Toll Road Development in Indonesia Disappointing in 2016
Approaching the end of 2016 it is interesting to take a look whether the Indonesian government achieved its target in terms of infrastructure development. In this column we zoom in on toll road construction. Before 2016 started the central government - under the leadership of President Joko Widodo - targeted to see the construction of 136 kilometers of new toll roads this year. However, two weeks before the end of 2016 only 44 kilometers of new toll roads have been developed this year, achieving only 32 percent of the target.
Only the (1) Pejagan-Pemalang toll road (section I and II), (2) Surabaya-Mojokerto toll road (section IV), and (3) Mojokerto-Jombang toll road (section III) have been completed; in total nearly 44 kilometers. And that leaves the question: what has blocked faster development of toll road infrastructure in Indonesia this year?
According to stakeholders in the industry, there are two main reasons why toll road construction in Indonesia has been disappointing in 2016: (1) land acquisition, and (2) heavy rainfall. But despite the disappointing progress with toll road development, there are optimistic voices that say it is positive that 30 toll roads are currently under construction with a total planned length of 1,300 kilometers, about 300 kilometers of which should be completed somewhere in 2017.
Herry Trisaputra Zuna, Head of the Toll Road Regulatory Agency (BPJT) within the Public Works and Housing Ministry, explained that a major problem this year was that government funds allocated for land acquisition in the context of toll road development (IDR 1.40 trillion) had already been used up by the second month of the year.
Wiwiek Santoso, President Director of Astratel Nusantara, remains positive saying the land acquisition process went much faster this year compared to preceding years as the central government cut several regulations in the mechanism for land acquisition. According to Santoso rainy weather is primarily to blame for weak progress of toll road development in Indonesia this year. The La Nina weather phenomenon, which brings wetter-than-usual weather to Southeast Asia in the last quarter of 2016, made dry days a rarity.
Astratel Nusantara, owned by Astra International, is an Indonesian toll road developer and operator. Regarding 2017, Santoso sees great potential for momentum for toll road development in Indonesia as macroeconomic conditions are improving, including commodity prices.
Also Desi Arryani, General Director of state-controlled toll road operator Jasa Marga, said heavy and structural rainfall is what plagued construction in 2016 and led to delays. Therefore, several of the company's projects will not be completed in 2016.
Another problem is that Indonesia has a shortage of skilled workers (engineers). Indonesia, a country where fewer than 10 percent of the total population have enjoyed university-level education, is estimated to have an annual shortage of around 30,000 engineering graduates each year, and thus a key hurdle to infrastructure development as well as growth of the manufacturing industry.
Below we present a list of toll road projects that were targeted to be completed in 2016. However, only three projects were completed (or partly completed) this year (these projects are given a green color).
Toll Roads Planned to Be Completed in 2016:
| Toll Road |
Length (kilometer) |
Developer |
| Semarang-Solo (section III) | 2,00 | Government |
| Solo-Mantingan-Ngawi (section I) | 6,70 | Government |
| Cileunyi-Sumedang-Dawuan (section II) | 3,50 | Government |
| Medan-Kuala Namu-Tebing Tinggi (section I) | 5,00 | Government |
| Akses Tanjung Priok | 0.60 | Government |
| Manadi-Bitung (section I) | 3,50 | Government |
| Balikpapan-Samarinda (sections I & V) | 9,70 | Government |
| Pejagan-Pemalang (sections I & II) | 20,2√ | Private |
| Solo-Mantingan-Ngawi (section II) | 0,87 | Private |
| Kertosono-Mojokerto (sections II-IV) | 26,1 (5,20√) |
Private |
| Surabaya-Mojokerto (sections I-IV) | 34,4 (18.1√) |
Private |
| Gempol-Pasuruan (section I) | 13,0 | Private |
| Cinere-Jagorawi (section II) | 5,50 | Private |
| Pasirkoja-Soreang | 10,6 | Private |
Source: Bisnis Indonesia