Trans Java Highway
Sep 22nd, 2007, in Business & Economy, by PatungThe Trans Java toll road is probably going to be built shortly.
A highway linking Jakarta in the west of Java and Surabaya in the east is hoped to be completed by 2009, says Gembong Priyono, a staffer for vice-president Jusuf Kalla, starting at Tanjung Priok port in Jakarta and ending at Tanjung Perak port in Surabaya, taking the northern coastal route via Cirebon and Semarang.
Existing toll roads linking towns such as Cikampek to Purwakarta to Padalarang, among others, will be employed, with a further 643 km’s of highway still needing to be built, total 1100 km’s.
For 2007 600 billion rupiah has been set aside in the budget for acquisition of land, and in 2008 two trillion rupiah. An independent committee has been established to determine what prices will be paid for land, and Gembong optimistically hopes there will not be resistance from affected people. antara
Currently the hair-raising trip between Jakarta and Surabaya involves much battling with lunatic truck and bus drivers, dreamy motorcyclists, elderly pedicab drivers, carts pulled by bulls, semi or fully naked vagrants walking along the road, and takes at least 14 hours, while the toll road is expected to cut this time by about half, and reduce some of the distractions.
It is hoped the new road will spur on economic growth, with Toll Road Regulatory Board (BPJT) research carried out by the Danareksa Research Institute in 2004 estimating that for every 100 kilometers of toll road GDP increased by 0.2% and 69,000 new jobs were created. Based on these figures a completed Trans Java highway would increase GDP by 2.2% and create 759,000 new jobs.
8 Comments on “Trans Java Highway”
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Sputjam says:
If fundamentals in indonesia is good, foreign funds will come in. Without a highway, jakarta will become a jam packed metropolis with no room to grow. All the wealth and industries will be stuck in jakarta, contributing to even more jams and inefficient transport system.
If you have a highway, industries can expand outwards towards the rural areas, creating jobs for the kampung folks and spreading wealth.
For a country of 200 million, indonesia has only one metropolis, i.e. jakarta, whereas china has several, or even Malaysia has three – KL, Penang and JB. Reason? These countries are well connected by good roads. from KL, you can drive to singapore/Penang within 3.5 hours within speed limits (110km/hr) or even faster if you want with a risk of a speeding fine.
China is an example of huge amounts being spent on on infastructure such as highways, rail and ports.
Building highway creates jobs in the construction industry, consumes locally made cement and steel bars, and increase businesses for quarries extracting stones and sand.
Rural folks can also expect an increase in holiday traffic to such places as jogjakarta, nice beaches in south Java (which have been neglected for too long), etc.
In other words, the highway should not stop in surabaya, but should be extended like a tentacles from jakarta heading east, west and south, southeast/southwest etc.
Similary from surabaya. After all, there is 100 million people on the island of java. The highway is long overdue. Otherwise, jakarta will suffocate. -
Dragonwall says:
Indonesia has, if you do not consider places like Surabay, Medan as metropolis then they are district? Being the second and third largest cities!
A metropolis has all the facilities that were already there and in Medan and Surabaya all such facilities are there.
Could I be wrong to say that you are a lecturer and not business or enterprenuer?
It is the problem that these governors are not doing anything to expand the metro.
By having a road or toll open up it is like opening up a new road from a beach to the town, let say like in Pattaya.
If you see Shah Alam, Selangor and KL they are linked because the metro had grown beyong their reach that they need those.
Not like what the short VP said giving reasons like, bull cart, vagrant on the road and lunatic truck drivers to build a toll.
If you cannot in anyway overcome the economy, then you can’t have the road. If you have the road and not the economy then it will be like a white elephant sitting at the expense of the people.
Understand as one wants to be that it will create jobs, but from the countryside folks? Do you think those contractors will want that? How efficient will that be then.
The contractor will want their own supplier that will get things done on time and not those people. Perhaps labor. That is the only need.So if talking of creating jobs, this is something to think about. Saying is easy but implementation is difficult.
The amount of money spent will not justify the urgent need of the national economy. Last week’s exchange rate was somewhere around 9400-9500 and this week it droped over the weekend. We will see in the next few weeks what will happen. It it comes back to around 9400-9500 again then the strategy BI had adopted like many big time economist had predicted didn’t work at all. In other words those money spent were like filling up a bottomless hole.
It had for many occasion yo yo around these figures so nothing is helping at all. By incurring more money into such development right now will definitely not help Indonesia recover from their economy crisis.
And for people to make predictions over a period of 25 to 30 years is like blowing bubbles waiting for it to burst.Believe it or not it has been going on for such a long time and there will be never ending problem. When they build the Merak toll and Bandung toll it was also said in the same manner but what hapenned then?
Had it solve the economic problem. Nothing at all.
When a country is prospering and developing at a steady pace. I agree with you 200%. But with current condition I won’t agree with 1%.
In China it is developing at a steady pace and ever growing. So they just make sure every provinve, county follow suit and they expand at the same time in right momentum with the national economy thus pushing the GDP to greater heights.
Malaysia was the same.Indonesia is unlike any of those.
