Infrastructure Update Indonesia: Balikpapan-Samarinda Toll Road
One of the toll roads that is high on the Indonesian government's priority list is the Balikpapan-Samarinda toll road in East Kalimantan. The project is part of the government's quest to boost infrastructure development, thus reduce the nation's high logistics costs and make local businesses more competitive. However, as with every big infrastructure project in Southeast Asia's largest economy, there are bottlenecks that have caused a significant delay.
The main bottleneck for infrastructure projects in Indonesia is land acquisition. This usually takes plenty of time and money as local landowners ask steep prices in exchange for their land (not unoften land speculators managed to purchase plots of land in areas where infrastructure projects are going to be build).
Read more: Analysis of Infrastructure Development in Indonesia
Sudiro Roi Santoso, Head of Investment at the Toll Road Regulatory Agency (in Indonesian: Badan Pengatur Jalan Tol, or BPJT), said currently nearly 80 percent of required land has been acquired for the Balikpapan-Samarinda toll road project. Meanwhile, construction is at nearly 17 percent of completion. The Indonesian government remains committed to speed up the land acquisition process for this project and targets to see all required land under control of the developers before the end of the year. However, it would not be a surprise to see another delay.
The Balikpapan-Samarinda toll road is a designed 99.02 kilometers road that will connect the cities of Balikpapan and Samarinda (the capital city of East Kalimantan). The project is divided into five sections.
Section 1 has a length of 25.07 kilometers (between Balikpapan and Samboja) that is financed through the local East Kalimantan provincial budget with a contract value of IDR 1.40 trillion (approx. USD $105 million).
Section 2, from Samboja to Muara Jawa, has a length of 23.26 kilometers. Section 3, from Muara Jawa to Palaran, has a length of 21.90 kilometers, while section 4, from Palaran to Samarinda, has a length of 17.9 kilometers. These three sections are developed by a consortium named Jasa Marga Balikpapan Samarinda which consists of Jasa Marga (55 percent), Wijaya Karya (15 percent), Pembangunan Perumahan (15 percent), and Bangun Tjipta Sarana (15 percent).
Lastly, section 5 goes from Balikpapan to Sepinggan Balikpapan Airport with a length of 11.09 kilometers. Funds to construct this section originate from soft loans from China and the central government's state budget.
Herry Susanto, official at the Balikpapan-Samarinda Land Procurement Commitment, said there are currently still five troubled plots of land that are yet to be acquired by the developers even though the land has been through the calculation process of the independent public appraiser office. Regarding the majority of land that has been acquired, a total of IDR 163.6 billion (approx. USD $12.2 million) has been paid to local landowners for the acquisition.
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