State toll-road operator and developer PT Jasa Marga (JSMR) aims to secure a toll road project in Sumatra this year that might require a Rp 1.3 trillion (US$141.7 million) investment, according to a senior company executive.
Jasa Marga president director Adityawarman said on Monday that the toll road may span about 27 kilometers connecting the provincial capital of West Sumatra to Sicincin district as part of the government’s Master Plan for the Acceleration and Expansion of Indonesian Economic Growth (MP3EI).
Several toll road projects are planned for Sumatra to support the plan to make Indonesia one of the world’s top-10 economies by 2025.
They include a 35-kilometer toll road connecting Kuala Namu and Tebing Tinggi in North Sumatra, a 50-kilometer road from Tebing Tinggi to Sei Mangkei and a 15.8-kilometer connection from Medan to Binjai.
There is also a plan to build a toll road connecting Pekanbaru and Dumai in Riau.
Bad roads have disrupted goods and services distribution across the archipelago, resulting in high costs and longer traveling times, which discourage investment.
Jasa Marga, which controls 73 percent of all Indonesian toll roads, aims to develop highways outside of Java, which already has many toll roads, said Adityawarman, who replaced the now-retired Frans Sunito earlier this year.
Adityawarman said the Padang development was the most promising project in Sumatra to begin this year as the local administration has secured lands for the road.
“The land is ready at about 80 percent, although it is only 30 meters in width. We will acquire more land to meet an ideal width of 50 meters,” he said.
Jasa Marga is currently in talks with several parties to help construct the Padang toll road, including state cement-maker PT Semen Padang, a subsidiary of publicly listed PT Semen Gresik (SMGR), Indonesia’s largest cement maker.
“Semen Padang can contribute to cement supply so that we won’t have to spend more funds to purchase cement for the toll road,” Adityawarman said. “We will surely cooperate with the local administration.”
Adityawarman expected that an agreement could be signed between stakeholders this year.
“We still have to follow the procedure and cannot skip the Toll Road Regulatory Agency [BPJT]. We want to be the initiator of the project. However, we will follow through the tender process,” Adityawarman said.
Jasa Marga, he said, was also interested in developing the extension of Medan–Kuala Namu toll road to Tebing Tinggi, for which the government has already secured a contract with the China Harbour Engineering Co. Ltd., China State Construction Engineering Corp. Ltd. and PT Hutama Karya.
The company is earmarking the development of nine toll roads this year, comprising the Bogor Ring Road and the Gempol–Pasuruan, Surabaya–Mojokerto, Gempol–Pandaan, Nusa Dua–Ngurah Rai–Benoa, Jakarta Outer Ring Road Northside 2 connecting Ulujami–Kebonjeruk, Serpong–Kunciran and Kunciran–Cengkareng connections.
Jasa Marga, which currently operates 545 kilometers of toll roads, expected to increase traffic volumes to 1.11 billion vehicles this year, boosting revenues to Rp 5.2 trillion.
Jasa Marga may have achieved 12 percent of the total revenue target in the first three months of this year, Adityawarman said.
Shares in Jasa Marga, which has a market value exceeding Rp 33 trillion, traded at Rp 4,975 apiece on Monday, down 0.5 percent from a day earlier. The shares jumped 55.3 percent in the past year, outperforming the broader Jakarta Composite Index’s (JCI) 11.2 percent gain.