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Hutama Karya to get Rp 3.6t for highways
State-owned construction firm Hutama Karya is set to receive Rp 3
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tate-owned construction firm Hutama Karya is set to receive Rp 3.6 trillion (US$286.9 million) in state capital this year for construction of the long-awaited Trans-Sumatra highway.
Hutama Karya president director I Gusti Ngurah Putra said on Monday that the capital injection would be used to finance the first section of the toll road, stretching 15.8 kilometers from Medan to Binjai in North Sumatra, as well as part of the Bakauheni-Terbanggi Besar section in Lampung.
Putra revealed that investment to construct the Medan-Binjai section reached Rp 1.4 trillion and that the company would allocate around Rp 1 trillion of capital injection to the project.
'The rest of the investment needed for the Medan-Binjai section, around Rp 400 billion, will be financed with bank loans. The state capital injection is definitely helping us to speed up the project,' Putra said on the sidelines of a hearing at the House of Representatives.
Meanwhile, the remaining Rp 2.6 trillion of the capital injection would be used for the 140.5 km Bakauheni-Terbanggi Besar section, he said.
Putra added that the company was still completing the first section's detailed engineering design (DED), expecting to begin the construction in the middle of this year.
'If we encounter no obstacles to acquiring the land then we are optimistic that we can finish the construction in one and a half years,' Putra said.
He explained that the company had taken ownership of land belonging to state-owned plantation company PT Perkebunan Nusantara VII, which controls 70 percent of the land allotted for the first section of the highway.
The administration of then president Susilo Bambang Yudhoyono conducted the groundbreaking ceremony for the Medan-Binjai section last year.
The Trans-Sumatra toll road will stretch a total of 2,700 kilometers from Aceh to Lampung.
The Bakauheni-Terbanggi Besar section is the second of 24 stages of construction and will be followed by the Palembang-Indralaya section in South Sumatra and the Pekanbaru-Dumai section in Riau.
According to Putra, the company will begin to conduct the DED for the Bakauheni-Terbanggi Besar section when the Public Works and Public Housing Ministry completes the road-alignment process.
'We will carry out the construction of the Bakauheni-Terbanggi Besar section in parallel with the Medan-Binjai section. We are hoping to begin the construction of the second section by early next year at the latest,' Putra said.
The total investment needed to construct these four sections would reach Rp 30.83 trillion, with expected state capital injections to reach Rp 12.9 trillion, Putra revealed, adding that the rest of the required investment would be financed from bank loans.
Meanwhile, State-Owned Enterprises Minister Rini Soemarno claimed during the hearing that the capital injection for Hutama Karya was essential given the fact that the highway project was not financially viable.
'The government has assigned Hutama Karya to construct the Trans-Sumatra highway. Since the toll road is not economically feasible, Hutama Karya will receive state capital injections,' Rini said during the hearing.
The Trans-Sumatra toll road is expected to reduce distribution costs on the island and, as a consequence, drive down prices and make goods more competitive, but the project has been delayed for years, primarily because of land-acquisition problems.
