Radinal faces opposition over toll road tariff hikes

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)