Trans Sumatera: Connecting the Future of Indonesian in the West

Trans Sumatera: Connecting the Future of Indonesian in the West

Sumatera Development would become growth accelerator that in line with Acceleration of MP3EI Spirit Through MP3EI, will put Indonesia as developed country the end of 2025 with condition: Income per capita: USD 14.250-USD 15.500 Source: MP3EI GDP: Economic growth is necessary: The decline of inflation: USD 4.0-4,5 Triliun 6,4%-7,5% in 2011-2014 & 8%-9% in 2015-2025 6,5% in 2011-2014 become 3% tahun 2025 Region Sharing for GDP The Important of Sumatera s Economic as growth accelerator In order acceleration of economic growth and distribution of infrastructure building, Sumatera has highest GDP after Java, potentially to be developed faster, in which expected as National Economic gate to market of Europe, Africa, South Asia, East Asia and Australia. 70% 60% 50% 40% 30% 20% 10% 0% 2007 2012 Source : BPS

Sumatera has experienced continuous economic growth and its potential is even higher, yet growth has been hampered by poor connectivity Sumatera s economy has grown rapidly 23.8 % of Indonesia s GDP is generated in Sumatra Average GRDP growth is 5% per year (BPS, 2008-2011) Production and processing center of natural resources and The National Energy Reserves And its potential is even greater Committed future investments in Sei Mengkei Special Economic Zone are: IDR 3.74 Trillion in downstream palm oil sector IDR 2.45 Trillion in oleochemical industry IDR 537 Billion in fertilizer plants There are large investment opportunities in palm oil and coal downstream industry Capital of Province/Economic Center Rubber plantation area Palm Oil Plantation area Industry Cluster Coal Mining area Domestic Cruise Network Rail way Connecting line of Economic Center Main Line to Exit Corridor Existing Line Port But until now hampered by poor connectivity Waiting times at 4 key ports in Sumatra is 3-4 days, resulting in significant cost increases for exporters. Shipment cost by land transportation to Medan, North Sumatera reaches IDR 10 million/tue (double the cost of container shipment from Tanjung Priok to Belawan Port in Medan) Source: Masterplan for Acceleration and Expansion of Indonesia Economic Development 2011-2025

Bengkulu Trans Sumatera Toll Road Consist of Main Corridor (1.813 km) and Supporting Corridor (795 km), 23 Segments Totally (2.608 km) Lubuk Linggau 95 Padang Sibolga 55 125 Muara Enim Bukit Tinggi 185 200 22 88 Indralaya 75 135 135 110 17 60 100 175 126 175 190 191 85 100 139 Banda Aceh Sigli Lhokseumawe Langsa Binjai Medan Tebing Tinggi Kisaran Rantau Prapat Dumai Pekanbaru Rengat Jambi Betung Palembang Kayu Agung Pematang panggang Terbanggi Besar Bakauheni Koridor Utama Koridor Pendukung

Trans Sumatera Toll Road is Necessary, It Can t Be Delayed... Length of Indonesia s Toll Road during 35 years (1978-2013) is 742 km. Competitiveness Index quality of road infrastructure in Indonesia ranked 90 out of 146 countries. Logistic Performance Index ranked 59 out of 155 countries. Quality improvement of highway infrastructure is needed to enhance the infrastructure competitiveness on free trade era. Construction of Trans Sumatra Highway, 2,608 km length, is an integrated part of other infrastructure development programs. Some toll roads have been tendered in 2005-2008, but did not get investors. In an effort to accelerate of infrastructure development, the government uses its authority to conduct toll road development, through assignment to State Own Enterprise (BUMN) that are wholly owned by the state....from the indicator, development of Trans Sumatera Toll Road can t become discussion agenda only, it has to developed as soon as possible. The solution is needed to ensure Trans Sumatera project is developed according to the MP3EI target...

Toll Road Development Scheme BOT SBOT/HYBRID O&M/LEASE Private Gov Private Gov Private Gov Assigntment* SOE Land Acquisition Construction O & M EIRR >>> FIRR >>> EIRR >>> FIRR Marginal EIRR >>> FIRR <<< EIRR >>> FIRR <<< Private : Toll Road Company Gov : Government SOE : State Own Enterprise *) PP 43 /2013

Illustration of Similar Context Where a Separate Government Entity Model Have Been Preferred and Successfully Applied

Financial Feasibility (FIRR) of Trans Sumatera Still Low Condition: IRR average is below 10% while IDR commercial interest rate is above 10% Projection of investment cost is IDR 307 trillion Source : PU-BPJT, Presentasi di BKF bulan Februari 2013

