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)