Government to build three toll roads via PPP deals
The government is establishing public private partnerships (PPP) to develop three toll roads worth Rp 9.4 trillion (US$780.2 million) that are listed as priority national infrastructure projects aimed at boosting regional economic growth and increasing connectivity.
The projects are a 15.8-kilometer Medan–Binjai road in North Sumatra, a 37.6-km road in Malang–Pandaan in East Java and a 39-km Manado–Bitung road in North Sulawesi.
“We are hoping that these projects will enter the tender process next year so that we can begin the construction in 2015,” said Public Works Ministry’s Toll Road Regulatory Agency (BPJT) head Abdul Gani Ghazali on Thursday.
He said that the North Sumatra toll road was important to expedite the flow of palm oil and plantation products from Binjai to Medan and to ease traffic congestion in Medan.
Meanwhile, the Malang–Pandaan road will help support growing trade, industry and tourism between Surabaya and Malang.
This toll road was also seen as a significant section as it would improve connectivity in East Java.
“Just like the other two projects, the Manado–Bitung toll road will play an important role to help support the planned Bitung Port and Bitung Economic Zone in the future,” Gani said.
According to the government’s Master Plan for the Acceleration and Expansion of Indonesia’s Economic Growth (MP3EI) program, Bitung Port would become an international hub in eastern Indonesia.
State-owned port company PT Pelabuhan Indonesia (Pelindo) IV is currently expanding the port’s terminal and its berthing facility to help accommodate more container traffic.
In addition, Gani said that the construction of the three toll road projects would be finished by the end of 2017 if everything went according to plan.
He said that the central government had policies aimed at accelerating the development of infrastructure projects, such as providing viability gap fund and assisting with land acquisition.
The Public Works Ministry has been conducting land acquisition along the Malang–Pandaan and Manado–Bitung corridors since the second half of this year and the acquisitions are 10.28 percent and 44.05 percent completed, respectively, as of today.
Based on BPJT data, there are 784 km of toll road in the country located in Sumatra, Java, Bali and Sulawesi.
The government has indicated its intention to increase the country’s total toll road network to 5,405 km in the future.
Meanwhile, National Development Planning Board (Bappenas) PPP development director Bastary Pandji said that potential toll road projects in Indonesia that had yet to be developed were worth Rp 2 quadrillion (US$166 billion) and the government needed to acquire 20 percent of the financing from the private sector.
Bastary said that the 20.9 km Solo–Kertosono connecting Central and East Java and the 12 km Nusa Dua–Ngurah Rai–Benoa in Bali were two successful toll road projects that used PPP arrangements.
