Govt offers toll roads to public
Govt offers toll roads to public
JAKARTA (JP): Minister of Public Works Radinal Moochtar
yesterday offered the job of constructing 770 kilometers of new
toll roads to both local and foreign private investors.
Addressing some 700 executives from various companies, Radinal
said the toll roads in question were expected to help create
quick and smooth traffic flow across Java, whose major roads were
currently overburdened.
He said that the proposed 770 kilometers of toll roads would
consist of 19 segments, of which 18 would be located in Java --
where 60 percent of Indonesia's 193 million people live -- while
the other one would be in North Sumatra, linking Medan and
Binjai.
The 18 segments in Java include three roads connecting Sadang
in Cikampek with Palimanan in Cirebon, both in West Java, three
connecting Ciawi and Citatah in West Java and three connecting
Cirebon and Batang in West and Central Java.
There is to be an 80-kilometer Semarang-Surakarta segment in
Central Java and a 209-kilometer Surakarta-Mojokerto toll road
linking Central and East Java, which are divided into five
segments.
Also planned are a 24-kilometer Surabaya outer ring road, a
29.5-kilometer Pandaan-Malang free-way segment and a 40-kilometer
Pasuruan-Probolinggo segment, all in East Java.
The road projects are to be carried out under a build, operate
and transfer (BOT) scheme, in which investors can establish
either a joint venture or joint operations with PT Jasa Marga,
the state-run company assigned to manage all Indonesia's toll
roads.
Radinal said that Jasa Marga would go it alone if suitable
partners could not be found.
"These projects are very important to Indonesia and Jasa Marga
will build the roads by itself, even though they might take a
little longer to complete, if no private partners are available,"
Radinal said.
In yesterday's presentation, Radinal was accompanied by
Director General of Road Development Soeharsono Martakim and the
president of Jasa Marga, Maryadi Darmokumoro.
Designs
Maryadi said his company expected potential investors to have
submitted the final engineering designs this year and that
construction would start by next year.
Of the 19 toll road segments, one is expected to start
operation by 2000, three by 2001 and the others by 2004.
Based on last year's projection, Maryadi said, the planned
toll roads would cost a total of Rp 5.02 trillion (US$2.27
billion) to build, of which Rp 4.01 trillion would be spent on
the construction of the roads and the other Rp 1.05 trillion
would be spent on land acquisition.
Maryadi said the government would undertake the task of
acquiring the land through Jasa Marga, while private investors
would have to provide the Rp 4.01 trillion for the road
construction.
The funds spent on land acquisition would constitute Jasa
Marga's equity investment in the BOT projects, he said.
However, Maryadi said, the estimate of required investment was
based on a 1994 projection, made prior to an increase in the
reference prices of cement.
Last weekend, the government announced a 40 percent increase
in reference prices of cement.
Maryadi said earlier this week that the increase in cement
prices would force Jasa Marga to revise upwards the investment
value of toll roads because the cement price rise would result in
an escalation of costs for their construction.
At the old cement prices, toll road construction was estimated
to average Rp 10 billion per kilometer.
Toll roads were introduced for the first time in Indonesia in
1978 when the government assigned Jasa Marga to construct and
operate a 26-kilometer freeway linking Jakarta and Bogor in West
Java.
In 1990, under Government Ruling No. 8/1990, private investors
were for the first time allowed to enter the toll road business
by establishing a joint venture with Jasa Marga.
Indonesia now has some 475 kilometers of toll roads, built
both by state-run Jasa Marga and by private companies, which
include the publicly-listed PT Citra Marga Nusaphala Persada and
the Humpuss Group. (kod/rid)