Ismeth S. Abidin

The Impact of Land Acquisition Delay in Toll Road Development

The development of toll road infrastructure in Indonesia is very decelerate where from 1500 km that was planned in 2006, but the realization is only 749,12 km operation in 2010, meanwhile the land that will be acquisited in Trans Java toll road is 6,272.84 Ha, but only 1,400 Ha have been acquisited. From the facts above that land acquisition is very significant point in toll road development. There are many efforts how to mitigate these risks such as land capping revolving fund, but this effort still meeting constraints. At this paper, we try to examine how the impact of land acquisition delay in toll road infrastructure development in Indonesia with system dynamic method, so we can see what their impact to toll road development.

Financial Innovation for Toll Road Infrastucture Development

The development of toll road infrastructure in developing countries included Indonesia still slow down. There are many problems to build toll road infrastructure, one of them is financing. The need of toll road infrastructure investment in Indonesia is Rp66,751.95 Billions to build 768.65 km of toll road, and need Rp10,267.37 Billions at Batch 2 and 3 in still bidding preparation to build 154.24 km, and also need Rp7,492.47 Billions to build 125.42 in Batch 4 of toll road, and other toll road is 877.09 km which is need the investment is Rp99,065.15 Billions, so the total of toll road investment financing is Rp216,828 Billions to build 3,087.88 km of toll road. But the Government of Indonesia provide only Rp6,578.70 Billions to participate to build 70.51 km of toll road, there is a gap financing is around 3% between government and private investor. At this paper, we want to introduce what is financial innovation, what is the function of financial innovation that can accelerate and expand toll road investment, what is the impact of toll road financial innovation that can increase economic growth, and how to use financial innovation for toll road infrastructure development. And we conclude that financial innovation is the method to accelerate and expand toll road investment in Indonesia, and increase economic growth; and also this method can use to other developing countries.

The Risks of Toll Road Infrastructures in Indonesia

The development of toll road infrastructure in Indonesia is still slow down, if we compare the growth of toll road before crisis from 1978 until 1998 was 13.66% and after the crisis from 1999 to 2010 was 2.14%. Otherwise, the length of toll road in Indonesia until now has 742 km, operated by State Owned Enterprise (Jasa Marga) is 78% and private is 28%.The fact of that data above that toll road investment in Indonesia is not interesting to private investor because investment in toll road development riskier than other infrastructure investment. At this paper, we try to explain the development and toll road infrastructure risks in Indonesia.

The Model of Toll Road Length to Population in East Asia

The length of toll road in China so fantastic, there are currently 53,600 km of toll road traversing the country – the second longest in the world behind the United States, which has 89,000 km. And China plans to have 85,000 km of toll road by 2020.Meanwhile, in East Asia including Indonesia, Malaysia, Philippines, and Thailand, in 2006 there were respectively 608 km, 2,332 km, 181 km, and 176 km. In this paper wants to see the relationship of length of toll road to population as independent variable and foreign direct investment (FDI), Toll road investment, land area, gross domestic product (GDP) as dependent variable.The method of this study use econometric analysis on pooled data.The result of this study will see how China and Malaysia maintain their toll road investment to sustain their GDP, and how the length of toll road growth in Indonesia, Philippines, and Thailand lower than China or Malaysia.