Radinal faces opposition over toll road tariff hikes

JAKARTA (JP): Minister of Public Works Radinal Moochtar reiterated to the House of Representatives yesterday the need for increasing the toll road tariffs to attract new investments and to enable the upgrading of existing toll road services.

However, members of the House Commission on Public Works disagreed on across the board increase in tariffs, suggesting that higher tariffs be set only for new toll roads.

Sofyan Usman, a member of the commission, suggested at a hearing with Radinal that PT Jasa Marga, the state-owned company in charge of managing Indonesia's toll roads, set higher rates only for newly-opened toll roads.

"But old toll roads also need larger investments to improve their services and safety and to finance their expansions," Radinal argued.

H. Ali Marwan Hanan, another member of the commission, said that the tariffs of old toll roads should instead be lowered because the investors not only had recouped their capital but also had made handsome profits.

"I agree that the government is authorized to review the toll road tariffs every two-years, but that does not automatically mean increasing the tariffs," Ali later told newspeople.

The government has allowed private investors to build and manage toll roads but the toll rates are set by the government on the basis of a presidential decree.

Radinal admitted that many people often complained about the service, safety and traffic jams on toll roads.

"We see the complaints as a strong reason for larger investments to improve the service on toll roads," he said.

But Radinal declined to mention when an increase would be introduced.

"It will depend entirely on the President's decision and not on me. I do not even know when the President will decide on new tariffs," he said.

However, Ali regretted the fact that the House members and the government seemed to look at the toll road tariffs from different perspectives.

"That happens due to an unclear mechanism for the determination of the toll road tariffs," he said.

Siti Hardiyanti Rukmana, the president of PT Citra Marga Nusaphala Persada, the private investor in the tollway between Cawang and Tanjung Priok in Jakarta, recently proposed that the rates be raised by between 25 and 50 percent to help it increase revenues for loan repayment.

Citra Marga, which is listed on the Jakarta Stock Exchange, is 22 percent-owned by Yayasan Purna Bhakti, 17.78 percent by Jasa Marga, 13.2 percent by PT Bhaskara Duniajaya, 8.89 percent by state-owned steel company PT Krakatau Steel, 8.8 percent by PT Indocement Tunggal Prakarsa, 4.4 percent by Citra Lamtoro Gung Persada, 0.5 percent by cooperatives and 24.4 percent by the investing public.

The government raised toll road tariffs in July 1992 by between 20 percent and 50 percent. (31)