POLICY DIRECTION AND PPP INVESTMENT OPPORTUNITIES ON TOLL ROAD SECTOR

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POLICY DIRECTION AND PPP INVESTMENT

OPPORTUNITIES ON TOLL ROAD SECTOR

DIRECTORATE GENERAL OF HIGHWAYS MINISTRY OF PUBLIC WORKS

Delivered on

KOREAN-INDONESIA PPP FAIR

10 DECEMBER 2007

A. HERMANTO DARDAK

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PUBLIC WORKS INFRASTRUCTURES

Physical infrastructure is the prerequisite for social and

economic development.

Lack of infrastructure leads to bottlenecks and hinders

economic and social activities.

The Ministry of Public Works is responsible for the

provision of Public Works infrastructure, such as roads,

irrigation, clean water, sanitation and human settlements

infrastructure

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• Total length of Indonesian road network is 347.000 km consist of

among others 34.600 km national roads including 650 km of toll

roads.

Road Infrastructure as Platform for Economic & Social Life

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Newly Developing Region

Developed Region

Developing Region

The development of public works infrastructure in Indonesia adopts the

regional development approach that complies with the principle of

“ i n f r a s t r u c t u r e f o r a l l ” a n d “ s u s t a i n a b l e d e v e l o p m e n t . ”

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Toll Road Development Overview

1. First Toll road operated in 1978, Jakarta-Bogor

(45 km)

2. Current Toll road in operation, 649 km, mainly

constructed before 1997 economic crisis

3. After 1997 economic crisis, Toll roads

construction was halted.

4. Before 2004 Jasa Marga (SOE) was assigned as

both operator and regulator of Toll roads

5. By 2010, 1600 km of Toll Roads are constructed

Ministry of Public Works

First Toll Road

Operated in

1978

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No. Item Regulation

1 Toll Road Provision

Law No.38/2004 on Road

Govt. Regulation (GR) No.15/2005 on Toll Road

Minister of Public Work Decree No. 295/PRT/M/2005 on Toll Road Regulatory Body (BPJT) Minister of Public Work Decree No. 392/PRT/M/2005 on Minimum Standard of Toll Road Services

2 Toll Road Network

Minister of Public Work Decree No. 369/KPTS/M/2005 jo. No. 280/KPTS/M/2006 on Master Plan on National Road Network that included the toll road network

3

Land

Acquisition

Presidential Regulation No. 36/2005 jo. No. 65/2006 on Land Acquisition for implementation of Development for Public Interest

Minister of Public Works Regulation No. 10/PRT/M/2006 on the Guideline for Enterprise Fund Usage for Land Acquisition for Toll Road

4 Toll Road Investment

Presidential Regulation No. 67/2005 on Partnership between Government and Enterprise on Infrastructure Provision regulating the criteria on partnership project, tariff, government support as well as process and procedure of procurement

Minister of Finance Decree No. 38/PMK.01/2006 on Guidance for Implementation and Management of risk on Infrastructure Provision which regulate the Government guarantee to the associated risk related to the political, project performance, and demand risks of PPP project.

Minister of Public Works Regulation No. 27/PRT/M/2006 on Guideline on Toll Road Commercialization

CURRENT MAIN REGULATORY FRAMEWORK IN TOLL ROAD PROVISION

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TOLL ROAD PPP SCHEME – PROJECT VIABILITY APPROACH

Operation and Maintenance

Funding, DED and/or Construction

Government

Enterprise

G

E

ECONOMIC (+) FINANCIAL (-) ECONOMIC (+) FINANCIAL (Marginal) ECONOMIC (+) FINANCIAL (+)

PROJECT VIABILITY PPP SCHEME

G

E

G

E

1

2

3

REFERENCE GR No. 15/2005 Art 19,20,22 GR No. 15/2005 Art 19,20 GR No. 15/2005 Art 19,21 EXAMPLE Tanjung Priok Access, Suramadu Bridge Solo-Kertosono Other pure BOT projects 6

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Toll Road Management Reforms

