Local infrastructure: Realising Riau’s toll road dream
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia: Infrastruktur daerah: Mengawal mimpi Riau jadi nyata
6 July 2018
By Arif Gunawan
The dream of Riau’s citizens to see their area is connected by a highway from the provincial capital city Pekanbaru to the eastern coast in Dumai continues to be pursued. Not only does the local regional government supervise the continuation of the national strategic project, but they also build supporting infrastructures, such as bridge, ring road, and flyover.
The emotion of Riau’s Deputy Governor Wan Thamrin went up and down when chairing a meeting with various parties discussing the continuation of Pekanbaru – Dumai toll project after Lebaran, at the end of June 2018, at PT Hutama Karya Operational Office.
Back then, he was still serving as an acting governor since the incumbent governor was still on a work leave for the simultaneous election.
“Please don’t look for more troubles, because this (Pekanbaru – Dumai toll project) already has the legal umbrella, the highest is from the national strategic project, which is backed by a presidential regulation. If there’s a problem, please report. Don’t sit still,” he said in the presence of the meeting participants.
From the meeting, it is known that the first section of the toll project is still constrained by land acquisition issue because there is a plot located in an area under a mining concession of PT Chevron Pacific Indonesia. The issue turns even more complicated because some of the plots are owned by the locals and some even have a land certificate.
The condition makes the governor furious. He expects the staff in charge to report such problem actively to their leader to find a solution, and not to sit idly.
Hence, Wan gives a directive to the Forestry Agency as well as the Investment and Integrated One-Stop Service Agency to prepare administrative requirements soon.
By doing so, it is expected the land issue can be immediately reported to central governments at the Ministry of Agrarian and Spatial Planning/National Land Agency as well as the Ministry of Environment and Forestry.
Actually, it is not the first time that Riau’s Deputy Governor comes to visit a toll project location. But whenever he pays a visit, he always finds a problem.
For example, in April 2018, it was found that there was a process of granting Pekanbaru City Government’s toll road. The grant process has not finished until today.
Long Process
Pekanbaru – Dumai Toll road, the first toll project in Riau, has a long history. Riau Governor Arsyadjuliandi Rachman once told the idea of how this project was initiated in the era of ex-Riau Governor Saleh Djasit, who took office in 1998 – 2003.
Back then, regional government wished that their citizens, especially palm oil farmers, could have an easy access to distribute their crops to industrial estates in Dumai, which is located in the northern region of the province.
However, the aspiration of the Riau Provincial Government could not be realized immediately, even until the governor position was succeeded by Rusli Zainal, who was in power for 10 years, then continued by Annas Maamun, and then by Andi Rachman, when the toll project in the region began slowly in 2016.
One of the factors driving the commencement of the project is Presidential Regulation No. 3/2016 regarding the Accelerated Implementation of National Strategic Projects (PSN). In the regulation, the 131.5 km-long toll road will connect Pekanbaru – Dumai. The project aims to boost the development of agribusiness sector and the growth of local industrial cities.
Pekanbaru – Dumai toll project is split into six sections, namely section I that connects Pekanbaru – Minas spanning 9.5 kilometres (km), section II Minas – Petapahan spanning 24 km, section III Petapahan – North Kandis spanning 17 km, section IV Kandis – South Duri spanning 26 km, section V South Duri – North Duri spanning 28 km, and section VI North Duri – Dumai spanning 25 km.
For land acquisition process, central government has prepared a fund of approximately Rp250 billion, while for the physical construction of the project, the cost is estimated to reach up to Rp16.2 trillion.
To date, the land acquisition process still proceeds, and Riau Province’s National Land Agency Regional Office claims that it has acquired around 80% land for the toll road.
While the remaining land which has not been acquired will be processed through a consignment system, where the money for land compensation is deposited into court.
“The remaining [land] which hasn’t been procured is around 24.46 hectares (ha) or 79 plots which are spread over all sections. As long as there is a recommendation from the LHK (Environment and Forestry) Ministry, we will pay [the land acquisition cost],” said the Head of Riau Province’s National Land Agency Regional Office, Lukman Hakim, recently.
It is true that land acquisition process serves as a foundation for the commencement of physical construction of a toll road. The initial plan was to have the land acquisition process completed at the end of 2017.
The current condition causes delay in the operation target of the toll road. Previously, it was planned that by 2019, all sections will have been operational.
At the moment, the contractor of the toll road, PT Hutama Karya (Persero), claimed that physical construction has started in several sections, such as section I, II, III, IV, and VI. The physical construction in section V has not started since the land acquisition is still in process.
Businessmen’s Perspective
Business players are optimistic that the presence of Pekanbaru – Dumai toll road will bring positive impacts on the economic and business climate in the region.
Head of Apindo (the Indonesian Employers’ Association) in Riau, Wijatmoko Rah Trisno, said with the government’s support on the infrastructure, business players can perform more efficiently. A region which still lacks sufficient infrastructure is prone to high cost economy.
At the moment, for an access to industrial estates in Dumai, businesses still rely on trans-Sumatra toll road, which is connected to arterial roads. The travel time is rather long, which is about 4 hours of travel.
Moreover, if there is a damaged road or any other issue, the travel can take up to 6 hours. Also, a palm oil transporting truck travelling from Kampar Regency to Dumai can take at least 8 hours during smooth traffic condition.
Wijatmoko reckoned that Pekanbaru – Dumai toll road will benefit the area in so many ways. Not only will it provide an easy access for businesses, but it will also turn Riau into a hub or connector in Trans-Sumatra toll road which is currently under simultaneous construction in North Sumatra, South Sumatra, and Lampung.
“Investors are interested in making an investment in an area which is backed by infrastructure, because it determines business operation.”
This condition is what drives Riau Provincial Government to make a commitment to supervise this project until the end of the governor and deputy governor’s administration in February 2019.
Riau Deputy Governor Wan Thamrin is determined to keep asking the continuation of the toll road construction project each month, including, if he is fit enough, surveying the toll project location directly.
Meanwhile, Riau Governor Arsyadjuliandi Rachman when he returned to office on 25 June, immediately went down to the field to survey the development of the project together with the related service agencies.
From the visit, Andi Rachman declared that the toll road construction is making progress, including the physical construction and road pavement. Although it seems unfeasible to complete the construction by the end of 2019, contractors are still urged to continue working at their best.
