Firms to build Rp 1.4t toll road in Central Java

JAKARTA (JP): Construction company PT Sumber Mitra Jaya signed a joint venture agreement yesterday with state-owned toll road operator PT Jasa Marga and two other partners to build a 91- kilometer toll road worth Rp 1.4 trillion (US$500 million) in Central Java.

The two other partners are PT Arthayasa Karya Bina Caraka and the army-owned Kartika Eka Paksi Foundation.

Sumber Mitra Jaya president director K. Gowindasamy said the consortium would develop two toll roads, including a 56-kilometer toll road linking Pejagan and Pemalang and a 36-kilometer toll road linking Pemalang and Batang.

"I hope we can start construction early next year," said Gowindasamy, adding the construction of each toll road would take three years to complete.

The consortium has the right to operate the Pejagan-Pemalang toll road for 24 years, including three years of construction and 20-year concession and 20 years to operate the Pemalang-Batang toll road, including three years of construction.

The rupiah has declined by over 20 percent against the U.S. dollar since early January this year, reaching its lowest level in the past few weeks due to speculative attacks from local and foreign fund managers.

The four companies set up two joint ventures with different share composition to develop both toll roads, he said.

The Pejagan-Pemalang toll road will be built by PT Mitra Jaya Artha Arga (MJAA), 75 percent owned by Sumber Mitra Jaya, 10 percent by Jasa Marga, 10 percent by Arthayasa and 5 percent by Kartika.

The Pemalang-Batang toll road will be built by PT Sumber Mitra Artha Utama (SMAU), which is 65 percent owned by Sumber Mitra Jaya, 20 percent by Jasa Marga, 10 percent by Arthayasa and 5 percent by Kartika.

Sumber Mitra Jaya director of finance S. Sadhu said the projects would be financed with a Rp 300 million equity and a Rp 1.1 trillion syndicated loan, adding the consortium have signed an agreement with Bank Negara Indonesia (BNI) to lead the loan syndication, which will involve state-owned and private banks.

Sadhu was optimistic the tight money policy now adopted by the government to shore up the falling rupiah would only slightly affect financing the toll road projects.

"The current rupiah upheaval only had a small impact on infrastructure companies like ours because we only make use of a small portion of imported components," Sadhu said.

Jasa Marga president director Maryadi Darmokumoro said the toll roads would ease traffic jams on roads linking Brebes, Tegal, Pemalang, Pekalongan and Batang and enhance economic development of the central part of the Central Java province.

Maryadi said the Pejagan-Pemalang-Batang toll road was part of the 700-kilometer new network of toll road across Java planned for construction over the next few years to connect the Cikampek toll road in West Java with Surabaya in East Java and Semarang and Probolinggo in Central Java.

He said the new toll road networks would go from Cikampek in the west to Sadang, Cirebon, Semarang, Solo, and Surabaya in the east. From Surabaya, it will go south to Gempol, Pandaan and Pasuruan, winding up in Probolinggo. (jsk)