Toll road infrastructure: Vital role of JSMR
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Infrastruktur tol: Peran vital JSMR
28 February 2023
By: Muhammad Ridwan
PT Jasa Marga (Persero) Tbk (JSMR) has become the main toll road player in Indonesia with 25 concessions of operational toll roads.
Toll road construction in Indonesia is advancing significantly in the last decade. One by one, toll roads that are the backbone for cargo and passenger transportation are starting to be connected.
The government recorded that the length of toll roads in Indonesia from 1978 to 2014 only reached 789 kilometres (km). In those 36 years, toll roads in Indonesia only grew 21.91 km on average each year.
During that period, national roads or arterial roads were the lifeline for regional connectivity in Indonesia. On the other hand, vehicle growth could not be prevented.
The monetary crisis and less than ideal regulations and cooperation schemes during that era had hindered the construction of new toll segments in the country.
The government had been tinkering with regulations and cooperation schemes from 1998 to 2004 by issuing public-private partnership for infrastructure provision and establishing the Toll Road Regulatory Agency (BPJT) to boost toll road growth.
The length of operational toll roads from 2015 to 2019 grew 1,298 km. Then, the length continued to grow 246 km in 2020, 122 km in 2021, and 142.11 km last year.
Hence, the length of operational toll roads in 2022 reached almost 2,600 km. In the future, the government is targeting to construct 1,000 km of new toll roads by 2024.
The realisation of operational toll roads is related to the role of business entities. BPJT recorded that, until January 2023, there were 82 toll road concessions in the country with 55 concessions that are operational.
Jasa Marga is still the main toll road player in the country. Out of the 55 operational toll road concessions, Jasa Marga at least holds 25 operational toll road concessions.
In the first half of 2022, Jasa Marga operated 1,260 km of toll roads from their toll road concessions that reached 1,809 km in total with a traffic volume of 3.3 million vehicles. Their newest operational toll road is Manado-Bitung toll road that operated in 2022.
Jasa Marga is pursuing to increase their operational toll roads with South Jakarta-Cikampek II toll road, Ngawi-Kertosono-Kediri toll road, Bogor Ring Road, Probolinggo-Banyuwangi toll road, and Yogyakarta-Bawen toll road.
Those toll segments are set to be completed gradually from 2022 to 2025. To ensure that the new toll road construction and growth program continues, the issuer with the ticker code JSMR is continuously recycling their assets.
“In line with our strategy and needs, we are also supporting the government to provide connectivity in Java and outside Java,” Jasa Marga President Director Subakti Syukur said.
Financial performance
State-owned Enterprises (SOE) Minister Erick Thohir stated that, throughout last year, Jasa Marga was one of the state-owned companies with a healthy financial performance amid the completion of existing projects.
Erick explained that Jasa Marga can still contribute to the consolidated profit of SOEs with a net profit of more than Rp2 trillion.
“Jasa Marga is healthy [with profit] surpassing Rp2 trillion,” Erick Thohir said.
Meanwhile, an SOE observer from Universitas Indonesia, Toto Pranoto, reckoned that the plan to develop Trans-Java toll road is still ongoing, especially for its southern side. The issuer with the ticker code JSMR is reckoned to seize the opportunity.
“The important point is to determine when to conduct asset divestment and when to operate the asset.”
Toto explained that JSMR’s effort to maintain their financial performance through asset recycling is a suitable strategy to maintain cash flow. Funds from asset divestment significantly impact the company’s cash flow that can be used to construct the next toll road project.
He explained that JSMR’s debt to equity ratio (DER) at the end of 2021 was around 2.3. According to him, that position is relatively moderate compared to other construction SOEs.
Besides that, punctual project construction can help the company’s financial performance by preventing cost overrun.
“The longer Trans-Java toll road, the more passenger and cargo mobility will increase. It can also increase regional economic growth,” he said.
