Road tolls to increase by 15 percent

Road tolls to increase by 15 percent

Rendi A. Witular, The Jakarta Post, Jakarta

The government plans to raise tolls for roads across the country
by an average of 15 percent next month, in a move to keep
investment in toll roads competitive amid higher inflation rates
and operational costs.

The rate increase, however, will only effect tolls that have
not been adjusted in more than two years, Minister of Public
Works Djoko Kirmanto said on Tuesday after a ceremony at the
presidential palace.

"The prevailing law and regulation on roads accommodates an
adjustment in tolls. We had planned to raise them in June, but
had not yet finished calculating the new rates. We are expecting
the increase to take effect in August," said Djoko.

Based on Law No 38/2004 on Highways, the evaluation and
adjustment of tolls should be conducted once in two years based
partly on the inflation rate.

Djoko said that with the new tolls, toll road operators were
expected to be able to cope with higher operational costs and
inflationary pressure.

A team consisting of experts from the Ministry of Public Works
will determine the new tolls based on inflation rates nationwide,
meaning that the rate increase will vary from city to city.

"For example, the increase in Surabaya will be higher than in
Makassar because the inflationary pressure in Surabaya is greater
than in Makassar" said Djoko.

The last time the government raised tolls was by an average of
25 percent in June 2003.

However, the policy excluded tolls for the Jakarta-Cikampek
section, the Sedyatmo section -- which connects Jakarta with the
Soekarno-Hatta International Airport -- and the Jagorawi section.

The rates for the Jakarta-Cikampek section were raised in
January last year, while tolls for the Sedyatmo and Jagorawi
sections have remained unchanged since they were introduced in
1992.