Marga Mandalasakti to build two more toll roads

JAKARTA (JP): PT Marga Mandalasakti, the builder of the 72- kilometer Tangerang-Merak tollway in West Java, has been assigned to construct two more toll roads in the province at a total cost of Rp 520 billion (US$222 million).

The company's director, M. Idris Ranadipura, said yesterday that his company has secured government licenses to build the two tall roads, comprising a 60-kilometer tollway from Cilegon to Labuan and a 13-kilometer road from Cilegon to Teluk Banten.

"The establishment of the Cilegon-Teluk Banten toll way is to support the planned Teluk Banten container terminal, which will be built next year," Idris was quoted by Antara as saying.

The Cilegon-Labuan tollway is to accommodate the growing tourists from Jakarta to Labuan, Idris added.

He explained that his company is currently conducting a feasibility study on the new projects and plans to start their construction by the end of next year.

The Rp 520 billion total cost consists of Rp 420 billion for the Cilegon-Labuan toll road and Rp 100 billion for the Cilegon- Teluk Banten tollway.

"The financing for the construction of the two toll roads will come from equity and also from loans," Idris said after signing an agreement between his company and securities firm PT Makindo on the subscription of his company's new shares worth Rp 175 billion and convertible bonds worth Rp 175 billion.

Minister of Public Works Radinal Moochtar witnessed the signing of the agreement.

Idris said the funds raised from the share and bond issuance will be used to finance the construction of the two toll roads and also to repay the company's debts.

Gunawan Jusuf of PT Makindo explained that a number of investors were committed to subscribing to the shares and convertible bonds. They include Asian Infrastructure Fund Adviser Ltd., Williams Companies and Garuda Investment Fund.

Idris said his company needs long-term funds to finance its debts, especially short-term debts, because investment recovery in the building of toll roads can range from seven to 12 years.

Marga Mandalasakti has spent Rp 650 billion on constructing the 72-kilometer Tangerang-Merak toll road.

The company is controlled by a consortium grouping PT Humpuss, PT Hanurata COY Ltd., state-owned pension fund firm PT Taspen, toll road operator PT Jasa Marga, state-owned steel manufacturer PT Krakatau Steel, state-owned workers insurance firm PT Astek and the Sarana Wana Jaya Foundation. (rid)