Modernising The National Road Network Report

Modernising the National Road
Network:
A Planning Framework to Improve Connectivity
and Development
Modernising the National

Road Network:
A Planning Framework to
Improve Connectivity and
Development
CONSULTANT REPORT
November 2012
INDONESIA INFRASTRUCTURE INITIATIVE

This document has been published by the Indonesia Infrastructure Initiative (IndII), an
Australian Government funded project designed to promote economic growth in
Indonesia by enhancing the relevance, quality and quantum of infrastructure
investment.
The views expressed in this report do not necessarily reflect the views of the Australia
Indonesia Partnership or the Australian Government. Please direct any comments or
questions to the IndII Director, tel. +62 (21) 7278 0538, fax +62 (21) 7278 0539.
Website: www.indii.co.id.
ACKNOWLEDGEMENTS
This report has been prepared by William D. Paterson, Senior Policy Adviser, who was
engaged under the Indonesia Infrastructure Initiative (IndII), funded by AusAID, as part
of the Activity 248.
The support provided by Dir. Haris Butabara, Ir. Slamet Muljono and Dedy Gunawan
(Planning and Programming Division (Bipran), Directorate General of Highways), David
Foster, Philip Sayeg, Davey Kusmayadi and Max Antameng, and the guidance and
reviews by David Shelley, John Lee and David Ray are all gratefully acknowledged. The
report draws on consultants reports prepared by AECOM Ltd. involving Robin Guess,
Chris Burley, Lindsay Shepherd and others. Any errors of fact or interpretation are
solely those of the author.
William D. Paterson
Jakarta, November 2012
IndII 2012
All original intellectual property contained within this document is the property of the Indonesia
Infrastructure Initiative (IndII). It can be used freely without attribution by consultants and IndII partners in
preparing IndII documents, reports designs and plans; it can also be used freely by other agencies or
organisations, provided attribution is given.
Every attempt has been made to ensure that referenced documents within this publication have been
correctly attributed. However, IndII would value being advised of any corrections required, or advice
concerning source documents and/ or updated data.
Cover Photo: Expressway network gives high connectivity for freight and passengers. Jakarta
Cikampek Toll Road, West Java. Photo by Timur Angin
TABLE OF CONTENTS
ACRONYMS ............................................................................................................. V
EXECUTIVE SUMMARY ........................................................................................... VII
CHAPTER 1: NEED FOR A NEW APPROACH ON NATIONAL ROAD NETWORK
DEVELOPMENT ........................................................................................................ 1
1.1
1.2
1.3
1.4
1.5
FACILITATING INCLUSIVE NATIONAL DEVELOPMENT BY IMPROVED

CONNECTIVITY ................................................................................ 1
CURRENT GOVERNMENT INITIATIVES AND OPPORTUNITIES ........................ 4
SHAPING THE NATIONAL ROAD NETWORK TO SUPPORT ECONOMIC GOALS
AND GROWTH ................................................................................ 6
INDII STUDY ON ROAD NETWORK PLANNING ......................................... 7
1.4.1 Approach and Results .............................................................. 7
THIS REPORT .................................................................................. 8
CHAPTER 2: CHALLENGE FOR NATIONAL CONNECTIVITY ........................................... 9

2.1
2.2
CONTEXT ....................................................................................... 9
STRATEGIC CHALLENGES .................................................................. 11
2.2.1 Poor Trans-Regional and Metropolitan Travel Connectivity.. 11
2.2.2 Investment Planning and Programming Processes Can be
Improved ................................................................................ 14
2.2.3 Narrow Financing Base........................................................... 16
2.2.4 Increasing Adverse Consequences of Road Use .................... 17
2.2.5 Organisational Capacity Improving Slowly ............................. 18
CHAPTER 3: DEVELOPMENTAL NEEDS ..................................................................... 19

3.1
3.2
3.3
PLANNING FRAMEWORK FOR ROAD NETWORK DEVELOPMENT ................. 19

3.1.1 Improving Trans-Regional and Intra-island Connectivity ....... 19
3.1.2 Improving Metropolitan Urban Mobility ............................... 21
3.1.3 Input to MTEF and RENSTRA .................................................. 22
IMPROVEMENTS TO PLANNING PROCESSES AND POLICIES ........................ 22
ORGANISATIONAL CAPACITY NEEDS................................................... 23
3.3.1 Strengthening DGH Planning.................................................. 23
3.3.2 Strengthening BPJT Feasibility and Delivery Functions.......... 23
3.3.3 Enhancing Supporting Policies and Mechanisms ................... 23
CHAPTER 4: PROPOSED FRAMEWORK FOR PLANNING DEVELOPMENT OF THE

