The Depok-Antasari Section of Toll Road not Worthy of Continuation

The negotiation between the Board of Toll Road Management (BPJT) and PT Citra Wasphuttowa on the development of Depok-Antasari Section of toll road was till at deadlock, as agreement was still not arrived at between the two parties especially on the magnitude of expansion of land-clearing compensation for the project which burdened both parties.

Nurdin Manurung, Head of the Board of Toll Road Management (BJPT) in his disclosure to Business News in Jakarta Tuesday [8/9] said that the continuity of road building of the Depok-Antasari section of toll road depended on the Toll Road Enterprise [BUJT] in this case PT Citra Wasputhowa as investors, whether they were wiling to pay for the costly land clearing expenses in that section zone or preferred to resign from the contract with the Board of toll Road Management [BJPT]. “The final decision is not in BJPT anymore, whether they wish to quit or not. Tell then to call me on the phone directly” Nurdin remarked.

As known, the price of land along the Depok-Antasari had skyrocketed, resulting in the tremendous expansion of the cost of project. Evaluation by BPJT on that section of road concluded that the Depok-Antasari Section was financially not feasible and therefore no longer worthy of continuation. This was due to the fact that cost of land clearing which was formerly estimated at Rp. 700 billion had swollen up to become Rp. 2.1 trillion. While the Government’s capacity to cover up was only Rp. 1.8 trillion, so that investors should increase their investment up to Rp. 300 billions.

The additional investment worth Rp. 300 billion was felt as a heavy burden to investors. Nevertheless they still persist to run the project, hoping that the complementary expenses for land clearing be borne by the Government – and yet the contract between PT Citra Wasphuttowa and BPJT toll road management, as written in the letter of Agreement (PPJT) signed on May 2006 was way overdue.

In fact cases like the Depok-Antasari project could have been avoided if the component of land clearing expenses be excluded from the PPJT. This was the point to be proposed by BPJT Management to the Minister of Finance. BBJT believed that if land clearing expanses would be borne by the Government so that investors were only responsible for building and operating the toll road, there would be certainty in investment climate at the project.
The case of the Depok-Antasari toll road was such that, if the revision of the agreement with PPJT were agreed upon, it would be necessary to repeat the tender of the entire project so the rights were no longer in the hands of PT Citra Wasphuttowa, if another participant came up with better terms.