New bill to lure highway investors: Minister<\/p>\n
Rendi A. Witular, Jakarta<\/p>\n
The much-anticipated bill on toll roads is expected to
\nfacilitate the liberalization of the sector, paving the way for
\nmore foreign investment, a minister said.<\/p>\n
Minister of Settlement and Regional Infrastructure Soenarno
\nsaid the bill was designed to open the toll road sector to
\nprivate investors, while eliminating barriers that often surfaced
\nduring the construction phase of toll roads.<\/p>\n
"The bill will help liberalize the sector by separating the
\nfunctions of regulator and operator, both of which are currently
\nheld by state toll operator PT Jasa Marga," Soenarno said on
\nMonday after a hearing with the House of Representatives
\nCommission IV for transportation and infrastructure.<\/p>\n
At present, Jasa Marga is involved in all toll road projects,
\nwhether as part of a joint venture or as the sole constructor.<\/p>\n
Soenarno said the bill required the establishment of an
\nindependent body specifically tasked with regulating and
\nsupervising the toll road sector.<\/p>\n
The bill is also expected to resolve the two greatest problems
\nfaced by investors: land acquisition and determining the toll
\nrate.<\/p>\n
According to the bill, investors will have the freedom to
\ndecide upon toll fees and a time frame for its increase in their
\nbusiness plan, as well as the concession period for operating the
\nroad. The proposed independent body, along with the
\ninfrastructure and settlement ministry, is to review and approve
\nthe business plan.<\/p>\n
The new mechanism will enable investors to draw up a schedule
\nof interim toll fees as early as possible in the process to
\ncalculate the feasibility of the business.<\/p>\n
At present, tariff hikes are entirely dependent on the
\ngovernment.<\/p>\n
Another crucial point raised in the bill is an obligation for
\nlandowners to cooperate in land acquisition and compensation
\nprocesses, so the toll road projects may proceed smoothly.<\/p>\n
Numerous infrastructure projects in the country have run
\naground due to problems acquiring land, with investors facing
\nwidespread protests and rejection from landowners.<\/p>\n
The most recent toll road project halted due to land
\nacquisition problems is the 1.3 km segment of the Veteran-Ulujami
\nstretch of the Outer Ring Road in South Jakarta, originally set
\nfor completion in May 2003.<\/p>\n
Five plots of land remain to be acquired for the project, and
\nJasa Marga was forced to change the route after lengthy and tough
\nnegotiations with landowners that produced no solutions.<\/p>\n
Soenarno said the bill would allow disputes that emerged after
\nthe land price had been agreed upon to be resolved in court while
\nthe construction project continued.<\/p>\n
The bill also allows toll operators to seek financing for
\nhighway projects by issuing asset-backed securities -- a type of
\nbond backed by underlying asset pools -- in which the toll road
\nwill be used as collateral.<\/p>\n
"Financing is the most crucial issue in toll road projects. We
\nplan to help toll operators gain easier access to financing
\nresources, so they may complete our massive toll road projects in
\ntime," said Soenarno.<\/p>\n
He was referring to the 1,486 km toll road that will link
\nMerak, Banten, and Banyuwangi, East Java, which is expected to
\ncost about Rp 86 trillion with completion scheduled for 2009.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/new-bill-to-lure-highway-investors-minister-1447893297",
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