NATIONAL ROAD NETWORK ................................................................................... 25
4.1
4.2
4.3
CURRENT NATIONAL MASTER-PLAN FOR ROAD INFRASTRUCTURE

DEVELOPMENT ............................................................................. 26
INDII CORRIDOR PLANNING APPROACH .............................................. 28
ROAD RENEWAL STRATEGY .............................................................. 32
4.4
4.5
FORECASTING FUNDING REQUIREMENTS AND OUTCOMES ....................... 35

4.4.1 Forecasting Forward Funding Requirements ......................... 35
4.4.2 Forecasting Outcomes or Performance Indicators ................ 38
APPLYING THE PLANNING FRAMEWORK .............................................. 38
4.5.1 Steps in Applying the Planning Framework ........................... 39
CHAPTER 5: BUILDING CAPACITY ............................................................................ 44

5.1
5.2
DGH-BIPRAN ............................................................................. 44
5.1.1 Establishing Strategic Priorities and Supporting Changes to
Policy and Regulations ........................................................... 44
5.1.2 Planning of Expressway Network and Road Corridors ........... 45
5.1.3 Coordination and Roles of DGH and BPJT .............................. 45
BPJT .......................................................................................... 46
CHAPTER 6: CONCLUSIONS AND RECOMMENDED ACTIONS .................................... 48

ANNEXES ............................................................................................................... 52
ANNEXE 1: NATIONAL MASTER PLAN FOR ROAD INFRASTRUCTURE DEVELOPMENT 52
ANNEXE 2: ECONOMIC AND FINANCIAL DATA ON PLANNED EXPRESSWAY
DEVELOPMENT IN SUMATERA EASTERN CORRIDOR AND JAVA NORTHERN
CORRIDOR. ........................................................................... 54
ANNEXE 3: GENERAL GUIDANCE ON PREPARATION OF A NATIONAL ROAD MASTER
PLAN ................................................................................... 55
REFERENCES .......................................................................................................... 63
ii
LIST OF TABLES
Table 1. Current Low Connectivity in Economic Corridors ............................................. 13
Table 2: DGH Road Widening Program 2010-2014 and 2015-2024 Forecast................. 27
Table 3: Estimates of Forward Funding Requirements for 2012-2029 from Planning
Analysis ............................................................................................................ 36
Table 4. Current Development in National Arterial Road Corridors of National
Masterplan ...................................................................................................... 52
Table 5. Economic and Financial data: Java North Corridor Expressway ....................... 54
Table 6. Economic and Financial data: Sumatra East Corridor Expressways .................. 54
LIST OF BOXES
Box 1. Current Road Classification .................................................................................. 10
Box 2: Summary of Steps for Preparing National Road Master Plan .............................. 42
LIST OF FIGURES
Figure 1: Expressway Development Implementation Plan Sumatera Eastern Road
Corridor .......................................................................................................... xii
Figure 2: Travel Time Outcome Forecasts from Corridor Plan Sumatera Eastern Road
Corridor .......................................................................................................... xii
Figure 3: Funding Requirement Forecasts from Corridor Plan - Sumatera Eastern Road
Corridor ......................................................................................................... xiii
Figure 4: Forecast of Average Annual Funding Requirements on National Roads 20152029 ................................................................................................................ xv
Figure 5: Competitiveness in Infrastructure Regional Comparison ............................... 1
Figure 6: Priority Economic Corridors Defined in MP3EI Connectivity Strategy ............... 3
Figure 7: Extension of Toll Road Network Historical, Current and Planned
Implementation ................................................................................................ 5
Figure 8: Normalised Trip Times Estimated for Six Economic Corridors, 2012 .............. 12
iii
Figure 9: DGH Arterial Road Widening Program 2010-2014 .......................................... 26

