TRANS-SUMATERA TOLL ROAD: Two Segments

March 27, 2015, Bisnis Indonesia, Page 30

JAKARTA – The government will provide construction support for the Bakauheni – Terbanggi Besar and Terbanggi Besar – Kayu Agung toll road segments, along 324km, which become parts of the Trans-Sumatera Toll Road.

Minister of Public Works and People’s Housing (PU-PR), Basuki Hadimuljono, said that the reason for the government to give construction support is that because the two segments are considered to have not been financially viable.

“For those Trans-Sumatera segments whose IRR [Internal rate of return} is still below 12 percent, the government will provide construction support so that they can be vable for investors,” he said, Monday (23 march)

Basuki reiterated that the construction support will still be given, even though the government plans to synergise the construction sector state-owned enterprises (BUMNs) Karya in the construction of all the toll road segments of the Trans-Sumatera.

“The Construction support is given not because the assigned BUMNs have funding problems, but, instead, the government does have an an obligation to provide support to any toll riad segments whose IRR is deemed to be below the feasibility level,” he said.

INVESTMENT COST
Based on data from the ministry of PU-PR, the amount of funds needed by the government to build the two segments reaches Rp 16,48 trillion. The calculation is obtained from the results of a feasibility stydy that has been done. The cost of needed investment to build the Bakauheni – Terbanggi Besar segment along 138 km is Rp 16,49 trillion.

From the results of the feasibility study, thus segment recorded an IRR of 10,41 percent. In order for the IRR of this segment to reach 12 percent annd be declared financially visible, then the funding support needed is 68 percent, or Rp 6,54 trillion.

Meanwhile to build the 186km-long Terbanggi Besar – Kayu Agung segment, the cost of investment required is Rp 22,13 trillion. The IRR on the segment is recorded at 9,78 percent, so that an 80 percent funding support is needed, or Rp 9,94 trillion, in order for the IRR to achieve 12 percent.

Interim Director General of Highways of the Ministry of PU-PR, Djoko Murjanto, said that the government has allocated Rp 4 Trillion in the 2015 Budget Implementation List (DIPA) of the Ministry of PU-PR.

The funds will be used to build a number of toll road segments that get the government’s construction support, such as Cileunyi – Sumedang – Dawuan (58,5km), Solo – Ngawi (90km), Ngawi – Kertosono (87km), Bawen – Solo (49,81km).

Then, there are Medan – Kuala Namu – tebing Tinggi (61,7km), Balikpapan – Samarinda (99,4km), Manadoo – Bitung (39km), as well as Bakauhenni – Terbanggi Besar (138km) and Terbanggi Besar – Kayu Agung (186km).

Nevertheless, he asserted there is no specific budget allocation for each segment. According to Djoko, the Rp 4 trillion funds will be disbursed for any toll road segments that are considered ready from the land side.

“The funds will be channeled to those segments that are ready to be worked on. Now, there are already some segments, but the distribution is still waiting for the budget disbursement from the Ministry of Finance,” he said.

Interim Director General of Regional Development of the Ministry of PU-PR, Hermanto Dardak, stated the Trans-Sumatera toll road construction programme is divided into two stages.

In  the first stage, the government will build access riads as connectors to industrial areas, special economic zones, and potentioal areas that lie in Sumatera and Java through the Merak – Bakauheni – Bandar Lampung – Palembang and Tanjung Api-Api (MBBPT) area.

“The roads that will be built along this MBBPT area will later be connected to ports and airports, so that the transit access or distribution of logistics services can be more easily done and investment growth is expected to increase,” he explained.

Meanwhile, for the second stage, the toll road construction will be focused on the metropolitan regions that connect major cities in Sumatera, such as the Medan – Binjai, Medan- Kuala Namu – Tebing Tinggi segments, and also Pekan Baru -Kandis – Dumai Segment.

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