Investors Ask PII to Guarantee Trans-Jawa Toll Project
Arif Dwi Cahyono. Indonesia Finance Today, Jakarta - 13/05/2011
Investors hope the government will do their best to make PT Penjaminan Infrastruktur Indonesia (Persero) provide assurance on the toll road projects, so banks can easily fund the project without having to worry about setbacks.
The problem is, in order to provide assurance, PT Penjaminan Infrastruktur Indonesia should be involved from the beginning of the project planning. In the case of Trans-Jawa, the construction of which is already underway, the guarantee cannot be given
"The toll road project is a joint project, so the government needs draw-up policies that can make this project start soon. Currently, PT Penjaminan Infrastruktur Indonesia is the government agency for that purpose. But this is not doable, since the company was not involved in the project from the start,” said Steve Ginter, Project Director of PT Lintas Marga Sedaya (LMS), operator of the Palimanan-Cikampek toll road, Thursday.
He explained that if the government has a strong commitment and a good policy in place, Penjaminan Infrastruktur Indonesia’s reason could be ruled on. Furthermore, the government encouraged the agency to provide assurance regarding the Trans-Java toll project. "This is so banks will not hesitate in financing the project," he said.
Steve confirmed that several banks are reconsidering their previous commitment to grant loans for the project due to the absence of the guarantee. Lintas Marga Sedaya is at present seeking a Rp 7.8 trillion loan to develop the 116 kilometer Cikampek-Palimanan toll road. The total investment needs of Lintas Marga Sedaya to complete the project totals Rp 11.3 trillion. Seventy percent of the total will be obtained from banks, while the remaining 30 percent will be derived from its internal fund.
Fachtur Rahman, Chair of the Indonesia Toll Road Association, said its only normal banks require a guarantee from the government as the invested funds comprise 70 percent of the total investment value,” Fachtur said.
Sinthya Roesly, President Director of PT Penjaminan Infrastruktur Indonesia, says that the company is willing to provide guarantees for infrastructure projects through the public-private partnerships scheme, as long as it does not go against government regulation, particularly the Presidential Regulation No.13, Year 2010.
Sinthya explained that the bid winner for the 24-lane toll road project has been decided, and that according to regulations, the company cannot provide any guarantees.