Trans-Java Toll Road: Regional govt needs to play their roles!

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 - Jalan Tol Trans-Jawa: Mainkan Peranmu, Pemda!

29 November 2018

By Irene Agustine

 

Approaching the end of 2018, the operation of Trans-Java toll road has 180 kilometres remaining before achieving its targeted Merak–Surabaya connectivity of 870 kilometres. The question now is – what is next?

Since early 2015, the government has been pushing the development of infrastructure projects, and toll roads were not an exception. One of the purposes of such endeavour is to stimulate as much investment as possible, by easing the connectivity between regions and reducing logistics costs.

The massive investment is expected to spur economic growth and create numerous jobs for the locals.

After the Merak–Surabaya toll road is connected by the end of this year, will the door be finally open for investors to invest their capital?

Such an issue did not escape the keen attention of President Joko Widodo when he inaugurated the operation of the 51-kilometre (km) long Sragen–Ngawi segment of the Solo–Ngawi toll road project in Sragen, Central Java, Wednesday (29/11).

The former Governor of DKI Jakarta looked pleased to see the fruit of cooperation between the government and the private sector.

However, he also reminded that the success of toll road construction projects must go hand-in-hand with the readiness of regional heads to seize the opportunity in order for the regional economy to benefit best from the infrastructure development.

For instance, by integrating the Trans-Java toll road access with the existing industrial estates, building new industrial estates, or integrating the access with tourist destinations of the local areas.

“With the connectivity of Jakarta–Surabaya [toll road], I want regional heads to integrate [the access] both with existing industrial estates as well as those to be built. Also with tourist destinations, to make them more vibrant,” the President said.

With the Solo–Ngawi toll segment in full operation, travel time could be cut from previously 3 hours through national road, to only 1.5 hours.

“Tourist destinations along the way from Solo to Ngawi are quite plenty. There is the famous Tawangmangu in Karanganyar. In Sragen, we have the Bayanan hot spring, Sangiran archaeological site, and also Mount Kemukus hiking tourism,” Rini said.

In Ngawi, there are a number of historical tourism sites, such as the Van Den Bosch Fort and the Trinil Museum.

With tourism boosted by the toll road operation, the culinary, arts and crafts, as well as lodging businesses will also grow more vibrant from the domino effect.

The increase in demand for goods and services could be a crucial factor in improving the local and regional economy.

The Solo–Ngawi toll segment inaugurated by President Jokowi had started construction in 2011 and only commenced operation earlier this year.

Prior to the Sragen–Ngawi toll segment, two previous sections – the 4-km long Ngawi–Klitik and 35-km Kartasura–Sragen segments – were already inaugurated and commenced their operation earlier this year.

The concession of these toll roads is held by PT Jasamarga Solo Ngawi, a subsidiary of PT Jasa Marga (Persero) Tbk. The investment put into constructing the toll road amounted to Rp11.34 trillion, with a concession period of 40 years and 82.82% local content.

In order to achieve the Merak–Surabaya connectivity target this year, the government and enterprises still ‘owe’ the public 180 km of the target set at 870 km.

To put it in detail, the 180 km comprises sections 1 and 2 of Pemalang–Batang toll segment of SS Pemalang–Batang (33.80 km); Salatiga–Kartasura section of Semarang–Solo (32.50 km); sections 1–5 of Batang–Semarang (75 km); and the State Budget-funded Wilangan–Kertosono segment of Ngawi–Kertosono (39.10 km). The four segments are set to start operating in mid to end of December 2018.

President Director of PT Jasa Marga (Persero) Tbk, Desi Arryani, said that three of four Trans-Java toll road projects still in construction are the responsibility of the concession-holding company.

She ensured that construction of the three toll roads namely Salatiga–Kartasura, Batang–Semarang and Wilangan–Kertosono is already in final stage and ready for commissioning test.

“While it is true that Wilangan–Kertosono [toll segment] is funded by the State Budget, [Jasa Marga] will ultimately operate it. We can ascertain that these three segments can be operated by end of this year,” she said.

Director General for Road Development of the Public Works and People’s Housing Ministry, Sugiyartanto, said that the construction completion of one remaining toll segment in Trans-Java corridor, namely Pemalang–Batang the concession of which is held by PT Waskita Toll Road, encounters no issue and is ready for commissioning test in the near future.

Out of the four segments, he explained, the Wilangan–Kertosono segment would probably finish later on 10 December 2018, while earlier completion is predicted for the other three.

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