Corridor .......................................................................................................... 29
Figure 11: Capacity Expansion Profile - Staged Development in Parallel Facilities over
Long-term 20-year Period - Sumatera Eastern Corridor ................................ 29
Figure 12: Travel Time Outcome Forecasts from Corridor Planning Approach
Sumatera Eastern Road Corridor .................................................................... 30
Figure 13: Funding Requirement Forecasts from Corridor Plan - Sumatera Easter Road
Corridor .......................................................................................................... 31
Figure 14: A Road Renewal Strategy would Follow a Selected Long-term Alignment
Option ............................................................................................................. 33
Figure 15: Forecast of Average Annual Funding Requirements on National Roads 20152029 ................................................................................................................ 36
Figure 16: Example of Forecast Average Travel Time based on National Road
Development Plan 2015-2029 ........................................................................ 38
Figure 17. Expected Distribution of Width Standard on National Arterial Roads after
DGH 2010-14 Road Development Program ................................................... 53
Figure 18. Flowchart for Developing a National Road Master Plan ................................ 57
iv
ACRONYMS
ADB
Asian Development Bank
AusAID
Australian Agency for International Development
BAPPENAS Badan Perencanaan dan Pembangunan Nasional (National Agency for

Planning and Development)
BLU
Badan Layanan Umum (General Service Agency)
BPJT
Badan Pengatur Jalan Tol (Toll Road Regulatory Agency)
DGH
Directorate General of Highways
GoI
Government of Indonesia
IndII
Indonesia Infrastructure Initiative
INPRES
Presidential Instruction
IRMS
Indonesian Road Management System
KEPPRES
Presidential decree
KKBP
(CMEA)
Kementerian Koordinator Bidang Perekonomian (Coordinating Ministry

for Economic Affairs)
M&E
Monitoring and Evaluation
MoF
Ministry of Finance
MoT
Ministry of Transportation
MPW
Ministry of Public Works
MSOE
Ministry of State-Owned Enterprises
MTEF
Medium-Term Expenditure Framework (Kerangka Pengeluaran Jangka

Menengah)
MP3EI
Masterplan Percepatan dan Perluasan Pembangunan Ekonomi Indonesia

(Master Plan for the Acceleration and Expansion of Indonesias Economic
Development)
PERPRES
Presidential Regulation
PBB
Performance-Based Budgeting (System)
PPP
Public-Private Partnership
RENSTRA
Rencana Strategis (Strategic Plan)
RPJM
Rencana Pembangunan Jangka Menengah (Medium Term Development

Plan)
RPJP
Rencana Pembangunan Jangka Panjang (Long Term Development Plan)
RPN
Rencana Pembangunan Nasional (National Development Plan)
VGF
Viability Gap Funding
vi
EXECUTIVE SUMMARY
Indonesias trade competitiveness and future growth prospects depend on strong
action to improve connectivity between economic centres. This report outlines a new
framework for modernising the national road network to achieve this. It requires a
strategic shift in funding priority from asset preservation to capacity investment to
underpin the coming medium-term strategy (RENSTRA), a change in public and private
funding modality, and greater accountability for performance against national targets
for connectivity and mobility.
The Challenges
Indonesia ranks below the medians for ASEAN and developing Asia in terms of road
infrastructure in the Global Competitiveness Indices. The slow development of
expressways and the low capacity of the arterial network in response to rapidly rising
traffic demand are the two main reasons why average trip times between major
centres are nearly double those of key neighbouring countries: 2-4 hours/100 km
compared to 1.0-1.5 hrs/100 km in Malaysia, Thailand and China.
The Master Plan for the Acceleration and Expansion of Indonesias Economic
Development (MP3EI1), which focuses on six priority economic corridors2, provides a
framework for prioritising and coordinating multi-sectoral investments in inter-regional
and local connectivity. For roads this implies high-capacity, high-speed inter-regional
connections between main centres and good local connectivity with feeder markets
and production centres. This framework covers two high-productivity corridors (Java
and Sumatera), two rapid-growth corridors (Kalimantan and Sulawesi) and the two
eastern island groups with sparse development and many marine or missing links (BaliNusa Tenggara and Papua-Maluku).
Connectivity has not been a priority in recent network planning and current standards
show a huge backlog of investment in national road capacity. Corridor travel times are
more than a day (26 hours) on Java, more than two days on Sumatera, Sulawesi and
Bali-Nusa Tenggara, and over three days on Kalimantan (Pontianak-Samarinda) and in
Papua-Maluku. In the north Java and east Sumatera corridors, designated as trunk
routes by the Directorate General of Highways (DGH), widening to four-lane highways
has raised average travel speeds to 50 km/hr, but on most other arterial roads the
average speeds are typically 40 km/hr or less. Where roads are widened, traffic flow is
usually impeded by low geometric standards, dense roadside land-use and slowmoving heavy vehicles.
Masterplan Percepetan dan Perluasan Pembangunan Ekonomi Indonesia (MP3EI),

