Capital market expected to fund toll road development

Capital market expected to fund toll road development

Public Works and Housing Minister Basuki Hadimuljono. ANTARA/HO/Kementerian PUPR

I hope the participation of the business community, especially investors and financial institutions, capital markets, and analysts at securities companies, will continue in providing connectivity services to the people
Jakarta (ANTARA) - The capital market, as one of the funding mechanisms, is expected to continue financing the development of the toll road infrastructure in many regions in Indonesia, Public Works and Housing Minister Basuki Hadimuljono has stated.

"I hope the participation of the business community, especially investors and financial institutions, capital markets, and analysts at securities companies, will continue in providing connectivity services to the people," Hadimuljono said in a statement Tuesday.

The Public Works and Housing Ministry continuously works to improve the investment climate in the road sector by providing easy investment services and simplifying the regulations.

This is one of the infrastructure development projects that need to be continuously funded as it is the backbone of inter-regional connectivity and the efficiency of logistics costs in Indonesia, Hadimuljono said.

Based on data from the ministry, by the end of 2019, the length of the road to operate is targeted at around 1,500 kilometers (km) or exceeding the 2015-2019 National Medium-Term Development Plan (RPJMN) target of 1,000km.

By the second quarter of 2020, with challenges in land acquisition, the ministry estimates that the completed toll road will increase to 1,852km.

Construction in the next five years will continue with a target of around 2,500km with an estimated investment of Rp250-375 trillion. The government will use various financing mechanisms, from investment in business entities to public-private partnership (PPP).

"The capital market is expected to play its role as a source of long-term financing in toll road investment," Hadimuljono pointed out.

Keeping in mind the large investment needs, the minister has invited the Indonesian Issuers Association (AEI) and securities companies to contribute with the support of innovative financing options to meet the capital needs of investors.

Previously, the Indonesia Stock Exchange (IDX) had assessed that entrepreneurs' understanding of the capital market as alternative funding other than banking was still relatively low.

"There is a capital market as a long-term funding, entrepreneurs can raise funds other than conventional sources," IDX's Director of Information Technology and Risk Management Fithri Hadi had said after the workshop on "Road to Go Public" in Jakarta, Wednesday, September 11. (INE)
Related news: Ministry to call for tenders for seven toll road sections
Related news: PT PP bags tender to construct Semarang-Demak toll road


EDITED BY INE

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