Jasa Marga to acquire Solo-Kertosono road project
Anggi M. Lubis
The Jakarta Post
State-run toll road operator Jasa Marga will next week finalize its acquisition of the Solo-Kertosono toll road connecting the Central Java (Solo) and East Java (Kertosono) cities. The move is an effort to accelerate completion of the Trans Java highway project.
Jasa Marga president director Adityawarman told reporters Wednesday the publicly listed company was expected to complete the acquisition of the toll road project ' which has been left idle due to financing and land clearing difficulties ' from Thiess Contractors Indonesia next week.
Adityawarman said the 90-kilometer-long toll road, which could absorb some Rp 10 trillion (US$759 million) in investment, was pivotal to supporting the government's massive Trans Java project which aims to connect the western and eastern ends of Java, the country's most populous island, by 2019.
'As a state-run company we have to support the government's project and that is why we are eager to acquire the toll road. Solo-Kertosono is among the four remaining projects that need to be completed in order for the Trans Java toll road to be fully connected,' he said.
Thiess won the tender for the project back in 2011 and began construction the following year. Initially, the company aimed to finish the project in 2014, but the company was only able to acquire 80 percent of the needed land.
Jasa Marga did not disclose how much it would disburse for the acquisition, simply stating that it hoped to resume land-clearing and construction this year and to have the toll road operational within two years.
Jasa Marga worked with state-owned construction company Waskita Karya to take over another toll-road project from Thiess Contractors: the Cinere-Serpong toll road in Banten. Also partnering with Waskita Karya in this latest acquisition, in total the partnership spent about Rp 11 trillion for the two acquisitions.
The two firms recently set up a joint venture company to handle the toll roads, with Jasa Marga holding a 60 percent stake and Waskita the remaining 40 percent.
In addition to the Solo-Kertosono toll road, Adityawarman said there were three other projects that needed to be completed to connect the Trans Java highway; namely the Cikampek-Palimanan toll road in West Java, and the Pemalang-Batang toll road and Batang-Semarang toll road projects, both in Central Java.
He added the company was looking to acquire the combined 114-kilometer Central Java told road projects next year. The land needed for the project is currently just 11 percent cleared.
Meanwhile, the 116-km Cikampek-Palimanan toll road in West Java, which is under construction by infrastructure firm Lintas Marga Sedaya, is expected to open in the middle of this year.
Jasa Marga, according to Adityawarman, is looking to book up to Rp 8 trillion in operating revenues (excluding construction) this year, up by 10.65 percent compared with the Rp 7.2 trillion taken in last year.
Last year, the company posted Rp 9.17 trillion in total revenue, down by 10.71 percent from the previous year, due to a 51 percent decline in construction income to Rp 1.94 trillion.
The company expects to open the 12-km Gempol-Pandaan toll road, the 13.9-km Gempol-Rembang toll road and the 18.5 km Krian-Mojokerto road, all in Java.
Jasa Marga reported around a 36 percent increase in net profit to Rp 1.4 trillion last year, up from the Rp 1.03 trillion recorded in 2013.
Jasa Marga is preparing Rp 3.85 trillion of capital expenditure (capex) this year. About Rp 2.46 trillion will be used to develop its toll-road business, while the remaining Rp 1.14 trillion will be used to fund operating capital. Out of the total capex, Rp 1 trillion will come from bank loans and the remainder from internal cash.
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