Panimbang CEO, estimated the company will need around Rp2.2 trillion funding for the planned 51-kilometer toll road.

“The land acquisition is carried out in parallel to three sections of the toll road; we expect to start commercial operation by end-2019. The company has cleared land acquisition from 16 villages, and will disburse Rp550 billion this year,” he said.

The company started the land clearing process in May 2017 and targets clearing 100 percent of necessary land for the toll road project by June 2018. The land clearing process inevitably takes time due to bottlenecking issues such as disputed land certification and multiple land owners.

“Ideally land acquisition will be done in 180 days,” he said.

The 83.6 km toll road development is one of the national infrastructure priority projects, intended to provide access to the Tanjung Lesung Special Economic Zones and Ujung Kulon National Park. 33 kilometers of the road will be constructed by the government.

This toll road is expected to reduce logistic costs for goods delivery from the industrial estate in Pandeglang to the port in Jakarta and vice versa.

Written by Yosi Winosa, email: yosi.winosa@theinsiderstories.com