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Waskita divests two toll road sections to INA
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Traffic officers turn back vehicles at the Pejagan toll gate in Brebes, Central Java, on May 9, 2021. The vehicles were traveling without health documents or travel permits under COVID-19 travel restrictions. (Antara/Oky Lukmansyah)
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T Waskita Toll Road (WTR), a subsidiary of state-owned construction giant PT Waskita Karya (WSKT), has divested two Trans-Java Toll Road sections to the Indonesia Investment Authority (INA), after the latter brought in three foreign investors to finance the project.
At a ceremony held on Tuesday, the agreement was signed by INA subsidiaries PT Rafflesia Investasi Indonesia and PT Abhinaya Investasi Indonesia, with the two construction firms to hand over the Kanci-Pejagan and Pejagan-Pemalang segments of the toll road.
“We have attracted [investors] from 3 continents, namely Europe, America and the Middle East. Hopefully, this will send a positive signal for Indonesia and [Indonesian] SOEs that Indonesia is ready to become a win-win investment destination,” said INA CEO Ridha Wirakusumah at the event.
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Ridha added that the investment consortium consisted of the INA, United Arab Emirates sovereign wealth fund Abu Dhabi Investment Authority (ADIA), Canadian institutional investor Caisse de Dépôt et Placement du Québec (CDPQ) and Dutch pension investment firm APG.
The investors were interested in the potential revenue from toll collection, he said, as the sections were close to cities and major infrastructure, such as Patimban Port, Kertjati Airport and certain industrial zones.
He said the consortium owned an estimated 10,000 kilometers of toll road worldwide, four times the total length of Indonesia’s toll roads.
At a total length of 94 km, he added, the two toll sections taken over by the consortium made up some 8 percent of the total Trans-Java Toll Road.
“If you look at it, the Cirebon-Semarang mileage can be cut by 50 percent today, with approximately 60 thousand cars going through the toll road, and it is projected to be 110 thousand per day by 2030,” Ridha continued.
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Speaking at the same event, WSKT president director Destiawan Soewardjono said he was grateful that the transaction had been completed, as it would help the company’s finances.
Although the two toll sections were some of the main streams of income for the firm, Destiawan said the company’s current business situation made divestment a better choice.
“Indeed, Waskita's business is circular – from investing, to construction, to then offering cooperation with investors. This toll segment is a very good toll road for investors,” Destiawan said.
He added that the deal was the second strategic partnership that the company had cemented this year. Previously, the Cimanggis-Cibitung toll section was divested to state-owned financing firm PT Sarana Multi Investasi (SMI) through a 55 percent share-swap mechanism.
“Our next target is a strategic partnership for the Pemalang-Batang toll road. Hopefully, it can be completed this year,” Destiawan added.
