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ublic Works and Public Housing Minister Basuki Hadimuljono signed contract agreements on Friday for the development of three toll roads, including two segments of the long-awaited trans-Sumatra highway, worth Rp 21.6 trillion (US$1.52 billion).

According to Basuki, the construction of the toll roads officially started after the contract signing, despite the fact that President Joko '€œJokowi'€ Widodo had held a groundbreaking ceremony for the Bakauheni-Terbanggi Besar section in April.

The minister signed the contract with state-run construction company Hutama Karya for the development of two sections of Trans Sumatra highway serving Bakauheni-Terbanggi Besar and Palembang-Indralaya and also with Citra Marga Lintas Jabar '€” a consortium of state-run construction company Wijaya Karya, toll road firm Citra Marga Nusaphala Persada and Bandung-owned company Jasa Sarana '€” for the construction of Soreang-Pasir Koja toll road in West Java.

Basuki said that the 140.9-kilometer toll road connecting Bakauheni and Terbanggi Besar was expected to begin operation in 2016, while the 21.93-kilometer long Palembang-Indralaya toll road was expected to complete construction in 2017.

'€œFinancially, this project is not feasible but it could have a significant impact on the development of the economy in Sumatra, therefore the government appointed Hutama Karya to develop the toll roads,'€ Basuki said. '€œThese toll roads are targeted to finish construction before the 2018 Asian Games,'€ Basuki said.

Hutama Karya secured last month Rp 481 billion in loans from state infrastructure financing firm Sarana Multi Infrastruktur (SMI) to help finance the first segment of the ongoing Trans-Sumatra toll road project, the 16.6 kilometer Medan-Binjai that began construction late last year.

The initial cost of the Medan-Binjai segment was estimated at Rp 1.6 trillion. The segment is divided into three sections, which are Tanjung Mulia-Helvetia, Helvetia-Semayang and Semayang-Binjai.

Hutama Karya president director I Gusti Ngurah Putra said that the company would soon secure a loan from SMI worth Rp 1.1 trillion for the Palembang-Indralaya segment.

'€œAs for the Bakauheni-Terbanggi Besar section, in our business plan 52 percent of the investment will come from equity while the remaining 48 percent from loans. We are currently still in the process of finding the source, both local and international,'€ Ngurah said.

The total investment for the Bakauheni-Terbanggi besar toll road reached Rp 16.7 trillion, while the Palembang-Indralaya toll road reached Rp 3.3 trillion.

Earlier this year, Hutama Karya received Rp 3.6 trillion in state capital injection, of which Rp 1 trillion would be allocated to construct the Medan-Binjau section, while the remaining Rp 2.6 trillion would be used for the Bakauheni-Terbanggi Besar.

'€œWithout state capital injection, this project is not feasible,'€ he said.

Meanwhile, Citra Marga Lintas Jabar president director Bagus Medi Suarso said the company had secured 90 percent of the land needed to construct Soreang-Pasirkoja toll road, expecting to complete the construction in 2016.

The toll road is part of the 27 infrastructure projects offered by the President to investors through the public private partnership (PPP) plan. The 10.57-kilometer long toll requires Rp 1.7 trillion in total investment.