Before the 96 economic crunch and the 98 riot everyone could see the need. But it was that unfortunate that it had to happen that way because of some egoistic MF**k**g political elite and over zealous clerics that cause the country to went into turnoil sending it spiralling downward.
It is going to be a tough job. Hyper inflation, cost of living, same income, less export more import, consumer spending cut and all the list…
I wonder.
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In the 1930’s US suffered a catastrophic recession after the bubble burst at the NYSE. being capitalistic, the government did not wish to intervene and was hoping for some miracle from the business community. This recessionary period went on for several years and still nothing seems to be able to kick start the economy.
That is until Milton Keynes came up with a theory that during recession, the government will have to borrow in order to pump money into the economy. And borrow the US government did. They borrowed money to build dams and bridges, some of it you can see still standing today, including the golden gate bridge, the hoover dam etc. and highways all over the country.
Indonesia is not in recession. Only trouble with Indonesia is its unstable currency. I suggest the Indonesian government peg the currency to the singapore dollars, since so much of its wealth is in singapore. Brunei has similar peg and Brunei dollar is at par with S$.
For a highway to succeed, it must be connected between major cities. If a highway ends in the middle of nowhere, then it will not be 100 percent utilised. Connecting jakarta to surabaya is good as there are several major town within the vicinity that can utilise the highway. Cost of good being transported will reduce as for small shipments, trucks are more cost effective than containers in ships. Trade between surabaya and Jakarta (and all the towns in between) will also increase. Trust me, economy activities increases after a highway is built. This includes trade, tourism, and many more.
Jakarta is a huge metropolis. Surabaya is probably 1/10th its size. Medan is much smaller. Similarly in Thailand where bangkok’s size dwarfs all the other towns in the country. What this tells us is that Thailand and Indonesia has a central power base and that every minor decision, even if it is for the province far away, is made in the capital city. Because of this, the province ability to grow is dented as permission to seek for development normally is delayed and sometimes never got off the ground. Give the province more autonomy, as was done recently, and growth should start to reach the province the the people in those districts more speedily.
And no, I am no lecturer, just a normal biz guy like many in the region.
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In the 1930’s US suffered a catastrophic recession after the bubble burst at the NYSE. being capitalistic, the government did not wish to intervene and was hoping for some miracle from the business community.
JP Morgan, Rothschild and Rockyfeller were the main culprit of their own economic recession. They shorted so much on the futures market to cause the index to fall si badly that sent most companies to go into insolvency and most penniless while they quietly pull themselves out to safety.
Then followed by the american government who had recall all gold hoarding and abolish the gold standard.
Brunei has similar peg and Brunei dollar is at par with S$.
I don’t think the Brunei had a peg with Singapore currency but they somewhat adopt a similar stance with Singapore and treat their currency as an equivalent value.
Even if Indonesia is not in a recession like you said. The condition is no less than a recession.
The rupiahs had not stabilize and at this moment if it does it is not going to be for long.
Rusia is making a move to come into Indonesia. We will see what happen. The political view is that they want to make their presence felt in the east. And besides that will they be bring in the money all in one go? Their presence will eventually cause a certain tension in term of stability.
In seeing the economy as a whole we have to weigh the pros and cons.
I still find that the funds if use for such development in the next 5 years will not help the Indonesian economy. If Indonesia tightened their economy right now then after the 5 years cooling period to proceed with such development would be more ideal.
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If the government do not spend any money on infrastructure development, there will be no trickling down effect to the population, no work for the construction worker, no cement for the industries to sell to, no engineering work for the engineers etc.
Constructing a highway is a job which can be done by indonesian. The chances of the money spent on the highway, eventually will be paid to indonesians.
Building the highway is not something like building the twin towers in KL. The twin towers was designed by american, with british/american engineering consultants, Korean construction company for tower two and japanese for tower one, mainly foreign workers to build the towers. Only job done by Malaysian were the subcontracting job in piping/electricity/aircon ducts, interior etc. In other words, there was very little trickling down effect to malaysian economy.
If indonesian government were to suggest building similar project like the twin tower, I would oppose fiercely.
But i would support building the highway as the effect on the economy will be positive from contruction until well after it has been completed.The main problem with indonesia is the volatile currency. Pegging the currency to the US is useless as its situation differs vastly from the ones facing indonesia. Pegging the rupiah to the Singapore dollar may be a better choice as singapore economy is very dependent on indonesian economy.(SIA, Singapore ports, high end properties, education, medical, oil and gas, sand, natural gas supply and many more)
You are correct in that brunei dollars and singapore dollar are treated as equal under a treaty. How the mechanism works is beyond my knowledge. But pegging works in similar manner.when the currency is volatile, Indonesia will not be able to attract quality long term investors. Only short term speculators will profit from such a situation.
Russia moving into indonesia is a positive sign. Most likely, they will invest in the oil and gas sector, which oil giants like exxon-mobil are having problems dealing with pertamina. To retain and provide more opportunities for indonesian, Pertamina should insist that all offshore equipment such as offshore marine vessels and oil rigs should be build in Indonesia. Only then can the trickling effect of oil and gas can flow to the masses by means of providing jobs and contracts for indonesian companies and workers.
