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.
Investor Daily - Penyesuaian tarif tol beri kepastian bagi investor
17 January 2024
By Heru Febrianto and Euis Rita Hartati
Jakarta, ID – The government will gradually adjust the tariff of 13 toll roads in the first quarter of 2024. This policy will provide legal certainty for investors as the tariff adjustment of toll roads has been specified in Law Number 2 of 2022 on Second Amendment to Law Number 38 of 2004 Regarding Roads.
The government through the Public Works and Housing (PUPR) Ministry has indicated that the investment required to support toll road construction in Indonesia from 2020 to 2024 reaches Rp500 trillion. That amount refers to the 2020-2024 National Medium-term Development Plan (RPJMN).
However, the infrastructure financing capacity of the State Budget (APBN) is limited to Rp623 trillion, which only covers 30% of the total investment required for infrastructure development in the 2020-2024 RPJMN, amounting to Rp2,058 trillion.
From 1978 to mid-January 2024, the total length of toll roads in Indonesia has reached 2,816 km. This includes 1,782.47 km in Java, 865.43 km, 97.27 km in Kalimantan, 61.64 km in Sulawesi, and 10.07 km in Bali. Meanwhile, there are currently 73 toll segments operating and 23 toll segments in construction.
In Indonesia, 59 toll road business entities manage these various toll segments. Across these 73 toll segments, there are 132 rest areas. As of 2023, the operational toll roads have covered a distance of 217.77 km.
Based on the data from the PUPR Ministry through the Toll Road Regulatory Agency (BPJT), the 13 toll segments that will have their tariff adjusted in the near future are Surabaya-Gresik toll road, Kertosono-Mojokerto toll road, Bali-Mandara toll road, Serpong-Cinere toll road, Ciawi-Sukabumi toll road, Pasuruan-Probolinggo toll road, and Makassar toll road section 4.
Besides that, there are Cawang-Tomang-Pluit and Cawang-Tanjung Priok-Ancol Timur-Jembatan Tiga/Pluit toll segments in Jakarta Inner Ring Road, Gempol-Pandaan toll road, Surabaya-Mojokerto toll road, Cikampek-Palimanan (Cipali) toll road, Cibitung-Cilincing toll road section 1, and Jakarta-Tangerang Integration toll road and Tangerang-Merak toll road (Tomang-Tangerang Barat-Cikupa).
Article 48, Paragraph 3 of Law Number 2 of 2022 on Second Amendment to Law Number 38 of 2004 Regarding Roads mentioned that the evaluation and adjustment of toll road tariffs is carried out every two years. This process is guided by considerations such as inflation and an evaluation on whether the toll roads meet the minimum service standards.
BPJT Head Miftachul Munir explained the tariff of the 13 toll segments was scheduled to be adjusted in 2023. However, as of now, they are still on process, so the tariff will be adjusted in 2024 in accordance with the regulation.
“Next, the tariff of [toll] segments that is scheduled to be adjusted in the first quarter of 2024 will be implemented after the toll roads fulfil their minimum service standards. Meanwhile, for new toll segments, their tariff decree will be issued if they have met their SOP (standard operating procedure),” Miftachul said when he was contacted by Investor Daily in Jakarta on Tuesday (16/1/2024).
According to Miftachul, the tariff adjustment of toll roads will be implemented in stages. Meanwhile, in terms of the determination and the enforcement processes, BPJT is currently waiting for directives from PUPR Minister Basuki Hadimuljono.
Besides the law, Miftachul said that tariff adjustments were also needed to ensure a conducive toll road investment climate. So, the trust of investors and market players in the prospective toll road industry in Indonesia can be maintained.
“Tariff adjustments aim to ensure that toll road operators will maintain a level of service that is consistent with the minimum service standards for toll roads,” he added.
Public transportation observer Djoko Setijowarno said that, even though a routine increase in the tariff of toll roads is specified in a law, its implementation has to be evaluated by BPJT, particularly concerning the adherence to minimum service standards. “Toll road operators usually make a presentation. If the evaluation from BPJT is good, then it is feasible. If not, then it cannot be increased,” Djoko said to Investor Daily on Tuesday (16/1/2024).
According to Djoko, a clear regulation on toll road tariffs will attract investors as it offers legal certainty for investors who want to invest in Indonesia. Moreover, investing in toll roads is a high-risk investment due to the substantial associated costs.
Based on his observations, toll road operators currently prioritise enhancing services and facilities for users. “Not all of them are great, but most are,” he stated.
However, Djoko mentioned that one of the purposes of constructing toll roads was to streamline logistics transportation. Hence, according to Djoko, tariff adjustments should primarily focus on private vehicles.
He also mentioned that over-dimension and overload vehicles were harming toll road operators and increasing the risk of accidents. Moreover, inefficiencies resulting from damaged roads will increase air pollution due to the excess gas produced.
Based on the data from Indonesia Toll Road Association (ATI), vehicles that tend to be over-dimension and overload vehicles were vehicles in classes 2 and 3. For now, vehicles in classes 4 and 5 are compliant. Road damages from over-dimension and overload trucks also increase the budget for maintaining national roads, toll roads, and provincial roads, reaching around Rp43.45 trillion annually.
He is optimistic about legal certainty, particularly regarding tariffs, attracting investor interest. Moreover, toll roads can also generate a multiplier effect, such as driving the tourism sector.
BPJT reported that investment realisation in the toll road sector reached Rp794.85 trillion in 2022. Based on BPJT’s 2022 annual report, toll road investment realisation in 2022 grew 7.8% from Rp736.73 trillion in 2021. Notably, foreign direct investment (FDI) contributed Rp9.9 trillion and international financing Rp4.29 trillion. Besides that, financing from state-owned enterprise (SOE) banks reached Rp84.56 trillion, while financing from non-SOE banks reached Rp123 trillion.
Infrastructure Financing Director General of the PUPR Ministry Herry Trisaputra Zuna explained that, in an effort to narrow the financing gap for toll road infrastructure, the PUPR Ministry through the Infrastructure Financing Directorate General is introducing an innovative alternative infrastructure financing solution known as the "3 Bold Actions." This initiative is designed as a breakthrough to address and mitigate the challenges posed by the infrastructure financing gap.
The three actions include the “Fast Track” that involves the expedited implementation of public-private partnership (PPP), the optimisation of investment commitments through supporting innovations and government guarantees, as well as the integration of Environmental, Social, and Governance (ESG) aspects in the PUPR Ministry’s PPP projects. Besides that, to boost the investment interest of investors, the PUPR Ministry is also planning to revise the project tender method.
In his report, Herry disclosed that the government is committed to prioritising the completion of land acquisition for a project before initiating the tender process. This approach aims to provide investors with a higher level of certainty regarding the construction of the project. “We will carry out the procurement after the tender or once the location has been determined. Ideally, we aim to secure 100% of the land before initiating the tender process,” Herry stated.
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