News - 13 July 2018

Developer seeks govt funds to continue Trans-Sumatra toll project

An aerial photograph of the Trans-Sumatra toll road's Palembang-Indralaya section in Pemulutan district, Ogan Ilir regency, South Sumatra, taken on Feb. 28. (Antara/Nova Wahyudi)

State-owned construction company PT Hutama Karya has requested a capital injection of Rp 12.5 trillion (US$868 million) from the government to continue the Trans-Sumatra toll road project.

“The state capital injection should be disbursed, because otherwise, we cannot continue the project,” Hutama Karya finance director Anis Anjayani said after attending a hearing at the House Commission VI overseeing infrastructure and industry affairs in Jakarta on Wednesday.

Presidential Regulation No. 117/2015 assigned Hutama Karya to construct 654 kilometers of the Trans-Sumatra toll road, which includes eight sections, by next year. The entire project will comprise 2,818 km of roads with a total investment estimated to reach Rp 273 trillion.

However, Hutama Karya data shows that only 21.86 km is operational, including the 6.17-km second section, the Medan-Binjai route, connecting Semayang and Helvetia. The company recently completed 10 km of the Trans Sumatra toll road network, which is not yet operational.

The government provided capital injections (PMN) in 2015 and 2016 amounting to Rp 5.6 trillion.

In addition to requesting additional funds from the government, Hutama Karya also plans to seek alternative methods of financing, such as loans guaranteed by the state or through the securitization of the company’s assets.

Anis said that among the potential assets for securitization are several toll roads, including Medan-Binjai, Palembang-Indralaya and Bakaheuni-Terbanggi Besar. (bbn)

By The Jakarta Post