17 February 2020 (closed)
USD/IDR (13,735) +18.00 +0.13%
EUR/IDR (14,833) +18.07 +0.12%
Jakarta Composite Index (5,867.52) +0.58 +0.01%
State-owned airport services company Angkasa Pura II, which operates airports in the western part of Indonesia, says construction of the third runway of the Soekarno-Hatta International Airport (located just outside Jakarta) will start in April 2017. This new runway, which requires about IDR 2 trillion (approx. USD $150 million) worth of investment, is expected to be ready for use in mid-2018. Soekarno-Hatta International Airport, the country's main port of entrance, is target of an ambitious expansion and renovation program with the aim to boost competitiveness by raising the airport's passenger capacity and flight frequency.
The third runway will have a length of 3,000 meters and a width of 60 meters. Currently, with the two existing runways, Soekarno-Hatta International Airport has a flight capacity of 72 flights per hour. However, after the third runway is operational, this figure is estimated to rise to 114 flights per hour.
Passenger capacity at Soekarno-Hatta International Airport, Indonesia's busiest airport, is targeted to have expanded to 61 million people (per year) by the end of 2017, up 84 percent from a passenger capacity of 33 million passengers in late-2016. This growth is made possible by the completion of Terminal 3 as well as the renovations at Terminals 1 and 2. Although Terminal 3 opened in August 2016 construction continues well into 2017 when the terminal's full passenger capacity (25 million per year) is expected to be reached. However, in the years ahead more expansion is required considering by 2025 Soekarno-Hatta International Airport is expected to be visited by 100 million passengers.
The third runway will be built on a 216 hectares-sized plot of land at the northern side of the airport. Angkasa Pura II already owns 42.85 hectares in that area, and therefore the remaining 173.2 hectares need to be acquired from local landowners. Last year it was reported that the Banten Province already approved the location of the third runway. However, Angkasa Pura II still needed to negotiate the land acquisition with three villages (desa) - Desa Rawa Burung, Desa Rawa Rengas and Desa Bojong Renged - as well as two administrative districts (kelurahan). The desa and kelurahan are the lowest levels of government in Indonesia.
Muhammad Awaluddin, President Director of Angkasa Pura II, said his company already controlled 20 percent of the required land for the establishment of the third runway by 9 February 2017. Although Awaluddin is optimistic that construction of the new runway can start in April 2017, history shows that land acquisition is a lengthy and complicated process in Indonesia that forms a major obstacle to infrastructure development. Therefore, Indonesia Investments expects to see a delay in construction of the third runway.
The third runway is part of the Soekarno-Hatta International Airport Masterplan that was approved by the Indonesian government in 2010. Therefore, Awaluddin hopes to see government support when negotiating the land acquisition. Without the government actively supporting Angkasa Pura II in this process (as was the case in the Batang power plant project and the Balikpapan-Samarinda toll road), then it can become a lengthy process.
The Kantor Jasa Penilai Publik is the institution that determines the price of the land. Besides the third runway, Angkasa Pura II will also construct the east cross taxiway to enhance the movement for airplanes. This taxiway should be completed by 2018 and will require IDR 1.15 trillion worth of investment.