Jasa Marga told to delay key bond plan<\/p>\n
Rendi A. Witular, Jakarta<\/p>\n
State toll road operator PT Jasa Marga will have to delay its
\nplan to issue Rp 10 trillion (about US$1.11 billion) worth of
\nbonds later this year as the Capital Market Supervisory Agency
\n(Bapepam) refuses to give its approval to it until a key bill on
\ntoll roads has been endorsed.<\/p>\n
The delay in the issuance of the bonds is likely to hamper the
\ndevelopment of some toll road projects, which experts say are
\nvital infrastructure for economic development.<\/p>\n
"Bapepam has yet to approve the plan ... We have projected
\nsuch a move will delay the construction of (toll) roads since
\nthere will insufficient funds to finance the projects," Minister
\nof Infrastructure and Regional Settlement Soenarno said recently.<\/p>\n
Soenarno said Jasa Marga initially planned to issue the bonds
\nin October or November, with proceeds from the bonds expected to
\nbe received by the company in late November.<\/p>\n
The bonds, which will mature in five to seven years, will be
\nissued in the form of asset-backed securities -- a type of bond
\nbased on underlying asset pools. Through such a scheme, the toll
\nroad projects run by the company will be used as collateral.<\/p>\n
Proceeds from the bonds would be used to fund 14 of Jasa
\nMarga's toll road projects, which include the completion of the
\nJakarta Outer Ring Road and the Padalarang to Bandung, Semarang
\nto Soloand and the Cikampek to Cirebon projects.<\/p>\n
The roads are part of a 1,486 kilometer toll road that will
\nlink Merak in Banten to Banyuwangi in East Java, at a total cost
\nof about Rp 86 trillion, with completion scheduled for 2009.<\/p>\n
The Rp 10 trillion bonds are the first tranche of a series of
\nbonds planned by the government to finance the projects.<\/p>\n
Bapepam bureau chief for investment management and research
\nFreddy Rikson Saragih said the capital market watchdog had not
\nyet given clearance for Jasa Marga to issue the bonds, pending
\nthe endorsement of the highway bill currently being deliberated
\nby the government and the House of Representatives.<\/p>\n
"There is uncertainty about the company's operations. This is
\nnot good for investors. We have seen that the uncertainty can
\nonly be addressed if the House and the government endorse the
\nhighway bill," Freddy said.<\/p>\n
Freddy said the bill aimed to separate Jasa Marga's current
\nrole both as regulator and operator of the country's toll road
\nsector, a move that may impact Jasa Marga's current projects and
\nfuture revenue.<\/p>\n
Another uncertainty factor for investors is linked to land
\nclearing for toll road projects, which in the past had often
\ncaused major delays in toll road development due to resistance
\nfrom nearby residents and protests from landowners<\/p>\n
"The highway bill is expected to address those problems, and
\nwe have to wait for its endorsement. But at the same time we will
\ntry to seek clarification from Jasa Marga about these issues in
\norder to ease the uncertainty," Freddy said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/jasa-marga-told-to-delay-key-bond-plan-1447893297",
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"sponsor": "Okusi Associates",
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