Jasa Marga is the clear dominant force in Indonesia's toll road industry. Besides the aforementioned acquisitions Jasa Marga is currently also engaged in new toll road projects that are part of the Trans-Java and Trans-Sumatra toll road projects as well as toll roads on other islands. In the first half of 2016 Jasa Marga's toll road network is estimated to grow to a length of 608 kilometers, implying it would control about 64 percent of Indonesia's total toll road industry.

The four toll road concessions that are to be acquired by Jasa Marga are Solo-Ngawi (Central Java), Cinere-Serpong (West Java), Ngawi-Kertosono (East Java), and Batang-Semarang (Central Java). The first three of these toll roads will be acquired from privatetly-held firm Thiess Contractor Indonesia. The last one (Batang-Semarang) was won through a re-tender after the inital winner defaulted.

Toll Road Concessions to be Acquired by Jasa Marga:

Toll Road Length
(IDR trillion)
Batang-Semarang   75.0      7.23
Solo-Ngawi   90.1      5.14
Ngawi-Kertosono   87.0      3.83
Cinere-Serpong   10.1      2.21

Source: Investor Daily

Meanwhile, construction firm Waskita Karya will acquire the Kanci-Pejagan (West Java), Pejagan-Pemalang (West/Central Java), and Ciawi-Sukabumi (West Java) toll roads from MNC Infrastruktur. Furthermore, it acquired several others including the Pemalang-Batang toll road in Central Java (after acquiring a 60 percent stake in operator Pemalang-Batang Toll Road) as well as the Pasuruan-Probolinggo toll road in East Java (after acquiring shares of Wahana Multi Insani and Sembilan Benua Makmur).

Herwidiakto, General Director at Waskita Toll Road (a subsidiary of Waskita Karya), said the Waskita Group will acquire nearly 410 kilometers of toll road concession in the period ahead. For the construction of the roads it plans to partner with the private sector.

Toll Road Concessions to be Acquired by Waskita Karya:

Toll Road Length
(IDR trillion)
Kanci-Pejagan   35.0      2.44
Pejagan-Pemalang   57.5      5.52
Pemalang-Batang   39.2      4.08
Pasuruan-Probolinggo   31.3      3.55
Bekasi-Cawang-Kampung Melayu   21.0      7.20
Cimanggis-Cibitung   25.4      4.52
Ciawi-Sukabumi   54.0      7.77
Cibitung-Cilincing   34.0      4.22
Kayu Agung-Palembang-Betung  111.7     14.43

Source: Investor Daily

When two state-controlled companies take over various toll road concessions from the private sector questions rise how come the private sector has been slow to construct toll roads. It is indeed known that Indonesia's banking sector (particularly the state-controlled banks) is more willing to provide loans to Indonesian state-controlled entities rather than to private companies (this is related to a higher degree of confidence in state-owned companies' ability to repay debt in the future). Moreover, in terms of land acquisition trouble, state support can speed up the process significantly (obviously state-owned or controlled companies are closely connected to the central authorities and therefore can rely on easier support during the land acquisition process).

However, Fatchur Rochman, Chairman of the Indonesian Toll Road Association (ATI), says these acquisitions by Jasa Marga and Waskita Karya should not lead to a general conclusion that the private sector fails to develop toll roads in Indonesia. On the contrary, toll road concession acquisitions are a common phenomenon in Indonesia, Rochman says. He added that the key to rapid toll road construction is the quick completion of the land acquisition process. Were the government to support companies in this process, then the whole construction would be sped up significantly, whether a private or state-owned firm is the developer.

Toll Road Development Indonesia 2015-2019

Enhancing Indonesia's toll road network is part of the government's efforts to improve connectivity across the land hence curtailing high logistics costs and improve the investment climate. In the 2015-2019 period Indonesia wants to add 1,000 kilometers of toll road to the nation's existing toll road network that currently stretches for 950 kilometers. It is an ambitious target that is undermined by Indonesia's notorious land acquisition troubles (many infrastructure projects in Indonesia are delayed - or cancelled altogether - because local land owners request extremely high prices for their land). Most of the additional toll roads that are currently being developed - or are set to start to be developed soon - are part of the Trans-Sumatra (632 kilometers) and Trans-Java (922 kilometers) projects on Indonesia's two most populous islands.

Indonesian Government's 2015-2019 Toll Road Development Program:

Toll Roads on Sumatra
Medan-Binjai   15.8
Medan-Kuala Namu-Tebingtinggi   61.7
Palembang-Indralaya   22.0
Kayuagung-Palembang-Betung  111.7
Bakauheri-Terbanggi Besar  138.0


Toll Roads on Java
(Part of the Trans-Java)
Cikampek-Palimanan  116.8
Pejagan-Pemalang   57.5
Pemalang-Batang   39.2
Batang-Semarang   75.0
Semarang-Solo   72.6
Solo-Ngawi   90.1
Ngawi-Kertosono   87.0
Mojokerto-Jombang-Kertosono   40.5
Mojokerto-Surabaya   36.3
Gempol-Pasruruan   34.2


Toll Roads in the Greater Jakarta Area
Akses Tanjung Priok   16.7
Cengkareng-Batuceper-Kunciran   14.2
Kunciran-Serpong   11.2
Serpong-Cinere   10.1
Cinere-Jagorawi   14.6
Cimanggis-Cibitung   25.4
Cibitung-Clincing   34.0
Depok-Antasari   21.5
Bekasi-Cawang-Kampung Melayu   21.0
Bogor Ring Road    11.0


Toll Roads on Java
(Not part of Trans-Java)
Cileunyi-Sumedang-Dawuan   58.5
Ciawi-Sukabumi   54.0
Gempol-Pandaan   13.6
Pandaan-Malang   37.6
Pasirkoja-Soreang   10.6
Porong-Gempol   10.6


Toll Roads on Kalimantan Length
Balikpapan-Samarinda   99.0


Toll Roads on Sulawesi
Manado-Bitung   39.0

Source: Investor Daily