JSMR readies to build toll roads outside Java

JAKARTA. State-run toll road operator PT Jasa Marga Tbk. (JSMR) plans to build toll roads outside Java with Rp 10 to Rp 15 trillion in funds to ease infrastructure bottlenecks after the passage of a land acquisition law, executives say.

Jasa Marga, which controls 73 percent of all toll roads operating in Indonesia, also sees doubling revenues in 2014 from this year’s Rp 5.4 trillion forecast, after 10 Java projects will become fully operational, having been worked on since 2010.

Jasa Marga has been working on 10 toll routes in Java with the lengths of 215 kilometers since 2010, taking up Rp 24 trillion in investment for a project that is expected to be fully operational in 2014.

“In the coming years, we will challenge ourselves to build toll roads outside Java,” Adityawarman, the company’s newly appointed president director who succeeded Frans Sunito as of Monday, told a press briefing.

Director of business development Abdul Hadi said the projects were yet to be decided but cited Medan–Binjai and Medan–Kualanamo as examples, as Jasa Marga would prioritize routes that are connected with existing toll roads and also those that have good business prospects.

Bad roads have disrupted goods and services distribution across the archipelago, resulting in high costs and longer traveling times. But the new land law is expected to ease procurement for public purposes and help solve infrastructure bottlenecks, Abdul Hadi said.

“We have a huge financial capability of between Rp 10 and Rp 15 trillion to build new routes outside of the ten that we are currently working on,” Jasa Marga’s finance director Reynaldi Hermansyah said.

Jasa Marga currently operates 544 km-long toll roads and eyes a further 750 km within the next three or four years. The company allocated Rp 7.7 trillion for capital expenditure this year, for construction spending mainly for its subsidiaries as part of the effort to expand its toll road network.

As for funding the company’s expenditures as well as investment plans, 30 percent would come from Jasa Marga’s internal cash and the remaining 70 percent would be from debt, both bank loans and bond issuance. In 2010, Jasa Marga raised Rp 1.5 trillion from the bond market.

“We don’t have the necessity to issue bonds for refinancing, but if the moment is good, for instance if yield drops, we will assess such opportunities,” Reynaldi said. “The philosophy is to take bank loans in the first place and then issue bonds for refinancing.”

Jasa Marga saw 2011 net profits growing by double digits from Rp 1.19 trillion in 2010, as revenues grew almost 10 percent to Rp 4.8 trillion, he added, without disclosing exact figures. Vehicles using the company’s toll road network increased by 4 to 5 percent to more than 1 billion.

As for this year, Jasa Marga eyed another 4 to 5 percent increase in traffic, which would drive up revenues by 12.5 percent to Rp 5.4 trillion in 2012, according to Reynaldi.

Jasa Marga’s market value was Rp 28.73 trillion on Monday, with it trading at Rp 4,225 a piece, having risen 45 percent in the past year. (Esther Samboh/The Jakarta Post)