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South Sumatera Toll Roads is not National Programme

JAKARTA - The plan for a toll road project in South Sumatera (Sumsel), which spans for 137km long and has investment worth of Rp 8 trillion, is not included in the national programme of the Ministry of Public Works. It is because all projects related to toll road construction must be tendered out by the Toll Road Regulatory Agency (BPJT).

“We have not gone there yet. I do not know if Sumsel Provincial Government plans on building a new toll road; so far, the only existing national programme in Sumsel is Palembang - Indralaya toll road segment,” Head of BPJT, Achmad Gani Ghazali, said to Investor Daily in Jakarta on Monday (8 August).

South Sumatera (Sumsel) Provincial Government and a Malaysian company, Markmore Labuan Ltd, and Prodexim, a company belonging to the Sumsel Provincial Government, have signed the head of agreement (HoA) for the construction of this 137km-long toll road.

The Rp 8 trillion-worth toll road infrastructure project will be constructed from Kayu Agung to Betung Banyuasin; it will become the second longest toll road project in Sumatera Island after Balmera toll road in North Sumatera. “The construction of the 137km-long toll road will be undertaken by PT Sriwijaya Markmore Persada, which is a partnership between Markmore Labuan Ltd and PD Prodexim,” Sumsel Governor Alex Nurdin said.

Alex Nurdin claimed to have obtained the Central Government’s support through the Investment Coordinating Board (BKPM) in the form of licensing completion assistance, so that the toll road construction can start immediately.

According to Alex, the commencement of the project is planned to be inaugurated by President Susilo Bambang Yudhoyono and Malaysian Prime Minister on 10 November, 2011. The toll road construction will be divided into three segments; namely, the 37km-long Kayu Agung - Jakabaring segment, Jakabaring -  Alang Alang Lebar (42km), and Alang Alang Lebar - Betung (58km).

Gani explained that local government can legitimately construct toll road. However, the plan must have the approval from the Central Government; and in this matter, the Ministry of Public Works (PU).

It is as exemplified by the Provincial Government of DKI Jakarta that has planned to construct six new toll roads; i.e. this is being proposed first, and then the Central Government gives its approval and subsequently holds a tender in cooperation with the local government. “There is no regulation stating that the Provincial Government can run the tender and undertake the project,” Gani said. 

According to Gani, investment activity on infrastructure such as toll road must be performed by the Central government instead of the local government. “The project will be tendered out. Partnership can certainly be established with the local provincial government. But if the contractor that undertakes the project is already determined, it is a violation of the regulation,” he said.

South Sumatera Provincial Government should better propose it first to the Ministry of PU and have the commercial feasibility rate of the toll road project reviewed. “After we have the proposal, we will perform a feasibility study first whether the toll road project is economically feasible or not since the investment value is very large,” Gani said. (imm)