Some time ago policy makers in this country identified the need to develop a framework for the Trans Java Highway Network: a high standard toll-way connecting cities along the North Coast corridors of Java Island.
Why Java? Without underestimating the economic role of regions outside the island, mobility within Java is considerably important. Passenger movements constitute a large fraction of the total national passenger flows, while vehicles using the freight routes make up more than three-quarters of national figures.
It is not surprising then that trade in Java has contributed a sizeable chunk of the Gross National Product (GDP) and looks like it will continue to do so in the future.
A number of issues, however, must be addressed before a solid plan for developing this road and transport network can be put on the table.
First, it must be emphasized that transportation networks are essentially required to transport goods, services and people within any society.
Effective and operational transport infrastructure is therefore necessary for growing economies and should be reflected in the framework for developing the Trans Java network.
The development of toll roads must be treated as a necessary complement to the existing roadway network and be seen as an effort to provide an alternative and more rapid route for all motorists.
Secondly, the Trans Java services should only be made available to those willing to pay a little extra for a faster journey, while those who do not wish to pay can alternatively use the regular network.
It is not acceptable however to replace all the existing routes and non-toll roads with the new Trans Java network, thereby forcing motorists to use the more expensive, sole transport network.
The underlying premise of the Trans Java operation is that an option exists for motorists to choose between toll roads and regular free routes when traveling to all destinations nationwide.
Thirdly, highway facilities exhibit economies of scale and large sinking costs. Services with these characteristics have marginal operating costs that run lower than their average costs, meaning the low turnover value does not attract potential investors. If a subsidy was called for the construction of these roads, then the project could become a publicly owned investment.
Fourthly, in order for passengers and freight to move efficiently from origin to destination, Trans Java should be framed in the context of developing an integrated transportation system that could incorporate land, sea, rail and air transportation modes.
With these four considerations taken into account, Trans Java must be a solution to transportation problems in Java. Interconnection between the highway network and other transportation networks must be designed with the objective of lessening the operating costs of inter-island movement.
The Java Arterial Roads Network Study (2001) concluded that sections of Trans Java are likely to be unfeasible until (2010), when traffic along the corridor increases substantially.
In addition, not all sections are financially viable for development, even though they are economically feasible.
Investment along sections in the corridor where traffic flow exceeds 30,000 vehicles per day could be financially viable and, thus, of potential interest to private investors. Approximately 30 to 40 percent of the corridors may be attractive for private investment.
For sections that are not financially viable, but are economically feasible, the intervention of the government through, PT Jasa Marga, is recommended so they can assist with the construction.
For those sections along the corridors which are neither financially nor economically feasible, a subsidy scheme would be needed and mechanisms by which proper public financing could be secured for the construction should be explored.
Untangling Trans Java is therefore a necessity. There are sections that can be competitively offered to the private sector and aspects that must be developed by the government.
This separation can provide a synergy by which a scheme of public-private partnership can be efficiently realized, and provide a network with a high level of service connecting a number of important cities on the island.
This unity, however, will depend on the sequence of highway section development. The sections that are close to urban areas, with a large pool of potential motorists who are willing to pay toll, they should be developed first.
It is also more likely private investors will pump money into these projects in the initial phases. For sections that are situated in rural areas and likely to generate interest from big business, they should be developed later with government assistance.
The development of the Trans Java network will require tremendous resources, both in terms of financing and manpower. It will be a large-scale undertaking and demand a sophisticated thought process on how to effectively frame the development process.
Unlike the costs to build normal roads, the investment needed for developing a high standard limited access highway is incredibly large.
For that reason, a supportive toll pricing policy should be established to enhance the attractiveness of the toll road industry. This policy should reflect the true cost of providing highways but not excessively burden travelers.
A rule such as "cap pricing" or "rate of return" needs to be explored. There is a need to establish rules enabling automatic adjustment of toll rates using appropriately structured formulas.
Both the level and the adjustment of toll rates should be locally specific and, thus, not the same across Java.
Due to the complexity of the investment and the urgent need for better land transportation facilities along the North Coast, it is necessary that the concept of Trans Java development be formulated as soon as possible.
The writer is the Director for Energy, Mineral Resources and Mining at the National Development Planning Agency (Bappenas). This is a personal opinion.
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