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China Communications Construction unit to invest $1.65 billion in Indonesian toll road

China Communications Construction unit to invest $1.65 billion in Indonesian toll road

JAKARTA (Reuters) - China Communications Construction Co’s (601800.SS) Indonesian subsidiary will buy a stake in a company which won a contract to build a 170-km (106 miles) toll road in the southeast Asian country.

PT China Communications Construction Indonesia (CCCI) will pay 23.3 trillion rupiah ($1.65 billion) for a stake in PT Jasamarga Probolinggo Banyuwangi, a unit of Indonesian state-owned toll road operator Jasa Marga (JSMR.JK), Bambang Brodjonegoro, Indonesia’s planning minister said.

The Jasa Marga unit will build a toll road connecting the city of Probolinggo to Banyuwangi in the eastern side of the main Java island, Brodjonegoro’s presentation showed.

Jasa Marga, which currently controls 94% of the subsidiary, will aim to maintain at least a 51% stake in its unit, its director Adrian Priohutomo said, though he did not disclose how much capital the state firm would have to provide to maintain that level.

“When CCCI enters, we will maintain our majority, to what percent will depend on the result of the due diligence,” he said.

Priohutomo said the company is currently holding a tender for the construction of the first 30 km, aiming to break ground next year.

Minister Brodjonegoro also witnessed customised supply chain financing agreements between ICDX Logistik Berikat, a subsidiary of Indonesia’s commodity exchange, with state construction firm Wijaya Karya and Jasa Sarana, a construction company owned by the West Java government, worth a total of 6 trillion rupiah.

The planning ministry has been arranging infrastructure financing deals to reduce the state’s funding burden.

Source: Reporting by Tabita Diela, editing by Louise Heavens; Writing by Gayatri Suroyo
https://www.reuters.com/article/us-indonesia-china-communications/china-communications-construction-unit-to-invest-1-65-billion-in-indonesian-toll-road-idUSKBN1WT1I5
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JAKARTA (Reuters) - China Communications Construction Co’s (601800.SS) Indonesian subsidiary will buy a stake in a company which won a contract to build a 170-km (106 miles) toll road in the southeast Asian country.

PT China Communications Construction Indonesia (CCCI) will pay 23.3 trillion rupiah (.65 billion) for a stake in PT Jasamarga Probolinggo Banyuwangi, a unit of Indonesian state-owned toll road operator Jasa Marga (JSMR.JK), Bambang Brodjonegoro, Indonesia’s planning minister said.

The Jasa Marga unit will build a toll road connecting the city of Probolinggo to Banyuwangi in the eastern side of the main Java island, Brodjonegoro’s presentation showed.

Jasa Marga, which currently controls 94% of the subsidiary, will aim to maintain at least a 51% stake in its unit, its director Adrian Priohutomo said, though he did not disclose how much capital the state firm would have to provide to maintain that level.

“When CCCI enters, we will maintain our majority, to what percent will depend on the result of the due diligence,” he said.

Priohutomo said the company is currently holding a tender for the construction of the first 30 km, aiming to break ground next year.

Minister Brodjonegoro also witnessed customised supply chain financing agreements between ICDX Logistik Berikat, a subsidiary of Indonesia’s commodity exchange, with state construction firm Wijaya Karya and Jasa Sarana, a construction company owned by the West Java government, worth a total of 6 trillion rupiah.

The planning ministry has been arranging infrastructure financing deals to reduce the state’s funding burden.

Source: Reporting by Tabita Diela, editing by Louise Heavens; Writing by Gayatri Suroyo
https://www.reuters.com/article/us-indonesia-china-communications/china-communications-construction-unit-to-invest-1-65-billion-in-indonesian-toll-road-idUSKBN1WT1I5
Joint Project MakassarParepare Railway Guarantor Signed Soon
Joint Project: Makassar-Parepare Railway Guarantor Signed Soon
JAKARTA - PT Penjaminan Infrastruktur Indonesia has scheduled the signing of the Makassar-Parepare railroad cooperation project guarantee in the third week of December 2018. The project is said to be going to create a number of new records in cooperation projects with business entities (PPP). PII President Director Armand Hermawan said that the stages of the Makassar-Parepare railroad project from exploring market interest to signing the PPP agreement were completed within 9 months. He added that the relatively fast process for a collaborative project dismissed the notion that preparation of the process requires a long time.

"So, if you say that PPP is long, it's just an illusion. Besides being the fastest, this project is also the first PPP project in the Ministry of Transportation. Another record, Sulawesi can [train] infrastructure," Armand told Bisnis last week.

The Makassar-Parepare railroad stretches 144 kilometers. In the cooperation project, the business entity is offered to build a line in segment F along 13.90 kilometers. In addition, the scope of cooperation also covers the operation and maintenance of three segments along 107.10 kilometers. The value of the Makassar-Parepare railroad contract is estimated to reach Rp1.50 trillion. This 20-year collaboration will use an investment return scheme in the form of service availability or availability payment (AP).

Armand said that PII would guarantee if the government was late paying its obligations to business entities. Project termination is also an aspect of the risk borne by PII. To date, as many as six consortia have been declared to have passed the prequalification stage. Merwka is PT Len Industri; Kyeryong Construction-Korea Railroad Corporation-KRNA; PTPP-BK-CCCEI-IM; China Harbor Indonesia; PT Waskita-PT Waskita Toll Road; and PT Wijaya Karya Tbk.-IMS. The number of participants who passed the prequalification in the Business record is less than the number of interested people in assessing market interest in March 2018. At that time, as many as 24 companies expressed their interest in participating in the Makasssar-Parepare railroad cooperation project. (Rivki Maulana)

Source : Rivki Maulana (2018), https://sumatra.bisnis.com/read/20181127/437/863383/proyek-kerja-sama-penjaminan-ka-makassar-parepare-segera-diteken
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