JAKARTA: State infrastructure financing firm PT Sarana Multi Infrastruktur (SMI) has agreed to disburse Rp 481 billion (US$34.9 million) of loans for publicly listed construction firm PT Hutama Karya to help finance part of the ongoing Trans-Sumatra toll road project.
The loans, which will mature in 25 years, will be used mostly to finance the speeding up of construction of the Medan-Binjai segment, the first stretch of the 2,700-kilometer toll road that will connect major cities from the northern to the southern parts of Sumatra.
The initial cost of the 16.6 kilometer Medan-Binjai segment was estimated at Rp 1.6 trillion. The segment is divided into three separate sections, which are Tanjung Mulia-Helvetia, Helvetia-Semayang and Semayang-Binjai.
Explaining the decision to finance part of the project, SMI president director Emma Sri Martini said that it holds a very strategic potential for the economic development of Sumatra, especially in the Binjai, North Sumatra area.
“The completion of the highway will deliver a multiplying economic effect advantageous to the Medan-Binjai area, especially for Binjai’s industrial area in its North and the agricultural area in its South,” Emma said at the signing event of the memorandum of understanding (MoU) on the financing commitment between the two state firms in Jakarta on Thursday.
SMI will use a portion of its Rp 3.6 trillion state capital injection (PMN) from the Finance Ministry to disburse funding to the project, contributing Rp 1.1 trillion.
The Medan-Binjai segment is considered as a “green field” project and SMI is the sole creditor of the construction.
“The rest of the capital injection will be used to finance the construction of the Trans Sumatra highway’s other segments, including the Palembang-Indralaya and Tribanggi-Lampung routes,” Emma added.
Hutama Karya president director I Gusti Ngurah Putra elaborated that the Medan-Binjai segment is targeted to be completed by 2017, having begun in late last year.
“Construction has already commenced and other factors such as land clearing, soil hardening and the installation of the highway’s pillars are already underway. If land clearing efforts go well, we might be able to wrap it up in one-and-a-half years,” Putra said on Thursday.
Putra said that he hopes most of the highway would be completed in time for the Asian Games in 2018, when the South Sumatra city of Palembang will be one of the venues.
For the Palembang-Indralaya segment, he said that about 98 percent of land clearing efforts have already been completed.
Hutama Karya was assigned to construct the Trans-Sumatra highway project following a Presidential Decree (Prepres) in 2014. They will be in charge of constructing the Medan-Binjai, Palembang-Indralaya, Pekanbaru-Dumai and Tribanggi-Lampung segments of the project.
Finance Minister Bambang Brodjonegoro was also present at the signing of the MoU, along with several other executives from the Finance Ministry and the State Owned Enterprises ministry.
