State Enterprises Minister Dahlan Iskan said the construction of a 2,700 kilometer toll road connecting provinces in Sumatra island was scheduled to break ground next month.
“The ground-breaking ceremony will be held on Sept. 9,” Dahlan said on the sideline of a meeting with Coordinating Minister for the Economy Chairul Tanjung on Monday.
The cost of construction is estimated at Rp 300 trillion ($23.6 billion).
Chairul said the project still awaits the presidential regulation, which will detail on the direct appointment for the toll road construction.
“We will schedule a cabinet meeting led by the president after Aug. 17,” he added.
As the construction of the toll road will be funded by the state budget, the president will have to stipulate the legal framework for the project to be developed.
According to the plan, the government will assign Hutama Karya to undertake the project as it is the only large state infrastructure firm not listed on the stock exchange.
Dedy Priatna, deputy for infrastructure at the National Development Planning Agency, said the government would focus its effort in the Trans-Sumatra toll road construction in two sections namely Medan-Binjai and Palembang-Indralaya.
The toll road will comprise 23 different sections.
Also in the meeting, Chairul said he had instructed the transportation ministry to undertake a feasibility study to look for a location to build a harbor as an alternative for Merak port, which connects Java with Sumatra.
“We want to improve the connectivity between Sumatra and Java,” he said. “I also instructed the public works ministry to deepen the port and ASDP [state-owned ferry operator] to buy bigger ships so that traffic between Merak and [Lampung’s] Bakaheuni can be more efficient.”
Bambang Susantono, the deputy to the transport minister, said Merak could no longer be expanded as there was no more land available near the port.
“The only alternative is to build a port in another location,” he added.
In related news, Achmad Gani Ghazali, the head of Toll Road Regulatory Agency (BPJT), was quoted by Investor Daily on Sunday as saying that another toll road in Sumatra, which will be 61.7 km long, is also set to break ground in September.
The toll road, which connects the North Sumatra capital Medan to the Kuala Namu International Airport in Deli Serdang, is estimated to cost Rp 6.37 trillion.
Land acquisition for the project already progressed to 78.75 percent.
The winning tender for the project is likely by a consortium of state companies, the only party that submitted an offer to the government.