Extension of Government Funding to Private Entities for 28 Toll Road Construction Projects

Minister of Public Works Regulation No.02/PRT/M/2011 on the Amendment of Minister of Public Works Regulation No. 12/PRT/M/2008 on Government Support Implementing Procedures on Land Acquisition for the Construction of Toll Roads Funded by Private Entities’ (“Regulation”) has been issued.

In essence, the Regulation amends Article 4 paragraph 5 of the previous regulation. The previous regulation set the level of government support for acquiring land for toll road construction, at IDR 4,89 trillion for the 2008, 2009, 2010 fiscal years (Article I of the Regulation).

Pursuant to Article I of the Regulation, the IDR 4,89 trillion of funds which the government allocated to support the acquisition of land for the construction of 28 toll roads, has been extended for another 3 fiscal years, (fiscal years 2011, 2012, and 2013).

It is assumed that the extension was issued, because the IDR 4,89 trillion has not been completely distributed to private entities, and the 28 government planned toll roads projects were not commissioned during the 2008-2010 fiscal years.

Other articles of the previous regulation remain unchanged. The requirements for private entities to acquire funding support to acquire land for investing in toll road construction (Article 4 Paragraph (2)) are the same. Private entities are eligible to receive support if the private entities’ allocated funds to acquire land exceed the maximum threshold cost.

The maximum threshold cost, as stipulated in Article 4 Paragraph (3) remain the same. The maximum threshold cost is equal to 110 percent of the cost of acquiring land contained in the Toll Road Management Agreement (PPJT), or 100 percent of the cost of acquiring land plus 2 percent of the value of the investment contained in the PPJT.  

The Appendix of the Regulation contains the names of 28 toll road projects, and is also unchanged. The 28 toll road projects include the Depok-Antasari, Cinere-Cimanggis, Ciawi-Sukabumi, Serpong-Cinere, Kunciran-Serpong, Bogor Ring Road, JORR Seksi W2 Utara toll roads, and other toll roads.

The Regulation has been in force since 6 January 2011.