Reforms

Toll Road Management Reform started in 2004 Reform is mandated by new Road Law No. 38/2004

Establishment of Indonesian Toll Road Authority

Toll road investment open to both SOE and private enterprises

Initial tariff is set based on investment return calculation

Tariff adjustment is evaluated for every 2 years, based on price

consumer index

Land acquisition is the government responsibility

1

2

3

4

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Land Acquisition Reforms

8

Land Freezing Land Price Land Title Revocation Land Capping Land Fund

No land transaction is allowed after toll road corridor been decided by the government

Land price is determined by independent appraisal instead of using tax value of the land

Land title revocation is allowed in the case of no agreement reached on land price among the parties

Government will bear the land cost above proposed land cost agreed in concession agreement

Revolving fund is provided to ease investor risk in case of delay in land acquisition

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Government Supports

1 . Non-Financially Viable Project

• Bid awarded to bidders with the lowest proposed government support,

e.g. Solo-Kertosono

• O&M contract or Leasing contract (DBO or DBL) for toll road which

are financed and developed by Government, e.g. Suramadu bridge

and Tanjung Priok Access

2 . Land Capping

Government bears the cost of land beyond 110 % of land cost proposed

by investor

3 . Land Acquisition Revolving Fund

Government prepaid land acquisition cost, investor repay government

after land acquisition of a section of the road is completed

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ALTERNATIVE TOLL ROAD INVESTMENT SCHEME

(Design, Build, and Leasing & Design, Build, and Operate)

Design & Construction

Operation & Maintenance

Ministry of Finance/ Ministry of Public Works

(Public Sector)

Soft Lender (Multi & Bilateral Funding

Agencies)

Private Company As Design-Build Contractor

(Private Sector)

Loan

Payment Goods & Services (Design-Build)

(a) During Design & Construction in DBL and DBO

(Public Sector)

Agencies)

Private Company As Road Operator (Private Sector)

Repay

Asset Leasing Leasing Fee

(Public Sector)

Agencies) Private Company As O&M Contractor (Private Sector) Repay Payment O&M Services (b1) During Operation in DBL

(b2) During Operation in DBO

Users

Services Tolls

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Toll Road Development Status

No Stage # of Segment Length (Km) Estimated investment Cost (Rp Trillion) Estimated investment Cost (US$ Billion) 1 Operation 16 649.00 -2 Under Construction 6 110.50 11 1.16 3 Concession Agreement Signed 19 721.87 63 6.63

4 Under Bidding Process 6 239.06 17 1.79

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Planned Toll Roads in Java

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Bandung Jawa Barat Jakarta Serang Surabaya Yogyakarta Semarang DKI Banten DIY Jawa Tengah Jawa Timur Kertosono Mojokerto Pejagan Pemalang Batang Cikampek Palimanan Solo Ngawi Pasuruan Probolinggo Banyuwangi Kanci Sukabumi Ciranjang _Demak

Operation Concession Agreement (Contract) Negotiation/Tender

Tender Preparation Financial Closed/Construction

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- Medan-Binjai - Belmera - Medan- Kualanmu- Tebing Tinggi Bakauheni- Terbanggi Besar (Tegineneng- Palembang- Indralaya Pekanbaru-Kandis-Dumai In Operation

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Serangan-Tanjung Benoa

Tender Preparation

Planned Toll Roads in Bali

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<

In Operation Construction Tender Preparation

Menado-Bitung

- Ujung Pandang I&II - Makassar Seksi IV

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TOLL ROAD OPERATED BEFORE 2005