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dykarg says:
Highway construction will accelerate land purpose conversion, and I can only imagine some more square kilometers of paddy field will dissappear on north java.
Beside that, more and more traffics will require more (imported) vehichles and of course more fuels. If oil price increases and goverment maintains the price by fuel subsidy, this highway can fires back.
I feel hopeless about our PT KAI today, but I think railway will be better solution. -
Railway has limited exposure. Railway was invented before the invention of automobiles. hence in european states, china and india, railway networks was well developed before the contruction of higways.
Refined oil products should not be subsidised especially for petrol and diesel as the users are well off industrial users or owners of automobiles. The governemnts subsidy of kerosene is actually assisting smugglers sell the kerosene to singapore, where the fuel are actually mixed with diesel to produce a higher quality diesel and sold for a higher price to shipowners and buyers of industrial fuel. These smugglers made huge margins on the trade. hence it is not surprising to note that kerosene is probably in shortage in rural areas where it was intended to help the poor. I think that was the reason why the government is trying to introduce lpg for cooking to replace kerosene, as subsidised lpg is more difficult to smuggle out.
Assuming the prices of petrol shoots up, there will always be an alternate fuel to power the vehicles. There is no alternative to motor vehicles as it is convenient form of transportation. I think Parvita mentioned compressed air (good for short trips), hydrogen (still expensive to manufacture) or even a new invention using salt water immersed in some chemicals, in which the salt water burned up to 1600deg C after a small input of energy.
A full fledge railway network is more expensive to develope by the government. not only do they have to build the railway, they also have to build stations and purchase locomotive and coaches for cargo and passengers.
All newly developed countries shunned railway due to cost efficiency. That includes australia, USA and ASEAN. raill networks only works in a heavily populated areas where car ownership is impossible due to space limitations, such as singapore’s MRT/hong kong.
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This is bad news for Indonesia. Don’t be too happy about this.
Did anyone care to take a look at the condition of the Merak toll! How was the recovery? The last time I travelled that stretch it was just pot holes everywhere, considering that they were ‘cor’ and not asphalt. It is clearly shown that a large part of the fund allocated for the construction of the toll road went into private gain.
So with due respect are these figures realistic? The GDP sounded quite attractive on this project, but are the figures expended for meant for the project as a whole, or how many % will go to the short VP and his crony’s pocket. the job creation of 69,000 and increased to 759,000! How realistic is that and for how long will they maintain it?
Like I mention earlier, this is a bad time for Indonesia to put in that much money into such a development meant only to cater for this!!!!!!
My goodness I would not spend any money just for that purpose.
All those money could be put into better use in other sector of development. This may be considered an infrastructure but it does not help the national economy as a whole. At this moment especially when Indonesia is facing an uphill task of restructuring her economy, the money should be put into better use like attracting more investors when they are beginning to run away. This way of accounting for GDP and employment becomes more realistic.
One can argue that without this infrastructure investors might not come in. This should not be the problem. Most investors are export orientated. Access to such areas are already covered and this toll will not help them because shipping port are made available so the land transportation are limited to few only. Very few investors are prepared to manufacture their products for local sale. Big companies like brand names sold worldwide intertwine their country of manufacture and target market. For example Made in China Nike sold in Indonesia. made in Indonesia’s Nike are sold in other countries. Same thing for electronics, computers etc.
When a project is being proposed it is made to look attractive and it is as though they are serving the community but in actual fact they are not. It will come a time when it become a liability more than an asset.
When the Soedyatmo Toll or the toll leading to Soekarno Hatta Intenational Airport it was reputed to be one that is supposed to be floating base on the techniques of ‘Cakra Ayam’. It is sinking right? Any remedy for that? NO.. Why the foundation was not made good and solid enough and the land study was not properly done to facilitate such foundations.
In Singapore there was this Asia Insurance Building. That piece of land was built long ago and it was near the the shore. When piling started, it seemed bottomless and all pilings sent down seemed unable to find a base. After careful study a different technique was used for the building. It is made to float in a different way comparing to the ‘Cakra Ayam’. After it was applied the building was successfully build. It is reported to be one of the building in Singapore that can withstand earthquake. And many buildings in Singapore follow suit.
It took Singapore many years for land to settle for those lands reclaimed from the sea. A sea corrosion study was sent to India for study before it can be used. That is a lot of money for a government to spend on infrastructure. This is infrastructure. One must be prepared to learn from others to succeed and not being jealous of their success. Before implementing such i urge the Indonesian government to consider the economic crisis as their top priority and not just to spend those money where the usage are subject to limitation.
Sputjam suggested, but I was not prepared to go into detail at that time. Perhaps he did not foresee the economy as a priority but was more concentrated on the infra as a way to attract foreign investors.
I did mention that an exodus will take place both in terms of investment, capital flights and human and they are slowly moving in that direction and will be like a river of no return. So what will the use of such a massive expenditures on a white elephant sitting there and become a liability to the people.