Mandiri to disburse Rp 6.7t for infrastructure projects in 2005
Leony Aurora, The Jakarta Post, Jakarta
The country's largest lender Bank Mandiri is set to disburse Rp 6.7 trillion (US$722.14 million) of credits for infrastructure projects this year as part of its commitment for the next five years.
Mandiri president director ECW Neloe said on Monday that after reviewing projects offered by the government in toll roads, airports, seaports, telecommunications and others, the bank was prepared to provide about Rp 38 trillion of funds until 2009.
"That's our current analysis, but it may develop in the future," he said.
One of the receivers is toll operator PT Jasa Marga, which on Monday inked a deal of Rp 300 billion in loans to be repaid within five years.
The loans, with a fixed interest rate of 11 percent for the first two years, will finance the constructions of three sections of the Jakarta Outer Ring Road (JORR), which in total is expected to cost Rp 1.5 trillion.
Jasa Marga will provide some 15 percent of the cost from its internal funds and will finance the rest with the proceeds of its bonds sale in late 2003.
Since the Infrastructure Summit in January, the government has been trying to market its projects to investors.
The central bank last month announced new policies, which ease legal lending limit requirements up to 30 percent of a bank's capital from the previous 20 percent.
Neloe said that toll road projects were lucrative as they had a predictable cashflow -- toll fees were rarely, if ever, lowered.
The projects also had a sustainable competitive advantage compared with other businesses, as it was impossible to have more than one toll road going from one destination to another, he said.
Jasa Marga's president director Syarifuddin Alambai said the state company has already secured four other toll road projects of 192.5 kilometers in total worth about Rp 10 trillion.
The toll roads, which will begin construction next year, are between Cikampek and Palimanan in West Java, from Semarang to Surakarta in Central Java, Gempol to Pasuruan in East Java, and the Bogor ring road, south of Jakarta.
Alambai said the company had yet to determine the financing for the projects. Usually 30 percent of the funds needed for a project is taken from internal funds while the other 70 percent comes from outside sources like banks and bond issues.
In September, the Capital Market Supervisory Agency refused to approve Jasa Marga's plans to issue Rp 10 trillion of bonds, pending the completion of the highway bill that will separate the company's roles as toll road regulator and operator.
The government also rejected the company's plan to hold an initial public offering (IPO) last year.
"Whether we'll conduct IPO now or later depends on government's policies," Alambai said. He would not say when a IPO was planned.