Road infrastructure: Leveraging the North Sumatra East Coast toll road

  • 22 Feb 2024

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 Jalan: Manfaatkan Tol Pantai Timur Sumut

22 February 2024

Bisnis, Medan – Regions along the east coast of North Sumatra are expected to take advantage of the toll road in the area to attract investors to their respective regions.

Acting North Sumatra Governor Hassanudin highlighted the growing connectivity among North Sumatra and its neighbouring provinces, such as Riau and Aceh, following the construction of the toll road. The Medan-Binjai-Stabat toll segment has extended to Langsa and Aceh, while the Tebingtinggi-Indrapura-Limapuluh toll segment is set to connect the east coast to both provinces.

In the future, Hassanudin hopes that the Rantau Parapat toll road will be connected to the Riau toll road. Regions along the east coast will be connected and become a gateway for goods and passengers from Riau and Aceh.

“We have to take advantage of the location with road infrastructure, Kuala Tanjung Port, and Belawan Port,” Hassanudin said in his statement on Wednesday (21/2).

Hassanudin said that the connectivity was expected to attract the transportation of goods from Aceh and Riau to North Sumatra. He also views the connectivity as an opportunity to attract investments to North Sumatra. He hopes that each region can create a conducive investment climate by offering competitive wages for workers, affordable transportation costs, as well as reasonable land prices and leases.

Previously, at the opening of the Pre-Regional Development Planning Forum (Musrenbang) on the Regional Government Work Plan (RKPD) of North Sumatra for 2025 on the East Coast Zone in Asahan Regency on Tuesday (20/2), Hassanudin addressed several strategic issues. These included downstreaming in the processing industry, poverty, disparity, urbanisation, unemployment, entrepreneurship and small and medium enterprise (UKM) development, slums, spatial planning, and the provision of basic needs such as sanitation and clean water.

“The Pre-Musrenbang was conducted so that each region along the east coast that is part of the forum can enhance, refine, and articulate their plans. Hence, we must hold a discussion to incorporate the result in the regional development programmes of each region along the east coast,” Acting Governor Hassanudin said in front of the participants of the Musrenbang on the RKPD of North Sumatra for 2025 on the East Coast Zone.

Turmoil in Riau 

Meanwhile, in Riau, Indonesian Employer Association (Apindo) is suggesting the plan to increase the tariff of the Pekanbaru-Dumai toll road to be reviewed.

Apindo Chairperson for Riau Wijatmoko Rah Trisno revealed that the association was not in favour of the plan due to the current economic situation.

“We do not support the tariff increase of the Pekanbaru-Dumai toll road. We are asking the government to review the decision as a hike in the toll road tariff will increase the transportation costs of businesses,” he revealed.

In the upcoming year, Riau's economy is anticipated to confront significant challenges due to the deceleration of the province's economic growth in 2023. According to BPS, Riau's economic growth for the past year was only 4.21%, a decrease from the previous year's growth of 4.55%.

Wijatmoko mentioned that the toll road tariff increase would compel businesses to increase the prices of their goods and services, subsequently leading to an increase of prices on the consumer level. Ultimately, an increase in the prices of goods on the consumer level would lower demand for goods and services.

Hence, he hopes that the government will recalculate, taking into account the risks associated with the toll road tariff increase.

“We hope that they will recalculate the risks and impacts on the economy of Riau amid the current condition and situation,” he stated.

Riau Chamber of Commerce and Industry (Kadin) Executive Director Kholis Romli reckoned that the government's decision to raise the toll road tariff was too aggressive, especially considering the province's weakened economy.

“We from Riau Kadin sees that the tariff increase of the Pekanbaru-Dumai toll road by 44.72% is too aggressive. It is not empathetic to the economic condition that is not yet stable,” he said.

According to him, the process of increasing the toll road tariff was abrupt, lacking transparency, and excluded the business sector. Based on the analysis of Riau Kadin, the toll road tariff increase will increase the prices of products and services.

“Regarding the impact, it will be seen at the end of the first quarter of 2024.”

Based on the records of Indonesia Multimodal Transport Association (IMTA), the new toll road tariff constitutes 5%-10% of the cost component of short-distance expeditions, particularly affecting businesses in the logistics service sector.

The tariff of the Pekanbaru-Dumai (Permai) toll road will increase by Rp53,000 for class 1 vehicles from Rp118,500. From 4 March 2024, the tariff for small vehicles will increase to Rp171,500, which is an increase of 44.72%.

This tariff increase was announced through Public Works and Housing (PUPR) Minister Decree Number 415/2024 on Toll Road Tariff Adjustment for Pekanbaru-Dumai Toll Road. Signed by Minister Basuki Hadimuljono on 19 February 2024, the decree will come into effect 14 calendar days after its issuance.

“The updated tariff for the Pekanbaru-Dumai toll road is also applicable to class 2 vehicles, which now incur a fee of Rp257,000, while class 3 vehicles face a charge of Rp257,000. For classes 4 and 5, the revised tariff is Rp343,000.”

In another development, West Sumatra Provincial Government mentioned that the construction of the flyover in Sitinjau Lauik has been entrusted to PT Hutama Karya (Persero).

West Sumatra Governor Mahyeldi said that, for the construction, West Sumatra Provincial Government would procure 18.8 hectares of land.

“The land procurement planning document (DPPT) states that the consortium of PT Hutama karya and PT Hutama Karya Infrastruktur appointed by the investor has obtained a permit to initiate and procure [the project] using the public-private partnership (PPP) scheme with West Sumatra National Road Management Agency (BPJN),” he said in his statement.

He mentioned that, with Hutama Karya as the contractor, the construction of the Sitinjau lauik flyover was predicted to be completed in around 2.5 years in 2026.

Mahyeldi explained that, according to the letter received from the Highways Directorate General of the PUPR Ministry regarding the DPPT on the determination of the location of the Sitinjau Lauik flyover project, the next process is to issue a decision letter to establish a land verification team.

“Following the letter from the Highways Director General that acts as the cover letter for the DPPT, we will immediately establish a land verification team with a decision from the governor,” he mentioned. The verification team that will comprise of the West Sumatra Public Housing and Settlement Area Department will be responsible for conducting verifications and disseminating information at various locations to the public.

The governor has instructed the regional apparatuses of West Sumatra Provincial Government involved in the verification team to promptly and efficiently follow up on all technical procedures related to the implementation of the Sitinjau Lauik flyover.

“The flyover is longed for by road users,” he said.

Mahyeldi stated that, according to the letter, the Director General of Highways mentioned that the DPPT for the Sitinjau Lauik flyover has been prepared, with the planned length spanning approximately 2.78 km.

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