Private sector backs road toll increases

Private sector backs road toll increases

The Jakarta Post, Jakarta

The private sector has expressed support for the government's
move to increase road toll rates on the condition that the
increase is based on sound economic calculations and not
political pressure.

"Such a move is needed as investors need certainty to
calculate the projected revenue on their investment," the
Indonesian Chamber of Commerce and Industry (Kadin) chairman
Mohamad S. Hidayat said.

He said that the government should give its assurance that the
rates were set based on economic, not political, considerations
in a bid to attract fresh investment to the country's ailing
infrastructure.

Investors have been somewhat reluctant to invest in
infrastructure projects such as toll roads, power, water and
ports as rates that are determined by the politically climate
pose a high risk on their return on investment.

Hidayat, however, said that according to Law No. 38/2004 on
roads, the government could make adjustments to toll rates
through a ministerial regulation without legislators'
endorsement.

The government raised road toll rates on Tuesday at 9 p.m.

State toll road operator PT Jasa Marga president director
Syarifuddin Alambai said Minister of Public Works Djoko Kirmanto
had signed the ministerial regulation on the toll rate hike
earlier in the day.

"The minister signed it (the regulation) this morning
(Tuesday) and it will take into effect at 9 p.m.," he said as
quoted by Antara.

He added that there would be an average increase of 16
percent.

However, public transportation vehicles are entitled to a 25
percent discount if they subscribe to monthly toll tickets, with
the exception of taxis.

Djoko said on Monday that Jakarta's city toll rate would
increase by Rp 500 (51 U.S. cents), which would mean an increase
from Rp 4,000 to Rp 4,500 for private cars.

He acknowledged there have been many complaints about the poor
services provided by toll operators and questions as to whether
the increase in the rates was appropriate.

Nevertheless, toll road operators had submitted their plans to
improve their services including a plan to open new toll gates to
ease congestion.

Djoko said his ministry would issue a warning to toll road
operators if they failed to fulfill their promise to improve
services.

The law on roads and Government Regulation No. 15/2005 on toll
roads stipulate that road tolls shall be raised every two years
to adjust to inflation.

The last increase was in June 2003.