M A IN

R OA D

A C C E S S R OA D

A

1 Jakarta-B o go r-Ciawi 50.00 9.00 P T. Jasa M arga 1978 2 Jakarta - Tangerang 27.00 6.00 P T. Jasa M arga 1983 - 1998

3 Surabaya - Gempo l 43.00 6.00 P T. Jasa M arga 1984

4 Jakarta - Cikampek 72.00 11.00 P T. Jasa M arga 1985 5 P adalarang - Cileunyi 35.63 28.77 P T. Jasa M arga 1986

6 P ro f. DR So edyatmo 14.30 P T. Jasa M arga 1986

7 Lingkar Dalam Ko ta Jakarta 23.55 P T. Jasa M arga 1988

8 B elmera 33.70 9.00 P T. Jasa M arga 1989&1996

9 Semarang Seksi A , B , C 24.75 P T. Jasa M arga 2003

10 Ulujami-P o ndo k A ren 5.55 P T. Jasa M arga 2003

11 Cirebo n-P alimanan 26.30 P T. Jasa M arga 1990

12 JORR W2 Selatan (P o ndo k P inang - Veteran) P T. Jasa M arga 1991 JORR E1 Selatan (Taman M ini - Hankam Raya) P T. Jasa M arga 1998 JORR E2 (Cikunir - Cakung) P T. Jasa M arga 2001 - 2003 13 Cikampek – P adalarang I 17.50 P T. Jasa M arga 2003 - 2004

T o t a l 3 9 0 .0 5 6 9 .7 7 S ub T o t a l A 4 5 9 .8 2

B

1 Tangerang - M erak 73.00 P T. M arga M anggalasakti 1983 - 1996 2 Ir. Wiyo to Wiyo no , M Sc. 15.50 P T. Citra M arga Nusaphala P ersada 1990 3 Surabaya - Gresik 20.70 P T. M argabumi M atraraya 1993 - 1996 4 JORR Selatan (P o ndo k P inang - Taman M ini) 14.25 P T. Jalan To l Lingkar Luar Jakarta 1995 - 1996 5 Harbo ur Ro ad 11.55 P T. Citra M arga Nusaphala P ersada 1995 - 1996 6 Ujung P andang Tahap I 6.05 B o sawa marga Nusantara 1998 7 Serpo ng - P o ndo k A ren 7.25 P T. B intaro Serpo ng Damai 1999

T o t a l 14 8 .3 0 S ub T o t a l B 14 8 .3 0 T o t a l 6 0 8 .12 N o . T OLL R OA D LIN K LE N GT H ( Km) IN V E S T OR / C O C E S S IO N A IR E P R IV A T E C O N C E S S ION A IR E OP E N IN G Y E A R P T J A S A M A R G A 16.77 16

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TOLL ROAD OPERATED SINCE 2005

TOLL ROAD LINGK LENGTH

(KM)

INVESTMENT COST * (Rp. Milyar)

INVESTOR STATUS

1 CIKAMPEK - PADALARANG II

_41.00

_2,300.00

PT. Jasa Marga Operation

2 JORR E1-3, W2-S, E3, E1-4

_14.65

_914.67

PT. Jasa Marga Operation

55.65 3,214.67

T O T A L

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TOLL ROAD UNDER CONSTRUCTION

No. TOLL ROAD LINK LENGTH

(KM) LAND ACQUSITION COST (Bio Rp.) INVESTMENT COST * (Bio Rp.) INVESTOR STATUS

1 WARU - JUANDA _12.80 _300.00 _1,288.00 PT. Citra Margatama Sby Construction, Opening Plan December 07

2 JEMBATAN SURAMADU _5.40 _300.00 _3,268.00 dibangun Pemerintah Construction, Finish year end of 2008

3 SURABAYA - MOJOKERTO _37.00 _400.00 _2,231.82 PT. Marga Nujyasumo Agung

Construction, PPJT Signed 06 Apr 06, FC

24/01/07

4 JORR Seksi W1 _9.70 _- _1,628.00PT. Jakarta Lingkar Baratsatu

Construction, PPJT Signed 02 Feb 07, FC

01/08/07

5 MAKASSAR SEKSI IV _11.60 _10.00 _517.12 PT. Jalan Tol Seksi Empat

Construction, PPJT Signed 29 Mei 06, FC

25/04/07, Opening Plan May 08

6 KANCI - PEJAGAN _34.00 _122.00 _2,094.95 PT. Semesta Marga Raya

Construction, PPJT Signed 29 May 06, FC 09/03/07 110.50 1,132.00 11,027.89 T O T A L

