Posted by: mel | May 27, 2009

Govt seeks investors to manage RI’s longest bridge

Jakarta Post |Aditya Suharmoko |  Jakarta   |  Tue, 05/26/2009 |  Business

The chance to manage Indonesia’s longest bridge, Suramadu, will be open to bids from local and foreign investors 18 months after it opens, a ministry official says, after temporary management  by the regulatory body.

“This is the first toll bridge constructed by the government. Once completed  it will be handed over to the private sector. There will be a tender process for that,” Bambang Susantono, the deputy minister of infrastructure for the Coordinating Minister for the Economy said Monday.

The Indonesian Toll Road Regulator (BPJT) will temporarily manage the bridge for the first 18 months of operation after opening, to provide time to seek investors ready to take it on as an up-and-running business, said Bambang.

Should there be no unexpected  hitches, the bridge is expected to start operating on June 10.

The bridge, which will link East Java’s capital Surabaya with the nearby economic backwater of Madura island, is nearing completion, with more than 98 percent of construction tasks completed.

Constructed jointly by Indonesian and Chinese contractors, the bridge, which spans 5.4 kilometers, has cost the country Rp 4.5 trillion (US$440.57 million).

Most of the materials, including the steel used for the bridge have been imported from China.
Under a contract signed on Sept. 24, China would finance some parts of  the costs. The work of the bridge construction began in October 2005.

At least 3,500 workers from Indonesia and China have been involved in the development of the bridge, which used 28,000 tons of pure steel and 600,000 tons of mixed steel.

Bambang said there would be an agency that would cooperate with  the BPJT to conduct the tender process for the new operators.

He said foreign companies were welcome to join the bidding. He could not mention the exact date for the process.  

The government has allocated 18 months for the BPJT and the new agency to put out to tender the management of  the Suramadu bridge as the government wants to attract the investors that can provide the most “benefits”.

“Anyone can come in. The [18-month] time-scale is set taking into account the best practices so that this should  [facilitate] the tender process,” he said.

The bridge, which is planned to help bring increased development and greater prosperity to Madura, will have two lanes in each direction, in addition to an emergency lane and a dedicated lane for motorcycles.

The three-cable-style bridge was launched by then president Megawati Soekarnoputri in August 2003 with a completion schedule  planned for  2006. But in July 2004, a girder collapsed, in which one worker was killed and nine others injured.

The bridge construction was halted at the end of 2004 due to lack of funds, but eventually was restarted in November 2005.

The government expects the bridge to help accelerate the socio-economic development of Madura island as it will provide easy access between the island and Surabaya, Indonesia’s second largest city.

In order to boost the island’s economy, the East Java administration has planned to make Madura island the country’s cattle center once the bridge is operational.

The government plans to set up special economic zones (SEZ) in the areas to be linked by the Suramadu bridge, with these economic zones expected to cover some 600 hectares in total.

Infrastucture construction is among the government’s highest priorities as Finance Minister Sri Mulyani Indrawati pointed out that the lack of modern and efficient infrastructure would be the major  obstacle both to economic growth and to poverty reduction, with the new bridge helping to deal with both.

Indonesia needs Rp 1,429 trillion for the construction of infrastructure projects between 2010 and 2014 to help the country achieve an economic growth rate of about 5 percent annually, according to State Minister for National Development Planning Paskah Suzetta.

The government has established state-sanctioned infrastructure firm PT Sarana Multi Infrastruktur (SMI) to be a catalyst to encourage infrastructure financing.

With SMI making the first moves in financing certain infrastructure projects, the private sector is expected to come up with more accurate calculations on the value of projects, with a view to future takeover of projects from the government.

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