Development Phase of Trans Sumatera Toll Road, And Become a Road Network in Sumatera Banda Aceh Batam Batu Ampar Hang Nadim Binjai Sibolga Phase 1 (2014-2018) Medan Padang Indralaya Bengkulu Dumai Pekan Baru Economically: Land is free relatively Economic center Have been tendered but not successfull PHASE 1 PHASE 2 PHASE 3 Jambi Palembang Kayu Agung Bandar Lampung Terbanggi Bakauheni besar Financally: Is the best segments traffically, so that potential for sales the consession for spesific period; Sales result from phase 1 can be used for next phase No Land Acquisition KM 2014 2015 2016 2017 2018 1 Stage I 304 29 177 98 2 Next Stage 2.304 484 668 1.152 Comulative 2.608 29 206 788 1.456 2.608 No Segment KM 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 1 Bakauheni-Terbanggi Besar 2 Medan-Binjai 3 Pekanbaru-Dumai Phase 2 (2016-2020) Economically: Connecting the economic central of phase 1 Financially: After phase 1 is developed, traffic phase 2 corridor will be generated because of economic centers connectivity. Tahap 3 (2019-2025) 139 24 62 53 17 17 126 4 Palembang-Indralaya 22 5 Terbanggi Besar-Pematang Panggang 100 6 Pematang Panggang-Kayu Agung 7 Dumai-Sp. Sigambal-Rantau Prapat 175 8 Rantau Prapat-Kisaran 100 9 Kisaran-Tebing Tinggi 10 Batu Ampar-Bandara Hang Nadim 25 11 Betung-Jambi 191 12 Jambi-Rengat 85 60 190 13 Rengat-Pekanbaru 175 14 Pekanbaru-Bukit Tinggi 185 15 Bukit Tinggi-Padang 55 16 Tebing Tinggi-Sibolga 200 17 Indralaya-Muara Enim 88 18 Muara Enim-Lahat-Lubuk Linggau 125 19 Lubuk Linggau-Curup-Bengkulu 95 20 Sigli-Banda Aceh 75 21 Binjai-Langsa 110 22 Langsa-Lhokseumawe 135 23 Lhokseumawe-Sigli 135 Operation Lenght of Stage I (km) Operation Lenght of Stage II (km) Operation Lenght of Stage III (km) Total Operation Lenght (km) 35 44 47 15 7 10 10 20 60 15 30 40 6 19-17 91 204 304 15 60 100 15 30 55 20 40 - - - 31 140 330 545 20 45 45 81 20 50 50 70 25 50 100 20 50 50 65 10 45 15 50 50 85 10 25 53 20 30 30 45 10 30 55 15 60 10 40 60 10 50 75 20 50 65 - - - - - - 30 215 530 1.053 1.514 1.759-17 91 235 444 634 879 1.064 1.379 1.902 2.363 2.608 Trans Sumatera toll road as one network

Business Scheme of Trans Sumatera Toll Road Government Multi Donor Fund State budget Governtment s Loan 1 SLA WB JICA ADB SOE 4 Govnt. Injection SLA 2 Direct lending Local/Foreign Partner Gov. Inj Government guaranteed 3 Corporate bond & direct lending Investor SOE Bank(s) PIP, SMI etc Market Local Parnter Foreign Partner SPV Equity Debt Other SOE SOE Shareholder Loan (SHL) bridging finance 5 Partner Equity Partner Commercial Loan Equity 30% HK 21% Partner 9% Loan 70%

Source Of Fund Simulation: Phase I (4 Segments) Investment Cost (IDR Billion) Govr. Injection 6.481 Equity Partner 2.777 Direct Lending 10.980 Corporate Bond 10.627 Debt Service Coverage Ratio Segment Bakauheni - Terbanggi Besar ADSCR 1,2 Min DSCR 0,2 Ending Cash at the lowest DSCR Rp 11.989 Billion 1,2 0,6 Rp 301 Billion Selling Concesion 7 x EBITDA Pekanbaru Dumai 3,6 0,7 Rp 381 Billion Palembang Indralaya 1,9 0,6 Rp 44 Billion Medan Binjai 2,7-0,4 Rp 8 Billion Total 3,4 0,3 Rp 15.822 Billion

Disburstment Investment Estimate Source of Fund for 23 Segments exclude Land Acquisition Equity : Rp 92,26 trillion (30%) Loan : Rp 215,37 trillion (70%) Total : Rp 307,53 trillion Source of Fund for 4 Segments exclude Land Acquisition Equity : Rp 9,26 trillion (30%) Loan : Rp 21,6 trillion (70%) Total : Rp 30,86 trillion

Financing Trans Sumatera Toll Road Keseluruhan 23 Ruas 4 Ruas Tahap I

Financing of Bakauheni Terbanggi Besar

Financing of Medan Binjai Pinjaman menggunakan direct lending KMK untuk memenuhi kebutuhan operasi setiap awal tahun Cicilan pokok pinjaman dengan tenor 25 tahun & grace period 7 tahun Pengembalian KMK setiap akhir tahun

