Jasa Marga makes higher toll charge for mudflow diversion

State toll road operator PT Jasa Marga will apply higher tariffs to the planned new toll road in East Java, a relocated lane of the Surabaya-Gempol highway inundated by the Lapindo Brantas mudflow, to cover the Rp 1.5 trillion (US$130.5 million) cost of new road construction.

Jasa Marga president director Frans S. Sunito said Wednesday that the special tariff, at between Rp 500 to Rp 600 per kilometer, was set to protect the company's business performance. The normal toll road tariff is Rp 120 per kilometer.

"*The Rp 1.5 trillion budget* will not hurt our business performance. We have finished with the calculation and we concluded that the new tariff will be feasible," he said, adding the new rate also included inflation and other parameters.

The relocated route will cover a total of 12 kilometers in the southern part of the existing toll road. The Sidoarjo Mudflow Handling Agency (BPLS) has cleared up 60 percent of the land needed for the new road.

Part of the Surabaya-Gempol toll road was inundated by the mudflow from the gas well operated by Lapindo Brantas since 2006. The company is controlled by the family of Aburizal Bakrie, also the Coordinating Minister for Social Welfare.

In a surprise move, the government told Jasa Marga to embark on the toll relocation project using the company's own cash, although the mudflow, which led to toll road closure, had disrupted Java traffic.

The government owns 70 percent of the shares in Jasa Marga.

However, the relocation plan initially got negative reactions from the market over worries it would hurt Jasa Marga's performance, even more so as the company had incurred losses of more than Rp 100 billion, due to the toll road closure.

But Jasa Marga believes the project will bring benefits for the company in the years to come, even though the budget for the diversion project increased seriously above the original 2006 target.