Riau hits the gas for tollway development

Fadli, The Jakarta Post, Pekanbaru

Riau province is offering incentives for the development of 135 kilometers of turnpike connecting Pekanbaru and Dumai so as to attract more potential investors.

Previously, the provincial government had failed to conclude two deals for the project, which it is estimated will cost around US$528 million, due to a lack of bidders.

Riau Province governor Rusli Zainal told The Jakarta Post on Thursday that the province would provide a total of Rp 150 billion to the tollway developer for land acquisition purposes.

"The land acquisition fund will be provided jointly by Riau Province, Pekanbaru city administration, Siak Regency, and Bengkalis and Dumai as the toll road will provide great benefits to all of these areas," Rusli said.

In addition, the provincial government had promised it would pay a subsidy should the revenue from the project fail to cover construction costs.

"We are confident that with these incentives, more investors will bid for the tollway project," he said.

In addition to a lack of incentives, few investors had expressed interest in the project as there is already a 210-kilometer-long public road connecting Riau and Dumai. Despite not being in prime condition, traffic on the existing road is rarely disrupted.

Following the offer, Riau Province Promotion and Investment chief Tionlina Pangaribuan said that one Chinese investor and one local investor, PT Sari Bangun Persada, had already expressed an interested.

"The Chinese investor is a state company that is active in investing out of China," she said.

The project is among 50 projects that the provincial government put on the table at the Riau Investment Summit, which concluded Thursday.