Toll increase deemed inevitable by Jasa Marga

Toll increase deemed inevitable by Jasa Marga

JAKARTA (JP): While indicating the company's increasing
maintenance expenses, executives of state toll road operator PT
Jasa Marga hinted on Thursday the need to simultaneously increase
tolls by 30 percent.

"I'm not threatening the public, but continuously increasing
maintenance expenditure is the condition at the moment," said the
company's operational director, Marijanto.

"But we'll continue to provide the toll service even if the
House of Representatives (DPR) rejects the proposed hike.
However, toll road conditions will deteriorate further," he
added.

Marijanto was speaking before participants of a public hearing
on turnpike tolls, organized by the Jakarta chapter of the
Indonesian Transport Society (MTI) at the Bidakara office complex
on Jl. Gatot Subroto, South Jakarta.

He said the extremely high combined inflation rate of 144.4
percent was a determining factor in the proposed increase and
that the toll was last hiked in 1996.

"The combined inflation rate method in establishing tolls is
used by toll road operators worldwide," he said.

The company's development and commerce director, Frans S.
Sunito, reminded the participants that the construction of toll
roads was to enable the central government to establish more
infrastructure nationwide.

"We construct toll roads only at areas where the residents can
afford to pay the tolls, so the state funds can be allocated to
other construction projects," he said.

"Meanwhile, revenue from the toll roads can also be used to
construct new toll roads or other types of infrastructure," he
added.

Noted economist Syahrir, however, lambasted the use of the
Consumer Price Index (CPI) in deciding the new tolls while
questioning the company's efficiency.

"It's somewhat excessive to use the combined inflation rate in
deciding the toll hike.

"Besides, the company booked a net profit during the peak of
the economic crisis in 1998. So it doesn't need to increase the
toll," he said.

Frans said Jasa Marga booked an income of Rp 775 billion (US$
103.3 million) with a profit of Rp 179 billion in 1998.

"However, only some Rp 22.9 billion has been used for
maintenance. About Rp 72 billion has gone to the government's
purse and some Rp 39 billion has been used to pay our debts," he
said.

Profit

Meanwhile, the 1999 profit is estimated to be Rp 144 billion
before the audit, he added.

Member of the Indonesian Consumers Association (YLKI) board of
patrons Zoemrotin K. Susilo said it would be unfair to the public
if Jasa Marga hiked the toll without first improving its
management performance and service to turnpike users.

"The public will reject the planned increase if Jasa Marga
can't show any improvement," she said, while urging the company
for financial transparency.

She asked about the possibility of opening the Jagorawi toll
road to drivers for free.

"The Jagorawi toll road must have reached its breakeven point.
Jasa Marga should let people use the toll road for free," she
said.

Frans, however, rejected the proposal.

"Who will pay for the maintenance and other overheads then?
Besides, the government needs the money to build other kinds of
infrastructure," he said.

He said most toll roads needed 20 to 25 years to achieve
breakeven point.

"Residents must also realize that not all toll roads are
profitable," he said, citing the Belmera toll road in Medan,
North Sumatra, and the Semarang toll road in Central Java which
are still subsidized by the company's profitable toll roads.

Marijanto defended that the company needed more investment for
toll road maintenance.

"The more cars using the toll roads, the more investment we
need to construct new toll gates, widen the roads or hire new
employees," he said.

"It's also impossible to see an instant improvement once we
hike the toll. We need at least a year to achieve it," he added.

Frans told reporters after the hearing that Jasa Marga was now
renegotiating contracts with investors at seven toll roads.

"If completed, the renegotiations could save up to Rp 200
billion ($ 26.6 million).

"We have reported the progress of the renegotiations to State
Minister of Public Works Rozik Boedioro Soetjipto. It's up to him
now," he said.

He said the lane width reduction of a toll road construction
project by Citra Marga Nusa Phala (CMNP) was from 3.5 meters to
3.25 meters.

"Technically, there's no problem at all. We, however,
requested that CMNP recalculate its investment plan," he said,
while adding that up to Rp 40 billion could be saved.

"We'll also try to increase our toll revenue. Then we'll be
able to improve our service," he added.

German investors

Separately, Rozik told reporters that a number of German
investors had stated their interests in becoming involved in the
construction of the third phase of the Jakarta-Serpong toll road.

"They're interested in the toll road construction because a
number of German government-operated buildings -- the German
Centre, the German School and the future German University --
are located in the Bumi Serpong Damai (BSD) housing complex,
which lies in between the toll road," Rozik said as quoted by
Antara on the sidelines of a visit to the toll road construction
site, along with German Ambassador Heinrich Seemann.

The third phase of construction will cover a 3.4-kilometer
toll road from Viaduct Bintaro to Ulujami. (nvn/imn)