KL investor eyes Rp 6 trillion toll road project
KL investor eyes Rp 6 trillion toll road project
JAKARTA (JP): Malaysia's DRB-Hi Com is considering financing
the long delayed construction of the Rp 6 trillion (about US$674
million) worth Jakarta Outer Ring Road (JORR) project, state-
owned toll road company PT Jasa Marga said on Thursday.
Jasa Marga president Wiyoga Adiwasito said the Malaysian
company had signed a memorandum of understanding early this year
and he hoped the work on the toll road project would resume next
year.
"The entrance of the investor is expected to accelerate the
completion of the project," Wiyoga said in a written response
during a hearing with the House of Representatives' Commission IV
for infrastructure and transportation affairs.
He said Jasa Marga revoked the 35-year concession rights of
JORR's former three operators after they defaulted on their
debts.
JORR's initial operators were PT Citra Mataram Satriamarga
Persada, PT Marga Nurindo Bhakti and PT Citra Bhakti Margatama
Persada. They obtained the contract from Jasa Marga to operate
the toll road under a Build-Operate-Transfer (BOT) scheme long
before the crisis hit the country in late 1997.
The three investors financed the project with loans worth Rp 1
trillion from local banks. The loans turned sour after the
government suspended JORR's development in 1998.
The Indonesian Bank Restructuring Agency (IBRA) took over the
nonperforming loans extended to the three companies from the
nationalized banks.
Wiyoga said IBRA and Jasa Marga then formed a joint venture,
called New Co, to continue the project.
Jasa Marga's director of operation Marjanto said New Co was
founded to accommodate the assets that belonged to IBRA and Jasa
Marga.
Jasa Marga and IBRA will convert their loans into equity in
the new company, although the composition of ownership are still
being negotiated, he said.
New Co, he went on, would then operate the project but must
first seek investors.
However, Marjanto warned that it was not easy to find
investors interested enough to enter the toll road industry.
Tariff
He said a major constraint in attracting investors to finance
toll road projects was the uncertainty over tariff rates.
"When can we raise tariff rates, on what basis can we raise
them? These require regulation, otherwise how can investors
calculate their income?," he said.
Under the current government regulation No 8/1990, the
president approves a tariff hike under the recommendation of the
minister of transportation.
Marjanto said the last the government raised toll tariff rates
was nine years ago.
"Considering the inflation rate, we expect a hike of about 30
percent," he said.
He said because of this uncertainty, the Malaysian investor
was still hesitant to join the JORR project.
Jasa Marga and the government, he continued, were working on
clarifying the regulation on tariff hikes.
"We then hope construction will start sometime in mid-2001,"
he added.
Wiyoga said under an improved investment climate next year,
the company planned to resume several toll road projects that the
government had suspended.
These include the construction of the Cikampek-Padalarang toll
road in West Java, the Surabaya-Gresik toll road and the toll
road in Ujung Pandang.
In 1998, the government suspended developments of several
large infrastructure projects as part of its retrenchment program
to cope with the economic crisis.(bkm)