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Jakarta Post

How to address non-performing toll concessions

  • Sri Rahayu
    Sri Rahayu

    Founder and managing partner of the Rahayu & Partners law firm

Jakarta   /   Mon, May 29, 2017   /  02:49 pm
How to address non-performing toll concessions State toll road operator PT Jasa Marga for Semarang Batang accelerates Batang-Semarang toll road construction activities ahead of this year's Idul Fitri exodus, which will peak onJune 23-24. The toll road is 83.59 percent completed. (JP/Suherdjoko)

The government has set an ambitious target of toll road development, including completing the trans-Java highway by 2018 and commencing the massive development of the trans-Sumatra highway. But the way it is pursuing the target raises questions. It has become an open secret that some, if not many, toll concession holders face difficulties in starting their construction projects due to various reasons, with the main reasons being a failure to secure financing and acquire land. Under the concession agreements, the government holds all the cards vis-à-vis concession holders. The government has set a deadline for the concession holders to complete construction, and when they miss it and are considered to be in default the government can revoke the concessions and retender them to other companies. However, instead of taking strong measures against defaulted concession holders ...

Disclaimer: The opinions expressed in this article are those of the author and do not reflect the official stance of The Jakarta Post.