The government hopes that partnering with the World Bank to set international standards for its toll road projects will help it gain foreign investors’ trust.

Herry Trisaputra Zuna, who heads the Toll Road Regulatory Agency (BPJT) under the Public Works and Public Housing Ministry, said many previous projects had been ill-prepared and had therefore failed to convince foreign investors.

“Investment is often about trust. Even if we keep saying that we have changed [in terms of bureaucracy and the investment climate], they might not buy it. With the World Bank helping us prepare, we’re sending a clear message that the projects are intended for international players as well,” he said recently.

The projects the government hopes will appeal to foreign participants in the initial phase are the Yogyakarta-Bawen toll road in Central Java and the Sukabumi-Ciranjang-Padalarang toll road in West Java.

The Yogyakarta-Bawen toll road is expected to support tourism around the Borobudur temple and in Yogyakarta, while the Sukabumi-Ciranjang-Padalarang is expected to ease congestion on the Cileunyi-Padalarang toll road. The latter connects Jakarta and Bandung and has seen worsening congestion over

the years.

Both projects were recently presented to ASEAN member countries to be included in the final project list of the Master Plan on ASEAN Connectivity (MPAC) 2025.

President Joko “Jokowi” Widodo has made infrastructure development, including overland connectivity, one of his administration’s priorities. In the 2017 state budget, the government has allocated Rp 387.3 trillion (US$28.88 billion) to infrastructure development, 22 percent more that what it set aside this year.

Infrastructure development in the country will require Rp 4.7 quadrillion until 2019. However, the government can only cover about 40 percent of the total funding, according to data from the National Development Planning Board (Bappenas).

Toll road construction has relied heavily on funding from the respective state-owned construction firms to which the government assigns toll road concessions. The government itself is only in charge of land procurement for the roads.

Herry said only a few players had been interested in various toll road project auctions. State-owned toll road operator Jasa Marga and state-owned construction firm Waskita Karya are among a handful of companies dominating toll road construction this year.

The participation of foreign entities has been limited. Among the foreign firms are Malaysia’s UEM Group Bhd. and HCM Engineering Sdn. Bhd, which participated in a tender for the 37.62-km-long Pandaan-Malang toll road in East Java and Plus Expressways Bhd., which holds a majority stake in private toll road operator Lintas Marga Sedaya.

University of Indonesia infrastructure expert Wicaksono Adi and Indonesian Toll Road Association (ATI) chairman Fatchur Rochman acknowledged that infrastructure funding remained a major obstacle in the country.

Fatchur noted that aside from the lack of interest among foreign investors, there was also limited participation by domestic private-sector companies.

He said the government should increase the upper limit of its viability gap funding (VGF) — a form of government subsidy used to partially finance construction projects deemed commercially unfeasible — to more than 49 percent of a project’s value to reassure investors.

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