Jasa Marga told to delay key bond plan
Jasa Marga told to delay key bond plan
Rendi A. Witular, Jakarta
State toll road operator PT Jasa Marga will have to delay its
plan to issue Rp 10 trillion (about US$1.11 billion) worth of
bonds later this year as the Capital Market Supervisory Agency
(Bapepam) refuses to give its approval to it until a key bill on
toll roads has been endorsed.
The delay in the issuance of the bonds is likely to hamper the
development of some toll road projects, which experts say are
vital infrastructure for economic development.
"Bapepam has yet to approve the plan ... We have projected
such a move will delay the construction of (toll) roads since
there will insufficient funds to finance the projects," Minister
of Infrastructure and Regional Settlement Soenarno said recently.
Soenarno said Jasa Marga initially planned to issue the bonds
in October or November, with proceeds from the bonds expected to
be received by the company in late November.
The bonds, which will mature in five to seven years, will be
issued in the form of asset-backed securities -- a type of bond
based on underlying asset pools. Through such a scheme, the toll
road projects run by the company will be used as collateral.
Proceeds from the bonds would be used to fund 14 of Jasa
Marga's toll road projects, which include the completion of the
Jakarta Outer Ring Road and the Padalarang to Bandung, Semarang
to Soloand and the Cikampek to Cirebon projects.
The roads are part of a 1,486 kilometer toll road that will
link Merak in Banten to Banyuwangi in East Java, at a total cost
of about Rp 86 trillion, with completion scheduled for 2009.
The Rp 10 trillion bonds are the first tranche of a series of
bonds planned by the government to finance the projects.
Bapepam bureau chief for investment management and research
Freddy Rikson Saragih said the capital market watchdog had not
yet given clearance for Jasa Marga to issue the bonds, pending
the endorsement of the highway bill currently being deliberated
by the government and the House of Representatives.
"There is uncertainty about the company's operations. This is
not good for investors. We have seen that the uncertainty can
only be addressed if the House and the government endorse the
highway bill," Freddy said.
Freddy said the bill aimed to separate Jasa Marga's current
role both as regulator and operator of the country's toll road
sector, a move that may impact Jasa Marga's current projects and
future revenue.
Another uncertainty factor for investors is linked to land
clearing for toll road projects, which in the past had often
caused major delays in toll road development due to resistance
from nearby residents and protests from landowners
"The highway bill is expected to address those problems, and
we have to wait for its endorsement. But at the same time we will
try to seek clarification from Jasa Marga about these issues in
order to ease the uncertainty," Freddy said.