Govt to issue bonds to finance toll road project
Fitri Wulandari The Jakarta Post Jakarta
The government plans to issue bonds in a bid to raise cash to help finance 70 kilometers (km) of toll road in Java, according to a senior minister.
Minister of Settlement and Regional Infrastructure Soenarno said that three state-owned securities firms, including Bahana Securities, Mandiri Securities and Danareksa Securities, had been appointed to help arrange the bond issuance.
Speaking after a limited Cabinet meeting, Soenarno said that the project might cost around Rp 3.6 trillion (US$423.53 million).
He did not disclose the size of the planned bond issue or other details, saying only that the securities firms were still making the necessary preparations.
"They will prepare the prospectus and then offer the bonds. The preparation would take about a month," he said.
Soenarno was optimistic at the issue as bonds intended for financing infrastructure projects had previously sold well on the market.
The project consists of unfinished sections of the Jakarta outer ring road (JORR) and the Cikampek to Padalarang stage II toll road project, West Java.
This is the first stage of the planned 1,486-km toll road project that will link Merak, Banten, with Banyuwangi, East Java. The overall project, scheduled to start this year and continue until 2009, is estimated to cost some Rp 77.3 trillion.
The Cabinet meeting also discussed progress in the construction and improvement of railways in Java and Sumatra as well as possible construction of a railway in Kalimantan.
This year, the government plans to complete double-tracking from Cikampek to Cirebon and Cikampek to Bandung (both in West Java) and Yogyakarta to Surakarta, Central Java.
The government will also upgrade railway facilities in South Sumatra to help improve coal transportation amid increasing demand for the commodity from new power plants in Cilegon and Lampung.
Sumatra is one of the main coal mining sites in the country.
Coordinating Minister for the Economy Dorodjatun Kuntjoro- Jakti said the government would start various studies to push ahead with the construction of a railway in Kalimantan.
These include initial design for the 60-km Samarinda to Balikpapan section, East Kalimantan; Banjarmasin, South Kalimantan, to Palangkaraya, Central Kalimantan, phase 1 (100 km) and a feasibility study on the 100-km Bontang to Samarinda section, East Kalimantan.