PLUS buying 55% stake in Indonesia’s PT Lintas

  • Business
  • Thursday, 02 Nov 2006

JAKARTA: PLUS Expressways Bhd plans to acquire a 55% stake in Indonesia’s PT Lintas Marga Sedaya, the holder of the biggest concession in the Trans Java Expressway. 

This foray into Indonesia comes just over a month after PLUS won its first overseas contract in a toll road concession in Mumbai, India, as the Malaysian toll operator expanded beyond Malaysian shores in a bid to secure new revenue streams. 

Datuk Idrose Mohamed

PT Lintas is the concession holder of the longest tranche of toll highway with a distance of 116km from Cikampek to Palimanan, which forms part of the Trans Java Expressway. The expressway links the island of Java from Merak in the east to Banyuwangi in the west. 

PLUS, which yesterday signed a Heads of Agreement on its proposal, had been cautious in its foray abroad.  

Managing director Datuk Idrose Mohamed said the company decided to pursue the proposal for a stake in PT Lintas as it felt “more comfortable” doing business in Indonesia now, given the serious commitment and interest shown by the Indonesian government to protect foreign investors in the country. 

“We have been cautious and will only choose among the best to invest in and it has been our intention to take a majority stake, besides going for sizeable projects,” he told Malaysian journalists here on the sidelines of the two-day Indonesia Infrastructure 2006 conference and exhibition, which attracted 1,200 delegates from 30 countries. 

“This stretch is a continuation of a completed expressway that links Merak to Jakarta and I am comfortable as I have travelled on the stretch and seen the traffic volumes,” he said.  

A feasibility study is still needed to verify the traffic volume and the construction cost, which is tagged at US$590mil. 

“We expect to sign the definitive agreement by year-end,” Idrose said, adding that the pricing of the 55% stake would only be decided once the study was completed.  

In a statement to Bursa Malaysia, PLUS said it signed the agreement to buy shares in PT Lintas from PT Baskhara Utama Sedaya.  

The concession period is for 35 years. Idrose said the government would acquire the land for the toll road. Construction would begin early next year and funding for the stake purchase and construction would be from the debt market. 

Land acquisition had been an issue in Indonesia's infrastructure development but the government had recently addressed the issue by changing polices and regulations and even setting up a revolving fund to facilitate land acquisition for public projects. 

Besides this proposed purchase, Idrose said PLUS had also submitted conditional tender bids for four projects and had since been pre-qualified for them. They include the 15.22km Cengkerang-Batu Ceper-Kunciran, the 11.19km Kunciran-Serpong, 10.14km Serpong-Cinere and 25.39km Cimanggis-Cibitung expressways. 

Earlier at the conference, Indonesian President Dr Susilo Bambang Yudhoyono, in calling for more foreign direct investments, said over the next few years, Indonesia needed at least US$22bil per year to build infrastructure in the energy sector, including roads, ports, harbours, housing, water sanitation and others. 

“The Government will provide only part of the funding, while the major portion will come from the private sector,” he said. 

He also announced 10 model infrastructure projects. “In the very near future, we will offer more projects in transportation, toll roads, drinking water and electricity. We hope to see these model projects replicated in other areas,” he said. 

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