*) Including Land Acquisition Cost

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TOLL ROAD HAS SIGNED CONCESSION AGGREEMENT

NO TOLL ROAD LINK LENGTH(

Km) LAND ACQUISITIO N COST (Bio Rp.) INVESTMEN T COST * (Bio Rp.) INVESTOR STATUS A. FINANCING AVAILABLE

1 SEMARANG - SOLO 75.70 800.00 6,135.00 PT. Jasa Marga TT PPJT 15 Des 06, F.C 7 Maret 07, (DED, Pemb. Lahan on going)

2 GEMPOL - PASURUAN 32.00 220.00 1,800.00 PT. Jasa Marga TT PPJT 29 Mei 06, F.C 7 Maret 07, (DED selesai, Pemb. Lahan on going) 3 BOGOR RING ROAD 11.00 80.00 1,577.00 PT. Jasa Marga TT PPJT 29 Mei 06, F.C 7 Maret 07. (DED

selesai, Pemb. Lahan on going) 4 CINERE - JAGORAWI 14.70 845.33 1,867.05 PT. Trans Lingkar Kita

Jaya

TT PPJT 29 Mei 06, F.C 10 April 07, (DED, Pemb. Lahan on going)

5 DEPOK - ANTASARI 21.70 699.18 2,515.92 PT. Citra

Waspphutowa

TT PPJT 29 Mei 06, F.C 2 Mei 07, (DED, Pemb. Lahan on going) 6 KERTOSONO - MOJOKERTO 41.00 191.31 2,211.72 PT. Marga Hanurata

Intrins ic

TT PPJT 30 Juni 06, F.C 26 Juni 07, (DED, Pemb. Lahan on going)

7 CIKAMPEK - PALIMANAN 116.00 500.00 5,906.27 PT.Lintas Marga

Sedaya

TT PPJT 21 Juli 06, F.C 18 Juli 07, (DED, Pemb. Lahan on going)

8 PEJAGAN - PEMALANG 57.50 189.03 3,235.81 PT. Pejagan Pemalang

Tol Road

9 PEMALANG - BATANG 39.00 134.31 2,292.90 PT. Pemalang Batang

Tol Road

10 SEMARANG - BATANG 75.00 225.00 3,634.64 PT. Marga

Setiapuritama

11 JORR W2 UTARA 7.00 800.00 1,411.00 PT. Jasa Marga TT PPJT 7 Juli 06, Pers iapan Pembebasan Lahan

12 AKSES TANJUNG PRIOK 12.10 290.00 3,400.00 - DED, Pembebasan Lahan (Dana dari Pemerintah)

502.70 4,974.16 35,987.31 B

1 GEMPOL - PANDAAN 13.61 166.00 826.00 PT. Margabumi

Adhikaraya TT PPJT 19 Des 06, (Pemb. Lahan on going) 2 CIKARANG - TANJUNG PRIOK 33.92 225.00 2,358.00 MTD-Nusa Cipta TT PPJT 29 Jan 07, (DED, Pemb Lahan on

going) 3 BEKASI-CAWANG-KP.MELAYU 21.04 449.00 6,185.00 PT.Kres na Kusuma

Dyandra Marga

TT PPJT 22 Feb 07, (DED s elesai, Pemb Lahan on going)

4 PASURUAN-PROBOLINGGO 45.00 149.96 3,314.60 PT Trans-Jawa Paspro

Jalan Tol TT PPJT 25 Juni 07, Persiapan DED 5 WARU(ALOHA) - WONOKROMO- TG. PERAK 18.60 1,295.00 6,491.33 PT. Margaraya Jawa

Tol TT PPJT 19 Juli 07, Persiapan DED 6 CIRANJANG - PADALARANG 33.00 390.00 3,247.50 Bina Puri Nindyacipta

