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Tanjung Priok toll road management concession may go to Hutama Karya
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A Hutama Karya crane works at a construction site in Jakarta. The government is considering handing the concession for management of the Tanjung Priok toll road to state-owned construction firm PT Hutama Karya to help the latter finance the Trans-Sumatra toll road project. (Kontan/Cheppy A. Muchlis)
T
he government plans to give the concession to manage the Tanjung Priok toll road to state-owned construction firm PT Hutama Karya, which is struggling to finish Trans-Sumatra toll road.
Comprising eight sections spanning 2,818 kilometers, the Trans-Sumatra toll road is estimated to cost Rp 80 trillion (US$6.01 billion).
The State-Owned Enterprises (SOEs) Ministry’s deputy for construction, infrastructure and facilities, Pontas Tambunan, said that revenue from the toll road could be used by Hutama Karya to issue bonds, among others, which could finance the Trans-Sumatra project.
As the project has a low internal rate of return, investors are not interested in pouring their money into it, and consequently, the firm needs to rely on sizeable amount of debt.
"The Trans-Sumatra project is not highly [commercially] feasible and therefore, we’ve provided a state capital injection (PMN) to Hutama Karya. We are thinking of other ways to help them,” Pontas said during a meeting with the House of Representatives on Thursday.
(Read also: Hutama Karya issues Rp 1t bonds, pushes trans-Sumatra project)
In late March, the government handed over the concession to manage the Jakarta Outer Ring Road section S (JORR S) to Hutama Karya, resulting in around Rp 4 trillion in additional equity for the company. In addition, the government also provided viability gap funds (VGF) for the project.
Pontas, however, could not specify if the transfer of management of the Tanjung Priok toll road concession would be carried out shortly as the value of the road was still being calculated.
Now in the final stage of construction, the toll road is scheduled to open soon.
