Headlines

Project waits for blanket
guarantee

The office of the coordinating economic minister says that the government is still waiting for Finance Minister Agus Martowardojo’s approval to issue a blanket guarantee on the Sunda Strait Bridge project.

“The finance minister will have no problem issuing the guarantee once he is assured that a proper tender on the project is implemented,” said Coordinating Economic Ministry deputy for infrastructure development Luki Eko Wuryanto.

Luki said that the finance minister needed more time to formulate all of the needed regulations and requirements before issuing an approval to guarantee the Sunda Strait Bridge project because the bidding process for the project was based on a specific regulation.

Luki said the bidding process for the Sunda Strait Bridge incorporated a provision that allowed the initiator of the project to match any offer given by a competitor. The initiator is PT Graha Banten Lampung Sejahtera, a consortium which includes the Banten and Lampung administrations along with PT Bangungraha Sejahtera Mulia, a subsidiary of business tycoon Tommy Winata’s Arhta Graha Group.

“The legal formulation from the finance minister on this kind of tender is still under development,” Luki said.

Another stipulation that favors the initiator is the 10 percent preference clause. Under this stipulation, the initiator has the right to bid 10 percent higher than the lowest tender bidder and would still receive preference from the government to receive the project.

The stipulation provides support to the initiator, as it will be responsible for conducting a feasibility study on the project over the next two years.

“Once the feasibility study is completed, we are going to tender the project. The tender winner could be the consortium or other interested stakeholders and investors,” Luki said.

The Finance Ministry’s fiscal policy interim chief Bambang Brodjonegoro previously said that the finance ministry needed more time to issue the guarantee on the Sunda Strait Bridge project because the regulation on it could overlap with previous government regulations on infrastructure projects that were conducted under cooperation between the state and the private sector.

“Guarantees on all public-private partnership (PPP) infrastructure projects are stipulated in Presidential Regulation No. 78/2010, while the Sunda Strait Bridge project is regulated under a different presidential regulation,” Bambang said.

The Sunda Strait Bridge project is regulated under Presidential Regulation No. 86/2011 on the Sunda Strait region’s strategic infrastructure development.

Bambang said that the Sunda Strait Bridge could not be considered a PPP project because its initiator was from the private sector.

“Therefore, the government is currently trying to revise Presidential Regulation No. 78/2010 so that the Sunda Strait Bridge can be given a guarantee. The government is also evaluating whether such a project is worthy a guarantee or not,” he said.

The Sunda Strait Bridge will connect Banten in West Java and Lampung in the southern part of Sumatra.

Currently, passengers and cargos from Sumatra and Java are transported by ferry through Merak
Port in Banten and Bakauheni in Lampung.

A single ferry journey takes between three to four hours, while a speed boat ride takes around 45 minutes. However, ferry services are interrupted during high tides when speed boats are prohibited from traveling.

Upon completion of the bridge, which is estimated to cost the state at least Rp 100 trillion (US$10.9 billion), it would only take 30 minutes for passengers and cargos to cross the strait by electric train.

The bridge is planned to be at least 29 kilometers long — six times the length of the Suramadu bridge which connects Java and Madura — and with six car lanes, motorcycle lanes and double railway tracks.

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