Toll road tariff hike rejected by govt

JAKARTA (JP): The government rejected on Wednesday a proposal from toll road operators to increase toll tariffs.

Minister of Public Works Rachmadi Bambang Sumadhijo said the tariff would not be raised for the duration of the current cabinet.

"We have agreed with the House of Representatives not to raise the rates because it will place a heavy burden on people. So, there will be no increase until the present Cabinet's term finishes (mid-November)," he said during a hearing with the House Commission IV for public works and transportation.

Toll rates were last raised in June, 1996 by Rp 500 (about 5.8 U.S. cents at the current rate) to a range of between Rp 2,000 and Rp 5,000 depending on the distance.

Commission chairman Burhanuddin Napitupulu said House members understood the difficulties that toll road operators were experiencing with soaring maintenance and other operation costs.

"We understand the importance of a rate increase for toll operators. But they have to understand that it is difficult to raise tariffs in the current economic crisis."

"We urged toll road operators to help shoulder these burdens during the continuing crisis and wait until the situation returns to normal," Napitupulu said.

Toll road operators asked the government on Tuesday to adjust toll road rates to offset soaring maintenance costs as the impact of the sharp depreciation of the rupiah.

They also said that as a result of the crisis, the number of toll road users plunged in 1998, leading to a drop in toll road revenues.

Operators said that higher toll road tariffs would be necessary to improve toll road services.

Siti Hardiyanti Rukmana, president of publicly listed private toll road operator PT Citra Marga Nusaphala Persada (CMNP), told the House commission at a hearing on Tuesday that tariffs for Indonesian toll roads were the lowest in Asian countries.

Hardiyanti, popularly knows as Tutut, the eldest daughter of former president Soeharto, proposed that the government adjust toll road rates to boost business investor confidence.

During her father's rule, Hardiyanti always got any toll road tariff increase she and other operators asked for because the rates, according to the law, are based on presidential decree.

Private investors are permitted by the government to build and manage toll roads in joint operation with state-owned toll road operator PT Jasa Marga.

Operators have urged the government to set toll-road tariffs on the basis of ministerial decree instead of presidential decree but Rachmadi turned down the request as such a change required amendments to the law.

Minister Rachmadi said the government would introduce a new, transparent procedure to adjust toll fares in the future, which would take into account the interests of both investors and consumers.

"The mechanism will be adjusted periodically in line with developments in the country's economic situation. But any change in the toll rates will still be based on a presidential decree," he said. (gis)