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Government Support in Accelerating Development of Toll Road Projects in Sumatra

Government Support in Accelerating Development of Toll Road Projects in Sumatra

The government continues to support economic distribution and welfare improvement by accelerating infrastructure development throughout Indonesia. One of them is toll road project in Sumatra region through Presidential Regulation No. 117 of 2015 amendment to Presidential Regulation No. 100 of 2014 The government commissioned Hutama Karya to build mega project on Trans Sumatera Toll Road.

With a total investment value of 81 Trillion, Hutama Karya manages 8 toll roads in Sumatera, such as Bakauheni Toll Road - Terbanggi Besar which is still in construction stage of 83.75%, Highway Toll Road - Pematang Panggang - Kayu Agung with Progress construction of 65.17%, Palembang Toll Road - Simpang Indralaya with a progress of 93.13%, Pekanbaru - Dumai Toll Road 8.66%, Medan - Binjai Toll Road of 91.93% and Kuala Tanjung Tebing Tinggi Highway - Parapat, Banda Aceh - Sigli Toll Road and Padang - Pekanbaru Toll Road are still in the early stages of construction. (data as of July 10, 2018)

"The development of Sumatera Toll is done by different approach. In the previous pattern, toll road construction is done in the already developed area because it requires a return on investment. But the presence of toll on the island of Sumatra which has great economic potential is needed to reduce logistics costs and improve the competitiveness of Indonesian products, "said Head of Toll Road Regulatory Agency Herry Trisaputra Zuna in Media Gathering event in Jakarta, Wednesday (11/7)

The head of BPJT explained that the potential is large and the area is also wide. The construction of toll roads is expected to accelerate the development of the region on the island of Sumatra both in the long term 20 years, as well as short term within the next 5 years, "said Head of BPJT.

"In terms of average daily traffic volume (LHR) is still low, so when offered to investors will be less attractive because the margin is low. Therefore, the assignment scheme is applied to PT Hutama Karya on behalf of the government to realize Trans Sumatra Toll Road. "Said Head of BPJT

The Government always holds the principle of prudence and provides full support through the addition of State Equity Participation (PMN), the support of construction and asset securitization, and the granting of government guarantees. In 2015 and 2016 the Government has provided a total of 5.6 Trillion PMN. The addition of PMN is planned to be given back in 2019, in addition the Government has awarded a concession contract on the Section S (S JORR S) Outside Jakarta Outer Ring Toll Road to PT. Hutama Karya as theunderlying asset / revenue for the issuance of the next bond / loan.

The government believes that the toll road project in Sumatera not only increases connectivity and access to transportation and logistics in Sumatra but is also expected to provide economic benefits and positive impacts on other sectors. Also attending the event were Members of BPJT Elements of Professors Koentjahjo Pamboedi and Head of Risk Mitigation Sub-Directorate of State Budget of Riko Amir.

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