Govt opens tender for 6 toll road projects totalling Rp 3 trillion
Rendi A. Witular, The Jakarta Post/Jakarta
In the wake of the recent Infrastructure Summit, the government will begin the tender process for six toll road projects worth more than Rp 3 trillion (US$333 million) with the bidding process expected to be completed next month.
"Currently, the tender process is in the pre-qualification level with some 147 investors participating. The investors will soon submit their offer price for the projects," Minister of Public Works Djoko Kirmanto told The Jakarta Post recently.
According to Djoko, the investors -- mostly local business groups -- will bid on roads with a total length of more than 130 kilometers.
The projects comprise the roads connecting Medan and Binjai in North Sumatra; one through Makassar; another connecting Cikarang and Tanjung Priok in Greater Jakarta; a toll road between Depok and Jl. Antasari in South Jakarta; the Cinere and Jagorawi route in Bogor; and the Sumedang to Cileunyi route in West Java.
The six are part of the government's plan to build a total of 1,300 kilometers of toll roads over the next five years, eventually providing a direct linking between Merak, Banten on the extreme western tip of Java to Banyuwangi, East Java on the extreme eastern tip of Java.
Toll road projects are one of the government's top priorities in developing the country's infrastructure. During the summit, which ended on Jan. 18, the government put on offer 91 infrastructure projects worth US$22.5 billion to domestic and international investors. The budget is part of the government's total need of around $150 billion for the development of various infrastructure facilities -- including the construction of a total of 114,800 kilometers of roads worth Rp 214.2 trillion (US$23.4 billion).
The massive infrastructure projects are part of the government's effort to prevent congestion in distribution, which significantly increases the cost of doing business here.
The lack of highway capacity is apparent with daily congestion on most key roads that link one province to another in Java, the country's main economic center.
According to the Ministry of Public Works, since 1978, the country has only managed to build 606 kilometers of new highway, or an average of 24 kilometers per year, on the country's total land of about 1.9 million square-kilometers.
In order for the country to reach 6 to 8 percent Gross Domestic Product (GDP) growth, the government is estimated to need approximately US$30 billion annually for infrastructure investments.
The government is committed to spending approximately 20 percent of the state budget on infrastructure, but needs the international and domestic private sectors to pay for the bulk of it.