Plus Berhard Ready to Complete Cikampek - Palimanan Toll Road
By Imam Mudzakir
JAKARTA - Plus Expressways Berhard is ready to finalise the Cikampek - Palimanan toll road project. The toll road company and investor from Malaysia is targeting to have commenced constructing the 116km-long toll road by the end of this year or no later than January 2012, following the [expected] completion of its negotiation process with banks before December 2011.
Plus Expressways Berhard Managing Director, Dato' Noorizah Hj Abd Hamid, said that his company is committed to continue the Cikampek - Palimanan toll road construction project, whose land acquisition progress has reached 92.14 percent. This is because the company has rated this toll road project as highly potential, especially from the business perspective. "We support the realisation of Transjava toll road network, so this year we focus to work on the Cikampek - Palimanan toll road project, we are even willing to sell all our shares in the Cimanggis - Cibitung toll road to the Bakrie Group to concentrate on the Cikampek - Palimanan toll road," he said, in Jakarta last week.
Noorizah explained that the company's seriousness to finalise the Cikampek - Palimanan toll road is not limited to that. Plus Berhard has set aside about US$ 300 million to meet the equity in the joint venture company PT Lintas Marga Sedaya. In this toll road business entity (BUJT), the Plus Berhard has a 55 percent stake, with the rest owned by PT Bhaskara Utama. The total investment in the toll road is estimated at Rp 11.75 trillion, with some 30 percent of it provided by the BUJT's equity.
"The rest is met from the banking syndicate. The banks themselves have become available, but they have requested that the land acquisition is 100 percent completed before the loan can be disbursed. So, if the project is not yet being worked on now, it is the land [acquisition] condition has not been fully resolved; the worries are that there will be a problem down the road, such as a half-way halt to the contract, while the investor must still pay the debt and its instalments," he said.
Because of that condition, he said, Plus Berhard through PT Lintas Marga Sedaya has yet to begin construction because they still must negotiate with the banks. Currently, the negotiation with the banks is being finalised. Plus Berhard itself considers the wishes of the banks as reasonable, given that the bank loan to be provided amount to nearly Rp 8 trillion, which means the risk is very high, anyway.
"That's why we ask the government to accelerate the process of land acquisition for the Cikampek - Palimanan toll road, as actually only a little bit more is left to do. The government needs to do is because the government also wants to ensure the connectivity of Transjava in 2014," he said.
Head of Land Acquisition Sub-Division of Directorate General of Highways of the Ministry of Public Works, Ahmad Hery Marzuki, said that, currently, the land acquisition process for the Cikampek - Palimanan toll road has reached 92.14 percent of the total requirement of 1,021ha. The remaining land to be acquired has been constrained due to a shift in the project's ground plan in response to the involvement of a waqf land [land designated for religious purposes].
The Cikampek - Palimanan toll road project is divided into six sections, namely Section I Cikopo - Kalijati (29.12km), Section II Kalijati - Subang (9.56km), Section III Subang - Cikedung (31.37km), Section IV Cikedung - Kertajati (17.66km), Section V Kertajati - Sumberjaya (14.51km), Section VI Sumberjaya - Akhir (13.78km). For Sections I - V, the land acquisition process has become final, only Section VI has remained, with a 58.34 percent completion thus far, i.e., the land acquisition has only reached Section VI B. The target is to achieve a 100 percent completion by December 2011, by utilising the consignment system.
Meanwhile, the banks involved to finance the Cikampek - Palimanan toll road project are Bank Mandiri and Bank BCA as syndicate leaders, as well as an Islamic bank from Malaysia.
Noorizah explained that, until now, only the Cikampek - Palimanan toll road has yet to have its Toll Road Concession Agreement (PPJT) amended. The Cikampek - Palimanan toll road is one of 24 toll roads that BPJT have evaluated; as a consequence of the BUJT's the seriousness to continue the project, the BUJT and the government must amend the PPJT.
"We are ready for the amendment. But now it is still under discussion with the government. In the near future, we will, through the BUJT, meet the government to sign the contract amendment," he explained.
Meanwhile, Head of the Toll Road Regulatory Agency (BPJT), Ahmad Ghani Ghazali, said that until now there is no common ground yet in the tripartite agreement between the government, the BUJT, and the banks, in terms of clarifying a number of articles in the new PPJT. The new PPJT will be a guarantee for the banks to fund the highway project in question.
According to Ghani, the new PPJT will include three points that have thus far become the obstacles for the banks in financing the project. First, it concerns the right of the banks to step in the event of a default or injury to the concession agreement by the business entity or the government. The second point outlines the procedure for the appointment of a new business enterprise or acquisition of the concession rights after a default. Third, in the event of a contract termination with the old business enterprise, while a new one is not yet appointed, the banks can undertake the management of the toll road operation funds.
"Indeed there has been no opportunity yet, we are still waiting for the investor. The [draft] agreement has been filed by the banks to minimise risk. The agreement will also serves as a government guarantee to protect the banks in the event of a default," he explained.