Indonesia to spend $70 billion on new toll road network

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Indonesia To Spend $70 Billion On New Toll Road Network

Indonesia’s President Joko Widodo is planning an unprecedented $70 billion splurge on toll roads to help connect the island archipelago. By 2024, Indonesia’s fee-charging highways will stretch for 5,400 kilometers, almost triple the length of the current network, Danang Parikesit, head of the country’s toll-road regulator, told Bloomberg News.

The government wants to make it easier to haul food and fuel across the country. But there is concern about how the highways will be funded. Analysts have said that the funding burden will strain Indonesia’s banking system and the balance sheets of local construction companies.

More than half the new toll roads will be rolled out on Sumatra to connect the two ends of the large island. In addition to the highways, the regulator is also studying the possibility of building a bridge from peninsular Malaysia to Sumatra, and a bridge connecting Singapore to Bintan island, Parikesit said.

The government cannot foot the whole bill itself and is seeking other sources of capital such as bank loans and private funding, he added.

The roads rollout is central to the government’s ambitious plans for more than $400 billion of building projects to modernise Indonesia under Widodo when he begins his second term in October.

The extensive sprawl of Indonesia, a nation dispersed across 17,000 islands, is a logistical nightmare and can send the cost of everyday items soaring and hampering development in tough-to-access locations. So the only way to generate faster economic growth is through connectivity, Indonesia’s development planning minister Bambang Brodjonegoro noted.

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Indonesia’s President Joko Widodo is planning an unprecedented $70 billion splurge on toll roads to help connect the island archipelago. By 2024, Indonesia’s fee-charging highways will stretch for 5,400 kilometers, almost triple the length of the current network, Danang Parikesit, head of the country’s toll-road regulator, told Bloomberg News. The government wants to make it easier to haul food and fuel across the country. But there is concern about how the highways will be funded. Analysts have said that the funding burden will strain Indonesia’s banking system and the balance sheets of local construction companies. More than half the new...

Reading Time: 1 minute

Indonesia To Spend $70 Billion On New Toll Road Network

Indonesia’s President Joko Widodo is planning an unprecedented $70 billion splurge on toll roads to help connect the island archipelago. By 2024, Indonesia’s fee-charging highways will stretch for 5,400 kilometers, almost triple the length of the current network, Danang Parikesit, head of the country’s toll-road regulator, told Bloomberg News.

The government wants to make it easier to haul food and fuel across the country. But there is concern about how the highways will be funded. Analysts have said that the funding burden will strain Indonesia’s banking system and the balance sheets of local construction companies.

More than half the new toll roads will be rolled out on Sumatra to connect the two ends of the large island. In addition to the highways, the regulator is also studying the possibility of building a bridge from peninsular Malaysia to Sumatra, and a bridge connecting Singapore to Bintan island, Parikesit said.

The government cannot foot the whole bill itself and is seeking other sources of capital such as bank loans and private funding, he added.

The roads rollout is central to the government’s ambitious plans for more than $400 billion of building projects to modernise Indonesia under Widodo when he begins his second term in October.

The extensive sprawl of Indonesia, a nation dispersed across 17,000 islands, is a logistical nightmare and can send the cost of everyday items soaring and hampering development in tough-to-access locations. So the only way to generate faster economic growth is through connectivity, Indonesia’s development planning minister Bambang Brodjonegoro noted.

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