Tue, 25 Oct 1994

Consortium to build $594.13m toll road

JAKARTA (JP): An Indonesian-British consortium, led by President Soeharto's eldest daughter Siti Hardiyanti Rukmana, yesterday won a contract from the government to construct a 59- kilometer toll road with an investment of Rp 1.29 trillion (US$594.13 million).

"The deal is very important for us because it is the first time for a foreign investor to be involved in the toll road project in the country," Minister of Public Works Radinal Moochtar said at the ceremony for the signing of the agreement between the consortium and PT Jasa Marga, the state-owned company assigned to manage toll roads in the country.

The consortium, called PT Citra Ganesha Marga Nusantara, is 30 percent owned by PT Citra Lamtoro Gung Persada, 30 percent by Jasa Marga and 40 percent by Trafalgar House of Britain.

Yesterday's agreement on the toll road project, which will link Cikampek and Padalarang, both in West Java, was signed by the consortium's chief commissioner, Hardiyanti, and its president, Michael Slater, on one side and by the president of Jasa Marga, Maryadi Dharmokumoro, representing the government.

Visiting British Minister of Trade Richard Needham, who also witnessed the signing of the deal, called the project the biggest civil work to involve a British company.

Moochtar said that the deal allows the consortium to operate the Cikampek-Padalarang toll road for 27 years.

"After a period of the 27-year concession, we expect that the consortium will transfer the toll road management to the government," he told The Jakarta Post.

He said that the project's construction, scheduled to start by the middle of next year, will be implemented in two stages.

"The first stage will include the construction of the highway's segment between Cikampek and Purwakarta, while the second phase will link Purwakarta and Padalarang," he said.

He expects that the Cikampek-Purwakarta segment will be completed by March 1997 and the Purwakarta-Padalarang section by March 1999.

Dharmokumoro meanwhile announced after the ceremony that in addition to the 59-kilometer toll road, the consortium will also construct 7.2 kilometers of outlet roads along the highway as well as four intersections over it.

Slater, who is also deputy managing director of Trafalgar House, told the Post that the consortium was established last December with authorized capital of $88.5 million.

He declined to specify its paid-up capital.


According to Slater, the British government since 1988 has offered a concessional grant worth $28 million to help the Indonesian government purchase a stake in the toll road project.

"For financing the planned toll road, we are hoping for more export credits from the U.K. government and we are looking for other investors to join our project," he said.

Trafalgar's equity in the consortium will then be reduced because the company will offer some of its stake to other investors interested in the project.

Paula Ayus, the consortium's vice president, told reporters that the consortium has received preliminary commitments from various foreign banks to help finance the project.

A British embassy report said yesterday that the British government has provided a series of concessional loans worth $550 million since 1986 to Indonesia for the development of various projects, such as power generation and transmission, forestry radios, educational equipment and rail networks.

An informed source said that Hardiyanti, popularly known as Mbak Tutut, has had the good fortune to clinch another toll road deal worth some $400 million in the Philippines.(fhp)