Friday, 5 June 2009

Jagorawi Toll Road has The Right to Adjust Tariff Based on 40 Year Concession Period

About 13 sections of toll roads would impose tariff increase as per next August. Among the sections to have tariff increase was the Jagorawi Section managed by PT Jasa Marga [Persero] Tbk. Nurdin Manurung, Head of the Board of Toll Road Management [BPPJT] disclosed the matter to Business News. Although the Jagorawi toll road has by accounting attained the break-even point, the concession period which was 40 years still permitted the company to impose price adjustments.

The 40 year concession period was obtained due to bundling on 13 toll sections managed by PT Jasa Marga, i.e. Jagorawi Toll, Semarang secion A, B, C, Jakarta-Tangerang, Jalan Prof. Dr. Sediyatmo, Surabaya-Gempol, Belmere Toll, Jakarta-Cikampek, Cawang-Tomang, Outer Ring Road, [JORR], Section E-2 [Cikunir-Cakung], Padalarang-Cileunji Toll, Tomang-Grogol-Pluit, Palimanna Lumbon-Kanci, Pondok Aren-Bintaro [Viaduct Ulujami].

Jasa Marga obtained concession period up to 40 years, that was because the State-Owned company operated 4 toll road sections which needed subsidy from other sections. The 4 toll roads needing subsidy were Semarang toll section A, B, C and Balmera toll. This was because the daily traffic in the said sections were still low, meaning it required longer time to attain break-even point. “Therefore, when being in charge as operator and regulator, Jasa Marga was signed by the Government to build toll roads with low financial feasibility, which implied that the operations of those “thin” sections needed subsidy from the “thick” section the way it was applied to the Jakarta-Cikampek and Jagorawi toll”.
The tariff increase of toll road were regulated in the Law no. 38 year 2004 on toll road management, where tariff adjustments were automatically done every 2 years the magnitude of which were in accordance with the inflation level within that period.

The Tangerang-Merak Toll Tariff to increase by 55%
All the 15 toll roads which would have tariff increase-apart from the section owned by PT Jasa Marga – were the roads owned by PT Marga Mandala Sakti who managed the Trangerang-Merak toll. This toll section would impose tariff adjustment of 55% to become Rp. 18,000 for vehicles of type I category. The tariff increase were the highest compared to other sections which had tariff increase of between 12% to 15%. This was because PT MSS had made re-investments worth Rp. 3.5 trillion road repairs and road widening along 72.5 km.

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