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Waskita sets up subsidiary to strengthen toll road business
In a bid to strengthen its toll road business, state-run construction company PT Waskita Karya announced on Monday that it had established a subsidiary to deal with the Legundi-Krian toll road project in East Java
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n a bid to strengthen its toll road business, state-run construction company PT Waskita Karya announced on Monday that it had established a subsidiary to deal with the Legundi-Krian toll road project in East Java.
The publicly listed company said in a written statement that its newly established unit, Waskita Toll Road, had on Aug. 20 set up a new subsidiary, Waskita Bumi Legundi, to manage the East Java project.
The statement reads that total investment for the establishment of Waskita Bumi Legundi reached
Rp 50 billion (US$4.27 million).
Waskita corporate secretary Haris Gunawan confirmed on Monday that the new toll road unit would focus on handling the Legundi-Krian toll road project, which will connect Sidoarjo and Gresik in the same province.
'The construction for the toll road itself is still in the tender process, but as the initiator of the project, Waskita is guaranteed to be involved,' Haris said in a phone interview.
'We hope that in the future, Waskita Bumi Legundi will be the operator of the toll road once it starts its commercial operations.'
The firm's written statement mentions that Waskita Toll Road owns 60 percent of the new subsidiary, while energy firm Energi Bumi Mining owns the remaining shares.
Construction of the toll road is expected to start in the second half of next year, and is scheduled for completion in 2017.
'Legundi-Krian is designed to provide access to industrial vehicles operating in the area,' Haris explained.
Waskita has allocated Rp 500 billion to set up toll road subsidiaries this year, with the aim of boosting the unit's contribution to the company's total revenue. For now, Toll Road contributes around 4 percent of Waskita's revenue, Haris said.
Of the total capital, Rp 400 billion was disbursed in June to establish Waskita Toll Road, which is intended to manage all of the company's future toll road projects.
Waskita Toll Road will kick off operations with Rp 1.2 trillion in initial capital to finance this year's projects.
Aside from the Legundi-Krian project, the toll road division already has three projects in the pipeline, namely the Penajam-Balikpapan bridge in East Kalimantan, the Medan-Kuala Namu-Tebing Tinggi toll road in North Sumatra and the Pejagan-Pemalang toll road in Java.
The Penajam-Balikpapan bridge will cost about Rp 5 trillion and is slated to start construction in November, with completion scheduled for 2016. It will be built jointly with the local administration.
Waskita Toll Road will also represent its holding company in the consortium for the construction of the Rp 6.28 trillion Medan-Kuala Namu-Tebing Tinggi toll road along with other publicly listed firms PT Jasa Marga, PT Hutama Karya and PT Pembangunan Perumahan.
Waskita has also recently acquired the Pejagan-Pemalang toll road in Central Java, which was previously owned by PT MNC Infrastructure Utama, a division of the MNC Group.
' JP/Anggi M. Lubis
