Infrastructure Indonesia: Balikpapan-Bontang Toll Road Update
The Balikpapan-Samarinda toll road on the eastern coast line on the island of Kalimantan (in the province of East Kalimantan) will be extended to include the city of Bontang. During a visit to Balikpapan at the start of the week, Indonesian President Joko Widodo confirmed the extension plan. It implies that the project will more than double in length. The distance between Balikpapan and Samarinda is around 99 kilometers. However, from Samarinda further northeastwards to Bontang stretches across 116 kilometers.
The Balikpapan-Samarinda toll road is one of Indonesia's toll road projects, designed to boost intra-island connectivity, hence curtailing the country's high logistics costs, improve the competitiveness of domestic businesses, and make the investment climate more attractive. In the period 2015-2019 the Indonesian government targets to build 1,000 kilometers of road, approximately doubling the length of the nation's existing toll roads. This is a very ambitious target that may not be achieved due to Indonesia's notorious land acquisition problems.
The Balikpapan-Samarinda toll road is one of the many infrastructure projects in Indonesia that had to be delayed due to these land acquisition problems. Initially, construction of this toll road commenced in 2010. However, construction was halted for a period of five years as developers failed to purchase all required land. After being inaugurated as Indonesia's seventh president in 2014, Widodo's push for infrastructure development is what gave new life to this project in 2015 although not all required land has been acquired yet. Still, the government is optimistic that the nearly USD $1 billion project (the route Balikpapan-Samarinda) can be completed by 2018 and will cut travel time between both cities to about one hour (from nearly three hours currently).
The request to add Bontang to the Balikpapan-Samarinda toll road stemmed from East Kalimantan Governor Awang Farouk. Although we did not obtain information about the amount of additional costs that are required to establish the Samarinda-Bontang road, the whole project is estimated to cost USD $2 billion considering the length of the toll road will more than double compared to the initial plan.
The Balikpapan-Samarinda part is divided in five sections. Construction of one of these sections will be fully funded by the central government's state budget (APBN) and the regional state budget (APBN-D). Another section will be financed through a loan from China. The remaining three sections are tendered to the private sector.
Based on information in local media, three consortia will be tasked to construct the extension between Samarinda and Bontang: (1) the consortium of Jasa Marga, Wijaya Karya, Pembangunan Perumahan and Bangun Tjipta Sarana, (2) the consortium of Citra Marga Nusaphala Persada, Kaltim Bina Sarana Konstruksi, Brantas Abipraya, Istaka Karya, and (3) the consortium of Naza Engineering & Construction, and Daya Mulia Turangga.