Karyatama TT PPJT 27 Juli 07, Persiapan DED 7 CIAWI - SUKABUMI 54.00 725.60 4,923.70 PT. Trans Jabar Tol TT PPJT 27 Juli 07, Persiapan DED

219.17 3,400.56 27,346.13 721.87 8,374.72 63,333.44 TOTAL SUB TOTAL FINANCING UNAVAILABLE SUB TOTAL

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TENDER BATCH II

No. TOLL ROAD LINK LENGTH (KM)

LAND ACQUISITION COST (Bio Rp.) INVESTMENT COST* (Bio Rp) STATUS REMARK

1 CENGKARENG - BATU CEPER -

KUNCIRAN 15.22 1,108.60 2,363.00

Konsorsium Cahaya Mata Serawak -Jasa Marga-Wijaya Karya-Nindya Karya-Istaka Karya 2 KUNCIRAN - SERPONG _11.19 _899.00 _1,847.00 Konsorsium Astratel-Leighton-Jasa Marga-Trans Utama

3 SERPONG - CINERE _10.14 _647.70 _1,590.00 PT Thiess-Waskita

4 CIMANGGIS - CIBITUNG _25.39 _933.10 _3,359.00 Konsorsium Plus-Bakrie-Global 61.94 3,588.40 9,159.00 T O T A L Penetapan Pemenang Lelang

*) Including Land Acquisition Cost

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TENDER BATCH III

No. TOLL RAOD LINK LENGTH (KM)

LAND ACQUISITION COST (Bio Rp.) INVESTMENT COST* (Bio Rp.) STATUS REMARK 1 SOLO - NGAWI _90.10 _823.60 _4,464.94 2 NGAWI - KERTOSONO _87.02 _565.10 _3,631.67 177.12 1,388.70 8,096.61 PT Thiess Contractors Indonesia Evaluation Process and Negotiation

Tender Batch III

T O T A L

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Toll Road Under Prequalification

No Project Length (Km) Est’d FIRR (%) Estimated Investment Value (Rp Trillion) Estimated Investment Value (US$ Billion) Indicated PPP Scheme

1 PASIR KOJA – SOREANG 15.00 14.88 0.8 0.08 BOT + Govt Support

2 CILEUNYI – SUMEDANG –

DAWUAN 58.50 15.84 4.3 0.45 BOT + Govt Support 3 SERANGAN – TANJUNG BENOA 7.50 8.63 1.2 0.13 BOT + Govt Support 4 TEGINENENG – BABATAN 50.00 12.84 2.8 0.29 BOT + Govt Support 5 SUKABUMI – CIRANJANG 28.00 14.23 1.5 0.16 BOT + Govt Support

6 MEDAN-KUALANAMU-TEBING

TINGGI 60.00 9.75 4. 5 0.47 BOT + Govt Support 7 MEDAN – BINJAI 15.80 11.73 1.0 0.11 BOT + Govt Support 8 PEKANBARU – KANDIS - DUMAI 135.00 11.34 6.0 0.64 BOT + Govt Support 9 PALEMBANG – INDRALAYA 22.00 16.70 0.8 0.08 BOT

10 MANADO – BITUNG 53.80 6.85 4.6 0.48 BOT + Govt Support 11 PANDAAN – MALANG 37.00 17.16 2.9 0.31 BOT

T O T A L 482.60 30.3 3.21

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NEXT TENDER

No. TOLL ROAD LINK LENGTH

(KM)

INVESTMENT COST* (Bio Rp.)