Coordinating Ministry for Economic Affairs (CMEA) 2011.
2
Sumatera (Aceh to Lampung plus three transverse connectors), Java (Serang-Jakarta-Surabaya
and Semarang-Jogyakarta-Banyuwangi), Kalimantan (Pontianak-Banjarmasin-Samarinda),
Sulawesi (Makassar-Mamuju-Kendari-Palu-Gorontalo-Manado), Bali-Nusa Tenggara, and
Papua-Maluku-Merauke.
vii
In the past two decades, road planning has followed a two-track approach. For the
main national arterial and collector road network (38,000 km in total length) the
investment priority of the past two strategic plans (RENSTRA 2005-09, 2010-14) has
been asset preservation and road condition targets (86 percent stable by 2009, 94
percent stable by 2014). Budget allocations for network development have been of
secondary priority and have gone into four-laning on parts of selected trunk routes and
minor widening or improvement to intermediate standards on other arterial routes,
especially in the current period 2010-14. Even so, trip speeds and safety improvements
have been marginal due to low geometric improvement and short-term focus of the
planning process.
The second track of road planning has relied on private sector finance to construct toll
roads under private-sector concessions. Of the nearly 3,000 km of expressways
needed, only 700 km are in operation and a further planned 946 km have been delayed
by a combination of concession financing failures, land acquisition delays and a slowdown in private-sector interest. DGH has identified future expressways in several main
corridors, but the process for determining their feasibility and the capacity of the Toll
Road Regulatory Agency (BPJT) in preparing them for market have been hampered by
their low financial viability, problems of land acquisition and an inappropriate risk
allocation in the concessioning framework.
Public spending on national roads could deliver better value for money. Road condition
has been deteriorating rapidly and is the subject of public complaints and demands
from DGH for increased funding for road preservation. The 2010 IndII study on
medium-term expenditure planning, which included an evaluation of the performance
of past and current programs, identified key areas where improvements were needed.
It found that overall life-cycle costs of road and bridge assets were higher than
technically necessary or economically optimal leading to an inefficient use of funds
and strain on the road budget. The reasons included:
In regard to program delivery: (i) short asset life arising from low design standards
and premature deterioration, and issues in project preparation, vehicle
overloading, construction industry incentives and project management; (ii) high
project costs arising from inefficient procurement, including fragmentation of
projects, weak market competition and corruption; and (iii) weak project
management with greater priority given to budget execution than staff capability
and performance.
In regard to network development and capital investment: (i) short-term and costly
capacity improvements including marginal widening of existing roads and not
addressing longer-term functional requirements of alignment, right-of-way and
safety; (ii) unresolved spatial planning and land issues, including land acquisition
and access control; and (iii) lack of high-capacity connections between regions and
growth centres and a conflict of investment priorities between expressways and
other roads in primary corridors.
viii
Current Opportunities
Large increases in the national road budget over recent years have meant that
substantial funding is now available for investment in road development. With a sixfold increase in the seven years since 2005 (the budget averages IDR 30 trillion/yr in
the current RENSTRA) the funding needs for asset preservation are amply covered and
substantial funding could become available for investment in network development.
The preparation in 2013 of the RENSTRA 2015-19 provides an opportunity to shift the
priority from preservation to network development.
The modernisation of government systems, through medium-term expenditure
planning, performance budgeting and administrative reform, allows more room for
major multi-year programs and for tying spending performance to strategic targets
such as connectivity that have impact on economic growth.
Expressway development is starting to revive after a long hiatus, a new legislation
resolving land acquisition delays has been passed and the framework for private sector
investment and Public Private Partnerships (PPPs) is gradually improving. After a
decade of renegotiation and restructuring, many stalled toll road projects are now
under implementation and other planned projects are under preparation. This is
bringing pressure on the capacity of BPJT, the Toll Road Regulatory Agency, to manage
the delivery of an accelerated program and makes it timely to consider changes to its
functional role. The Law no. 2/2012 on public land acquisition3 and implementing
regulations provides for land acquisition for national roads to be undertaken by the
national government instead of local governments, reducing the risk on private
investors and accelerating the processes of consultation and compensation. New
attention to managing the risk profile in PPPs and to mechanisms such as Viability Gap
Funding (VGF) to support projects that have low financial viability is intended to attract
greater private sector investment.
Identifying a Way Forward
Following its 2010 study, IndII supported a study in 2011 on the planning framework
and investments needed to modernise the national road network to achieve national
connectivity goals. The challenges to improving road connectivity include:
The demand for road transport is high and rising rapidly. Over 70 percent of freight
and 82 percent of passenger travel are carried by road transport. The road
transport fleet doubled from 41 to 80 million vehicles in the five years from 2004
to 2009. Within this, motorcycles increased fastest and accounted for 75 percent of
all vehicles in 2009. With current motorisation still comparatively low (at 70
vehicles per thousand population excluding two-wheelers) and with rising income,
the fleet is expected to continue growing at about 10 percent per year.
Law no. 2 of 2012 on Acquisition of Land for Development in the Public Interest and
Presidential Regulation no. 71 of 2012 on the Implementation of Land Acquisition for
Development in the Public Interest
ix
Road density and capacity is low compared with neighbouring countries, and the
expressway network density is considerably lower. The national road network,
comprising about 8 percent of the total network length of 477,000 km, is being
expanded by about 5 percent/year in road space (lane-km) and extended also by
about 5 percent/year in length through the construction of strategic roads in
remote areas and reclassification of other roads. The expressway network density
is less than a tenth of that in Malaysia, China and Philippines. A third of all vehicle
travel is carried by the national road network, but low geometric standards in hilly
terrain and encroachment from roadside development cause travel speeds to
average only 40-50 km/hour on the main arterials. Road safety is poor with over
30,000 fatalities/year, twice that of neighbouring Malaysia.
Trans-regional and metropolitan connectivity is poor and not monitored. Most

