INA Proposes PUPR To Imitate India's Scheme To Accelerate RI Toll Road Development

Illustration (Photo: Doc. Antara)

JAKARTA - Land acquisition problems are still a serious problem for the government to build toll roads.

The construction of the toll road itself is needed to facilitate public access to various regions.

Therefore, the Indonesia Investment Authority (INA) proposed to the Ministry of Public Works and Public Housing (PUPR) to use the Indian method.

"There is an initiative of the Government of India to accelerate the construction of toll roads. We found this from our discussion with our co investors who are also toll road investors in the world," said Chairman of the Board of Directors of INA Ridha Wirakusumah at the Creative Infrastructure Financing Day event at the PUPR Ministry Building, Jakarta, Wednesday, December 13.

Ridha said, there is one scheme used by the Government of India in accelerating the construction of toll roads, namely Hybrid Annuity Model (HAM).

"In 2016, they introduced a new scheme called human rights. So, the tender was carried out after 80 percent free land," he said.

He considered that the human rights scheme was able to reduce the construction risk of the builders or in this case the Toll Road Business Entity (BUJT).

"In terms of construction, in this human rights scheme 40 percent is borne by the government. However, the cost overrun is by BUJT and of course the government must determine quality and timeliness," said Ridha.

"So, every time there is an increase in costs, it is BUJT's responsibility, but the government also bears 40 percent," he added.

Then, said Ridha, in terms of income, the government can take part in this matter.

"From the tariff toll revenue, in the human rights scheme, the government collects. So, the upside is actually in the government. Of course, the government, if for example here is a BPJT, it is assisted by the APBN, assisted by a Creat Fund which is tax in nature, and the last is of course from tariff income. But, that is certainty for the investor to get income," he said.

He said, there are four advantages over India's human rights scheme, namely certainty and timeliness in payment of posthumousness.

Second, there is a protection mechanism from the risk of cost inflation and also the risk of rising interest rate because the payment is fixed.

Third, there is clarity and timeliness of the control process implemented by the government.

Finally, the Government of India received support from the State Budget and taxes on vehicle fuel sales (cess fund). Thus, investors get certainty in investing.

"So, that's roughly the concept of human rights and its advantages. Hopefully it can become one of the consideration models in Indonesia," he added.