Govt plans new scheme for turnpike projects
The Jakarta Post, Jakarta
A proposed new financing scheme for turnpike projects will only require private investors to provide 30 percent of the money needed for land acquisition, while the rest can be obtained from bank loans.
The Public Works Ministry's director general for infrastructure development, Hendrianto Notosoegondo, also proposed that investors secure bank loans to acquire more land by using the land they had already bought with their own capital as collateral.
He said that he expected this would encourage investors to participate in turnpike projects who were currently unwilling to do so due to the high cost of land acquisition.
A discouraging example for would-be investors is the delay affecting the construction of the expressway linking Waru and Juanda airport in Surabaya, East Java, which has been delayed for almost four years due to the increasing cost of land acquisition.
Turnpike operator PT Citra Marga Nushapala Persada's president, Dadi Hariadi, welcomed the new scheme, and urged investors to complete the construction of their projects as scheduled as any delays would increase the interest they had to pay on their bank loans.
However, Dadi asked the government to take responsibility for any additional expenses resulting from land disputes.
The new scheme was expected to be more successful than the previous idea of a "revolving fund", in which the government would initially take care of all the land acquisition expenses through the state budget, while investors would repay the government later.
Due to the current economic situation, the government lacks the capacity to finance big projects.
According to Hendrianto, the government can provide only 3.7 percent, or Rp 590 billion, of the total of Rp 15.98 trillion needed to acquire land for the development of 57 expressway projects over the next five years.(09)