STATUS

1 SEMARANG - DEMAK _25.00 _2960.00 Document Preparation

2 JOGJA - SOLO 40.50 2330.00 AMDAL Study

3 BANDARA JUANDA - TJ. PERAK 23.00 5030.00

4 PROBOLINGGO - BANYUWANGI _170.40 _8000.00 5 CILEGON - BOJONEGARA 15.70 920.00 274.60 19,240.00 T O T A L Document Preparation

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R E M A R K :

= OPERATED

= UNDER CONSTRUCTION/PLAN = PROPOSED 6 TOLL ROAD

PROPOSED 6 INTRA URBAN TOLL ROAD IN DKI JAKARTA

ULUJAMI TOMANG PULO GEBANG KEMAYORAN TANGERANG SERPONG PS. MINGGU RAWA BUAYA KP. MELAYU AIRPORT To MERAK To BOGOR To BEKASI/CIKAMPEK TM. MINI PLUIT SUNTER CAWANG To BEKASI R E M A R K :

STAGE-I = Bekasi - Kp Melayu

= Kemayoran - Kp. Melayu STAGE-II = Rawa Buaya – Sunter

= Kp Melayu - Tomang - Duri Pulo STAGE-III = Sunter - Pulo Gebang

STAGE-IV = Ulujami - Tanah Abang = Pasar Minggu - Casablanca AKSES TANJUNG PRIOK

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No. TOLL ROAD LINK LENGTH (Km) ESTIMATED CONSTRUCTION COST * (Bio Rp) ESTIMATED DIRECT COST** (Bio Rp) EIRR (%)

1. Rawa Buaya - Sunter 18,95 4.314 5.271 32,47

2. Sunter – Pulo Gebang 14,73 3.108 4.118 24,75

3. Duri Pulo – Kampung Melayu 11,38 2.508 3.631 23,90

4. Ulujami – Tanah Abang 8,27 2.011 2.544 34,50

5. Kemayoran – Kampung Melayu 9,64 2.450 4.168 30,63

6. Pasar Minggu - Casablanca 9,56 2.368 3.438 21,68

T o t a l 72,53 16.760 23.170

*) 3 lanes each direction, elevated

**) Including Construction Cost, Land Acquisition, DED, and Engineering Services

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PROPOSED 6 TOLL ROADS AND CENTRAL BUSINESESS

R E M A R K S :

= OPERATED

= UNDER CONSTRUCTION/PLAN = PROPOSED 6 TOLL ROAD = MONORAIL = CENTRAL BUSINESESS ULUJAMI TOMANG PULO GEBANG KEMAYORAN TANGERANG SERPONG PS. MINGGU RAWA BUAYA KP. MELAYU AIRPORT To MERAK To BOGOR To BEKASI/CIKAMPEK TM. MINI PLUIT SUNTER CAWANG KE BEKASI Cilandak Lenteng Agung Cengkareng Puri Kembangan Palmerah

Blok M Halim Perdanakusuma Pulo Gadung Pulo Gebang Kemayoran Monas Mangga Dua Tanah Abang

Segi Tiga Emas

Manggarai Pantai Mutiara

Kapuk

Kelapa Gading Muara Baru

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LOCATION OF PROPOSED 6 INTRA URBAN TOLL ROAD

IN DKI JAKARTA

NO TOLL ROAD LINK

LOCATION 0F THE 6 TOLL ROAD

TOTAL ON THE EXISTING ROAD ON THE RIVER AND WEST FLOOD BASIN ON THE RAILWAY

1 Rawa Buaya - Sunter 15.5 KM - 3.4 KM 18.9 KM

2 Sunter - Pulo Gebang 14.7 KM - - 14.7 KM

3 Kemayoran - Kp Melayu 7.3 KM 2.3 KM - 9.6 KM

4 Duri Pulo - Kp Melayu 3.6 KM 7.8 KM - 11.4 KM

5 Ulujami – Tanah Abang 1.8 KM - 6.5 KM 8.3 KM

6 Ps Minggu – Casablanca 9.6 KM - - 9.6 KM TOTAL 52.5 KM (72,4%) 10.1 KM (13,9%) 9.9 KM (13,7%) 72.5 KM (100%)

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Tn ABANG PASAR MINGGU KALI MALANG SUNTER KAMPUNG MELAYU CASABLANCA GAJAH MADA MATRAMAN DUKUH ATAS KEMAYORAN DURI PULO TOMANG

POLICY DIRECTION AND PPP INVESTMENT OPPORTUNITIES ON TOLL ROAD SECTOR