Overcoming The Financial Deficit of Toll Road Construction Projects with Sovereign Wealth Fund (SWF)
Sunday, 07/02/2021
Toll road construction projects in Indonesia generally use funding from the State Budget (APBN). However, in some cases the budget set was not in accordance with the realization plan and caused a financial deficit. For this reason, toll road construction project organizers are required to obtain other alternative sources of funding to overcome the project’s financial deficit.
As quoted from Kompas.com, the Director of CSID, Mohammed Ali Berawi, responded to the problem of the toll road development project’s financial deficit by proposing that the Sovereign Wealth Fund (SWF) be used as alternative financing, so that the toll road construction project could be separated from dependence on the state budget. However, because SWF is an investment fund, the consequence is that the construction of this JTTS must also generate profits for investors. The cooperation scheme that is implemented is a business-to-business joint venture scheme.
In his further explanation, Ali Berawi said that the development of JTTS should be a unit filled with multi-sectors and not stand alone. The development of JTTS also includes the surrounding sectors such as industrial estates, business, tourism, ports and other public facilities. Therefore, it is necessary to have inter-ministerial cooperation such as the Ministry of PUPR, Ministry of Trade, Ministry of Industry, Ministry of Agriculture, and even the Head of the local area. The cooperation is aimed at assessing the potential for investment, even sharing costs in development.
The hope of developing JTTS using this cooperation scheme is that investors view the toll road construction project as a large multisectoral opportunity because it can connect various strategic business, tourism and industrial locations.