Govt to resume major toll road projects: Official

Govt to resume major toll road projects: Official

The Jakarta Post, Jakarta

The government is planning to build 4,400 kilometers of toll
roads across the country, and is adopting a new tariff policy to
lure investors, a senior government official said on Thursday.

Minister of Resettlement and Regional Infrastructure Soenarno
said the projects were located in Java, Sumatra, Kalimantan and
Sulawesi.

Their construction plans were resumed after President Megawati
Soekarnoputri lifted a decree last year that suspended them due
to the 1997 economic crisis, he said.

"Financing it shouldn't be a problem, we'll leave that up to
the private sector," Soenarno said in a press briefing after
attending a Cabinet meeting.

In Java, he said, toll road projects would take up 1,400
kilometers, linking Banten in Java's westernmost province of
Banten with Banyuwangi on the island's easternmost tip.

"Of the 1,400 kilometers, 575 kilometers are already in use,"
he added.

One of the suspended projects includes the Jakarta Outer Ring
Road, which hit a snag over finding the right investor.

He said the government was also evaluating whether old
investors still had funds to build the remaining 825 kilometers
in Java. "If they don't have the financial means, we'll have to
drop them and retender the projects."

The construction of toll roads has virtually come to a halt
since the 1997 economic crisis, with neither the government nor
private local investors having enough capital.

Foreign investor interest has remained high, however, as
traffic flows continue to grow, helped by a boost in economic
activities.

Last year, Soenarno said a number of foreign investors had
approached the government over the financing of the construction
of toll roads in Java. He said a Saudi Arabian investor had
pledged some US$800 million for their development.

The government's reluctance to raise toll tariffs had,
however, dampened investors' appetites.

"We have had plenty of talks with foreign investors, they
complain about many things but at the end of the day it comes
down to tariffs," said Coordinating Minister for the Economy
Dorodjatun Kuntjoro-Jakti.

To this end, the government will draw up a new tariff policy
for not only toll tariffs but also water and transportation fares
among others, Soenarno said.

Under the present mechanism, raising toll tariffs is a
political decision in need of legislators approval.

Soenarno said discussion over the new tariff policy had yet to
start. But according to him, the government wants a more flexible
tariff policy and also to lend regional governments a greater
say.

Dorodjatun added that President Megawati would inaugurate a
number of giant projects on Wednesday next week.

The projects include a petrochemical plant, a fertilizer plant
and a gas pipeline, he said.