Financing of Palembang Indralaya

Financing of Pekanbaru Dumai

Succesfullness of Development Scheme depent on sinergy that created by related Stakeholder Stakeholder Partisipation in Trans Sumatera Toll Road Development Indonesian Government SOE as Toll Road Entreprises Toll Road Entreprise or SPV Equity Partner Lender Institution (Bilateral/Multilateral) Financing Institution (Bank, Dana Pensiun, PT SMI, PT IIF) Giver assignment to SOE through Peraturan Presiden Giving Capital injection Support and Guarantee of primary loan and loan interest that obtained by PT.Hutama Karya for investment required Accepting Assignment from Indonesian Government Making Toll Road Development Agreement with Toll Road Institution developing Toll Road directly or join with another enterprises Forwarding Government loan to Toll Road Enterprises of each segments SOE stand alone or joint with another enterprises to created consortium Toll Road Enterprise than it will called Special Purpose Vehicle (SPV) SPV have charge to develop certain Toll road Supporting Trans Sumatera Toll Road development by giving capital support to Toll Road Enterprise or loan with certain requirement and provision. Partner come from State owned Enterprise or Regionally Owned Enterprise or Private Company local and international Giving soft loan (long maturity and low interest) to SOE based on Government guarantee on primary loan and interest loan. Could be Bilateral or multilateral institution or another financing institution such as PIP Absorbing Corporate bond that issued by Toll Road Enterprise to investment required. Giving Capital work loan to operasional required Could be State Owned Bank, Comersial Bank, Pension Fund, PT. SMI, or PT. IIF

Benefits of The Development of Trans Sumatra Highway On The Acceleration For Economic Development Benefits of The Development of Trans Sumatra Highway, such as: 1. Reduce the cost products through cost savings logistics. Nationally, the cost of logistics charge against the product was 14 % ( 24 % of GDB ). In the end of 2025 ( MP3EI) is targeted to the cost of logistics <10 %. Logistic cost of Sumatra between 15 % to 20 % ( source GPEI ). The infrastructure development is expected to reduce the logistics cost of Sumatra <12 % to support the target MP3EI. 2. Refers to the average long-term elasticity of infrastructure development, it will increase the value of GDP between Rp 10 trillion to Rp 15 trillion per year or 0.13% up to 0.19% per year. 3. Increase government revenues as tax revenue 4. Creating job opportunities between 70 thousand to 138 thousand outside labor during the construction period.

PALEMBANG INDRALAYA Betung TAHAPAN KETERANGAN STA JARAK SECTION 1 PALEMBANG PEMULUTAN 0+000 s/d 7+100 7 KM SECTION 2 PEMULUTAN KTM 7+100 s/d 12+000 5 KM SECTION 3 KTM - SP. INDRALAYA 12+000 s/d 21+930 10 KM EXIT 1 PALEMBANG STA 0+000 Jln. Lingkar Selatan Palembang EXIT 2 PEMULUTAN Kayu Agung STA 7+100 Jln. Palembang Indralaya (existing) EXIT 3 KTM STA 12+000 EXIT 4 SP. INDRALAYA Jln Tol K.Agung - Betung Jln Tol Plm - Indralaya STA 21+930 Jln. Lintas Timur

MEDAN BINJAI STA 15+380 Binjai Tj. Mulia Semayang Helvetia STA 10+870 STA 5+920 STA -1+720 Semayang Binjai 4,51 km Helvetia -Semayang 4,95 km Medan - Helvetia 7,64 km Main Road Access Road = 17,1 km = 8,87 km

BAKAUHENI TERBANGGI BESAR 1. Access Sunda s Strait Bridge : 11 km 2. Bakauheni Babatan : 27 km 3. Babatan - Tegineneng : 59 km Seksi III : Tegineneng Terbanggi Besar 4. Tegineneng - Terbanggi Besar : 42 km Seksi II : Babatan - Tegineneng Seksi I : Bakauheni - Babatan Jalan Tol Penghubun g JSS

PEKANBARU DUMAI 9,25 Km 23,95 Km 17 Km 26,3 Km 29,925 Km 25,075 Km Pekanbaru Minas Petapahan Kandis Duri 1 Duri 2 Dumai Rencana Jalan Tol Dumai Sp. Sigambal Rantau Prapat Kandis Sta 50+200 Petapahan Sta 33+200 Duri Utara Sta 106+450 Duri Selatan Sta 76+500 Sta 97+500 Minas Sta 9+250 Duri Utara Sta 25+075 Dumai Sta 0+000 Pekanbaru Sta 0+000 Seksi I : Pekanbaru - Kandis Seksi II : Kandis Duri Utara Seksi III : Duri Utara - Dumai