The Public Works and Housing Ministry has proposed the addition of five new toll road projects in the National Strategic Projects (PSN) list, as it aims to achieve its road development target and cut down Indonesia’s staggeringly high logistics costs. The new toll road projects include the 37.7-kilometer Patimban seaport access road and 21-km Semarang harbor toll road, aimed to streamline access to strategic ports in West and Central Java, according to the ministry’s Bina Marga director general, Hedy Rahadian. The three other projects are the Gedebage-Tasikmalaya-Cilacap toll road in West Java, Maros-Sungguminasa-Takalar toll road in South Sulawesi and Samarinda-Bontang toll road in East Kalimantan.
Alongside the new projects, the ministry is also proposing the expansion of four existing toll road projects that are already on the PSN list, including the Bogor Ring Road in West Java. “Logistical costs in Indonesia are still hovering at around 24 percent of our gross domestic product, which is higher than our neighboring countries. We aim to push down the costs, particularly through the road transportation aspect,” Hedy said during an online press conference on Tuesday. Projects included in the PSN are granted an easier licensing process and accelerated land procurement, as well as government guarantees on any political risks. There are currently 64 toll road projects included in the PSN, 14 of which are already in full operation, ministry data shows.
Furthermore, 10 toll roads are in partial operation, 26 roads are under construction and 14 roads are still in the planning process. As of Tuesday, the ministry had constructed 210.3 km of toll roads in 2020, around 62 percent of this year’s 341-km target. It plans to build more than 2,700 km of new toll roads by 2024 in order to cut down on Indonesia’s average travel time from 2.4 hours per 100 km to 1.9 hours per 100 km. Indonesia’s ranking on the 2018 World Bank’s Logistics Performance Index (LPI) rose 17 places to 46th out of the 160 countries surveyed. However, it remained below its neighboring middle-income countries, including Thailand at 32nd place. “We will make highways and toll roads the backbone [of Indonesia’s road system] because they can significantly cut down on travel time,” Hedy said. According to ministry data, the access road to the Japan-backed Patimban seaport will require an investment of Rp 7.5 trillion (US$512.2 million). The project’s construction is set to begin in January 2022, with operations to commence by 2024. Located in the West Java regency of Subang, the Patimban seaport is expected to be Indonesia’s primary export port and ease the burdens of Tanjung Priok Port and traffic congestion in Jakarta due to the cargo transportation.
The port is located about 70 km from the Karawang industrial estate in West Java, where many Japanese companies have built factories, and is funded by an official development assistance loan from the Japanese government amounting to Rp 14.2 trillion for the first development phase. Meanwhile, the Semarang harbor toll road will connect Tanjung Emas seaport in Central Java with the Semarang-Demak toll road. According to the ministry, the project is estimated to cost Rp 12.05 trillion. The toll road is slated to begin construction in 2021 or 2022, and begin operating by 2023, according to the ministry. Aside from the additional projects, Hedy said the ministry planned to remove the Palembang-Tanjung Api Api toll road in South Sumatra from the PSN list, due to uncertainties surrounding the Tanjung Api Api seaport construction.
“After further communication with the Transportation Ministry, it seems that the seaport project isn’t final yet. We can’t build a toll road if we don’t know whether the seaport will be there or not,” he said. Earlier in May, the government proposed adding an additional 89 new projects to the PSN, with an estimated Rp 1.422 quadrillion in investment value. This would add to the current total of 223 national strategic projects on the list. Coordinating Economic Affairs Minister Airlangga Hartarto said on May 29 that the new projects would employ around 4 million workers every year from 2020 to 2024. “During the projects' development over the next five years, it is hoped that a total of 19 million [workers] are involved,” Airlangga told a virtual press briefing following a Cabinet meeting.
