Toll road construction to start in Q3

The Jakarta Post ,  Jakarta   |  Sat, 07/04/2009 1:05 PM  |  Business

State toll road builder and operator PT Jasa Marga expects to finally commence the construction of a cluster of new toll road projects in the third quarter of 2009 after many delays, especially in respect of land clearance.

President director Frans Sunito told reporters on Friday that it had sought government assistance on land clearance and this was likely to yield positive results, so the company hoped to be in a position to start work and meet its spending targets.

"The land acquisition process, which is one of critical problems in the toll road construction process, has caused the sluggishness in our spending program," he said.

Frans said disbursement of capital expenditure in the first semester was therefore less than 50 percent of the total allocated funds of Rp 4.7 trillion to finance construction of seven toll roads planned for this year.

The toll roads are: the Jakarta Outer Ring Road (JORR) I extension; the JORR II extension ; the Bogor Ring Road in West Java; the Semarang to Solo and the Solo to Ungaran highways in Central Java; and the Gempol to Pasuruan and Surabaya to Mojokerto highways in East Java.

So far the company has only completed land acquisition for the Bogor Ring Road and the Semarang-Ungaran highway and was still working on land acquisition for the other five highways . The land acquisition for the first two toll roads, Frans said, cost Rp 600 billion (US$58.8 million) and Rp 300 billion respectively.

He added however that the projected total land clearance costs for both of the JORR projects would be in the area of Rp 2 trillion.

"We have received help from the government on the land clearance. We expect the land clearing will finish soon, so that we can start constructing the roads," Frans said adding that all of the proposed toll roads were expected to be in full operation by 2012. Land clearance had to be completed so that construction could start as soon as possible.

At present, Jasa Marga operates 13 toll roads throughout Indonesia and plans to control the country's longest bridge between Surabaya and Madura islandin East Java, which was opened on June 10.

The 5,438-meter Surabaya Madura toll bridge is the longest bridge in the country. The construction started five years ago.

State Minister for State Enterprises Sofyan Djalil said Friday that he expected that the company would continue to manage the bridge if the company showed good performance within the next 18 months.

"Jasa Marga has a big opportunity to continue to manage the bridge because it is a state owned enterprise," Sofyan stated.

He denied allegations that the office of the state minister for state enterprises had violated any rules or regulations by choosing Jasa Marga as the Suramadu bridge operator.

"I think it is normal because Jasa Marga has extensive experience and the company was chosen in a tender, *procedure*" Sofyan said.

In quarter one, the company generated an operational profit of Rp 367.7 billion representing a 1.6 percent increase on the Rp 361.9 billion profit in the same quarter last year.

The net profit, after various deductions, also increased to Rp 196 billion or up 4 percent in quarter one of this year, compared to the Rp 189 billion of net profit generated in quarter one of 2008.

Jasa Marga is targeting to reach Rp 3.7 trillion of gross revenue by the end of 2009. Its chances of doing so depend on starting these toll road projects, held up by land clearance issues.

This is having a negative impact on company revenue and on the stimulus effect hoped for from these projects.(naf)

Copyright © 2008 The Jakarta Post - PT Bina Media Tenggara. All Rights Reserved.