•    HOME   
•    NEWS   
•    BUSINESS   
•    INTERNATIONAL   
•    TECH   
•    SPORTS   
•    LIFE & TIMES   
•    OPINION   
•    MY JAKARTA   
•    BLOGS   

Agroup of domestic banks announced on Friday that it would lend PT Trans Marga Jateng Rp 4.7 trillion ($498 million) to help finance construction of part of the Trans-Java toll road.

“Toll roads are strategic infrastructure that have a multiplier effect on economic development,” said Gatot Soewondo, president director of PT Bank Negara Indonesia. PT Bank Mandiri, PT Bank Rakyat Indonesia and PT Bank Jateng are also taking part in the loan, which carries 13 percent interest and a 13-year term.

Trans Marga Jateng, a joint venture between state toll road operator PT Jasa Marga and the regional government-owned PT Sarana Pembangunan Jawa Tengah, said the loan would be used to build the 76-kilometer Semarang-Solo toll road, which has a total project value of Rp 6.83 trillion.

Agus Suharyanto, Trans Marga Jateng’s president director, said the toll road would consist of five sections, with construction of the 10.9-km Semarang-Ungaran section already under way.

“For the first section, we estimate construction costs will be Rp 1 trillion,” he said, adding that the stretch should start operating late next year.

“We also hope to begin construction of the section linking Ungaran and Bawen next year,” Agus said.

He said the main obstacle to any toll-road project was land clearance, adding that he hoped the government could speed up the process.

Takeshi Murakami, a senior consultant at Japan’s Nomura Research Institute, said the slow pace of infrastructure development, including roadways, was a major hurdle for Indonesian economic growth.

He said there had been little progress toward the goals laid out during a national infrastructure summit in 2005.

The summit called for 1,700 kilometers of toll roads to be built between 2005 and 2010. However, only 43 kilometers had been built by the end of September, according to Fatchur Rochman, head of the Indonesian Chamber of Commerce and Industry’s toll-road development committee.

Anton Gunawan, an economist at PT Bank Danamon, said inadequate infrastructure was also causing higher inflation because poor highways made goods more expensive to transport.