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)