R

oad users may finally get to enjoy an almost 70-kilometer stretch of new toll road next year as
funding and land procurement issues stymieing the trans-Sumatra toll road mega-project have been
resolved.

The sizeable project, set to link Sumatra’s northernmost province of Aceh to its southernmost province Lampung by 2019, is part of the government’s massive plans to boost connectivity in Southeast Asia’s biggest economy, which has long struggled with poor infrastructure.

State-owned construction firm Hutama Karya, which was appointed to build the 2,600-km toll road, says that 10.3 km of the Medan-Binjai section and 7.1 km of the Palembang-Indralaya section will be open in early February 2017.

“We have secured the loan as well as addressed the issues with our equity. We are just racing with the weather at the moment,” Hutama Karya operational director Bambang Pramusinto said Friday.

He referred to the Rp 4.9 trillion (US$366.4 million) total investment to build the two sections, which Hutama Karya obtained from state capital injection (PMN) and a loan from state-owned infrastructure financing firm Sarana Multi Infrastruktur (SMI).

The total construction of the two sections, which spans 17 km between Medan and Binjai in North Sumatra and 22 km from Palembang to Indralaya in South Sumatra, are expected to finish between August and December next year.

So far, the construction has reached around 35 percent for both sections, while above 80 percent of the required land has been acquired.

The firm also anticipates that an addition 27 km will open next year. The road will be totally completed in 2018.

Bambang added that land procurement problems, particularly an ongoing legal case against local citizens, had hampered the progress of the two sections. To help accelerate the process, Hutama Karya had already disbursed Rp 1.2 trillion worth of bridging funds for land procurement, which will be paid back by the government.

The trans-Sumatra project is one of the government’s ambitious infrastructure projects to spur economic expansion in the country despite its lack of commercial appeal. It is estimated to cost Rp 331.69 trillion (US$24.7 billion).

The current administration under President Joko “Jokowi” Widodo is seeking to build 1,000 km of toll roads by 2019.

So far, Hutama Karya has been tasked with building 11 sections of the trans-Sumatra toll road.

Based on the firm’s estimate, it will need Rp 52.6 trillion in equity for the first eight sections alone and so far has only been able to secure Rp 20.4 trillion.

It has taken various measures to fill the gap, such as issuing Rp 1 trillion in bonds earlier this week.

Public Works and Public Housing Ministry toll road regulatory agency (BPJT) head Herry Trisaputra Zuna said the ministry was also still running a cross-subsidy program with which the bid winners of the trans-Java sections would execute toll road construction in Sumatra.

One of them is state-owned firm Waskita Karya, which is expected to build a 62 km section of the trans-Sumatra project, linking Terbanggi Besar to Kayu Agung, Lampung.

“We hope the toll road connecting Bakauheni to Kayu Agung will be finished by 2018 and the overall construction can be done in 2019 as well,” Herry said.