T

he government officially began the Manado-Bitung toll road project in North Sulawesi on Sunday.

The 39-kilometer toll road, which is one of the infrastructure projects under the Master Plan for the Acceleration and Expansion of Indonesian Economic Development (MP3EI), will cost Rp 4.1 trillion (US$375.6 million). Coordinating Economic Minister Chairul Tanjung said the construction of the toll road was crucial for connecting the province'€™s capital Manado with the Bitung special economic zone.

Bitung is home to the 500-hectare Tanjung Merah industrial center, which is slated to serve as a manufacturing base for natural resource, fishery and packaging industries.

'€œThe toll road will decrease the traveling time between the Bitung special economic zone and the capital city, therefore the logistics costs can be reduced and we hope that Manado can become the next growth center in the Asia Pacific region,'€ Chairul said.

The project, which will begin construction by the end of this year, will be divided into two segments: a 12.5-kilometer stretch connecting the Manado Ring Road to Airmadidi and a 25.5-kilometer stretch from Airmadidi to Bitung.

According to Public Works Ministry spokesperson Djoko Mursito, the government would fully finance the construction of the first segment, as the work was deemed to not be profitable for private businesses.

The funding for the construction of the toll road has been secured through a loan from China.

The government had previously planned to pay for the project through a viability gap fund (VGF) scheme, which would have allowed the government to allocate state funds to cover up to 40 percent of the total value of the infrastructure project using a public-private partnership (PPP).

'€œThe investment needed to build the first section of the toll road is too high, therefore we could not offer the project to investors,'€ Djoko told The Jakarta Post on Monday.

'€œWe will offer the second segment to potential investors, right after we have acquired at least 70 percent of the land needed,'€ he continued.

He said that the government had so far acquired less than 50 percent of the land needed for the second segment.

'€œThe land acquisition will take some time. We haven'€™t set any target yet about when we will seek investors for the second section,'€ Djoko said.

The office of the Coordinating Economic Minister has said that it would fast-track 15 priority infrastructure projects for ground-breaking or completion this year.

The projects include the 2,700-kilometer Trans Sumatra toll road in North Sumatra that was begun last Friday, the expansion of the Soekarno-Hatta International Airport in Banten, the construction of Kertajati Airport in Sumedang, West Java and the completion of the Rp 4 trillion Jatigede Dam, also
in Sumedang.

During the ground-breaking ceremony for the Manado-Bitung toll road, the coordinating economic minister officially announced several other strategic projects for the province, including the reconstruction of several national roads: the 5.5-kilometer Molobog-Onggunoi III road and the 5-kilometer-long Molobog-Onggunoi II road, which will receive investments of Rp 37.9 billion and Rp 24 billion, respectively.

'€” JP/Nadya Natahadibrata