Mon, 05 Jan 2009
Commuters from Depok commuting to Jakarta will have to wait to enjoy driving down the planned widened 21.7 kilometer Depok-Antasari turnpike as the developer has said it is in difficulty financing the new express lane due to a huge increase in costs.

The culprit is skyrocketing land prices, estimated to have risen from Rp 2.4 trillion (US$212.8 million) to Rp 4.5 trillion.

"We have postponed our planned construction and we will soon offer a new business plan to the government," said Hudaya Arryanto, the director of operations of publicly listed PT Citra Marga Nusaphala Persada (CMNP).

CMNP is the controlling shareholder in PT Citra Waspphutowa, the developer of the Depok-Antasari turnpike which was targeted to start connecting Jakarta with its southern suburban in 2008.

A delay in an infrastructure project is not a rarity here.

Many planned infrastructure projects, especially toll roads, have been progressing slowly due to problems in land acquisition -- groundwork that requires a breakthrough on the part of the government which has vowed to accelerate projects next year.

In 2005, the government planned to build 1,000 kilometers of toll roads all over the country within five years.

This included a 900-kilometer Trans Java toll road mega-project from Jakarta to Surabaya. Another includes hundreds of kilometers of new toll roads off Java.

However, slow progress in land acquisition puts these plans under serious threat.

"Undoubtedly our main problem is land acquisition," head of Toll-way Management Division (BPJT) Nurdin Manurung told The Jakarta Post recently.

Established in June 2005 by the Public Works ministry, BPJT is responsible for managing the establishment and operation of toll roads, including tendering new projects and evaluating the status of winners of tenders.

Until December 2008, according to the agency's report, developers of 12 projects signed in 2006-2007 have yet to complete detailed engineering design (DEDs), to propose the land acquisitions schedule for the construction of 515 kilometers of turnpike.

"Most developers didn't buy the land immediately (after winning their tender). Meanwhile, land owners tend to sell their land for higher and higher prices," Nurdin said.

Developers have asked the government to take over land acquisition. Under existing contracts, developers had to manage both land acquisition and construction themselves.

In July, the Public Works ministry established a land capping scheme that would help developers secure land. The scheme, however, will only cover a maximum of 2 percent of the total initial project budget. JP/hwa



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