House of Representatives endorses pro-investor bill on highway
House of Representatives endorses pro-investor bill on highway
Rendi A. Witular, The Jakarta Post, Jakarta
The House of Representatives endorsed on Wednesday a key bill
on highway development that is expected to lure badly needed
investment for the construction of toll roads, but runs the risk
of landowners having to surrender their assets for unfavorable
government-determined prices.
Minister of Settlements and Regional Infrastructure Soenarno
said the bill was designed to open the toll road sector to
private investors, while eliminating barriers that often surfaced
during the construction phase of toll roads.
"The bill will erase obstacles faced by toll operators,
especially during the land clearance. This is important since
most of our toll road projects have been hampered by such
problems," said Soenarno.
"At present, we are in dire need of sufficient and efficient
transportation infrastructure, in order to support economic
growth and create more jobs," he said.
Numerous infrastructure projects in the country have run
aground due to problems related to land acquisition, with
investors facing widespread protests and rejection from
landowners and backed by regional administrations.
Articles 59, 60 and 61 of the bill, stipulate the elimination
of the rights for the public to protect land ownership, unless it
agreed to the compensation rewarded by the government for the
land.
The articles will allow land disputes to be resolved in court,
while the construction project continues.
Public complaints, however, will be accommodated by article
62, which stipulate the rights of the landowners to file its
complaint with the court and receive reasonable compensation from
losses resulting from the construction of the toll road.
During the plenary session, House deputy chairman A.M. Fatwa
said the much-anticipated bill would help the country to address
problems in transportation and distribution infrastructure, which
had become a serious problem because of the rapid rise in the
number of vehicles on the roads.
"The bill is expected to support the country's economic
growth, and all stakeholders involved in the construction of toll
roads should cooperate and help to make the process goes
smoothly," said Fatwa, a senior lawmaker at the National Mandate
Party (PAN).
Another crucial point included in the bill is the
liberalization of the toll-road sector by separating the
functions of regulator and operator, both of which are currently
held by state toll operator PT Jasa Marga.
At present, Jasa Marga is involved in all toll road projects,
whether as part of a joint venture or as the sole constructor.
The bill requires the establishment of an agency called the
Toll Road Regulator Agency (BPJT) specifically tasked with
regulating and supervising the toll road sector. However, the
agency will remain under the auspices of the Ministry of
Settlements and Regional Infrastructure.
BPJT is expected to be set up within 12 months after the
endorsement of the bill.
The bill is also expected to resolve problems in determining
toll fees, which will enable investors to draw up a plan as early
as possible in order to calculate the fiscal feasibility of the
project.
However, the government will still hold the rights to decide
the interim toll fees and concession rights based on input from
the toll operators. The fees will be reviewed and evaluated every
two years with adjustments for inflation.
Some key articles of the highway bill
1. Toll Road Regulator Agency (BPJT) is tasked with:
- Recommending interim toll fees to Minister of Settlements
and Regional Infrastructure.
- Taking over toll roads after the concession period expires.
- Providing facilities for investment and land clearance.
- Supervising highway operations and services.
2. The government will take over the construction of toll roads
or its operations in order to ensure its sustainability, if
later in the development process the toll operator
encounters constraints, which cannot be settled.
3. Toll concessions will be given to companies based on
a transparent tender process.
4. Toll operators should provide alternative highways if the
construction of its toll roads will have a possibility of
disturbing the existing highways.
5. The government will have the right to revoke the titling of
private land and registers it under the ownership of the
state, unless the landowner agrees to the compensation
offered based on the existing regulations on land ownership.
6. Any individual or institution that intentionally disrupts the
construction or operation of the highways will be penalized
with a maximum of an 18-
month imprisonment and/or a fine of Rp 1.5 billion
(some US$166,000).
7. Any individual or institution that unintentionally disrupts
the
the construction or operation of the highways will be
penalized with a maximum of
three months in prison and/or a fine of Rp 300
million.