vehicle travel is concentrated in urban areas where speeds are generally very low.
On inter-urban national roads the
average travel speed was about
40 km/hour in 2005, but might be
closer to 50 km/hour where there
has been widening to four lanes;
elsewhere, conditions will have
deteriorated. Together with the
lack of distance reductions
brought by new alignments, these
low speeds result in connectivity
performance of only 50-60
percent of that of major
Inadequate capacity for heavy mixed traffic
neighbours. However these travel
slows travel and raises safety risks. NR14
time data are not yet regularly
Semarang. Photo by Phillip Jordan
surveyed, reported or used in
planning targets.
The restriction of expressway development to toll roads financed only by the

private sector, along with other factors, has limited the delivery of a high-capacity
network. Expressway length has increased by less than 10 km/year over the past
two decades compared with a need in excess of 100 km/year. The focus on the
financing modality rather than functional standards has led to a large backlog in
expressway capacity and to distorted and conflicting investments in key economic
corridors. There is a need to introduce a formal functional classification for
expressways, address a broader range of financing options that facilitate a higher
share of public funding, and improve the planning and administration of a national
expressway network.
Road spending priorities need to be linked more directly with national

development goals. The strategic targets of previous RENSTRAs have focused on
asset condition but not network function and connectivity. Appropriate
performance indicators need to be defined for connectivity and appropriate
planning procedures developed to allow achievement of connectivity goals to be
demonstrated.
Proposed Framework for Planning Development of the National Road Network

A new framework is proposed to produce and update DGHs national master plan for
road infrastructure. The framework would provide an outcome-oriented, analytical
basis to address the challenges identified for the primary network, feeding directly into
the funding requirements for the medium- and long-term plans, and defining outcome
targets for connectivity. There are two key elements in the proposed framework.
A Long-term Road Corridor Plan is the key tool of the proposed planning framework. It
would be used to optimise road infrastructure and investment in each of the main
MP3EI economic corridors over a multi-year timeframe. The corridor plan for each
corridor would provide:
A strategy for developing the optimal road infrastructure arterial road and
expressway standards and phasing - needed over a 50-year horizon. This will
prioritise investment in both the existing arterial network and the emerging
expressway network over the coming 20-year period.
A pipeline of investment projects for successive five-year periods, staged to

optimise functional benefits and spread funding requirements, and identifying
bankable projects for PPP delivery.
Evaluation of the infrastructure standards and the connectivity delivered in terms

of measurable journey times, which will allow performance targets to be linked to
the capital investment plan.
A focus on the location and staging of the expressway network that would form the
backbone of trans-regional connectivity, with staged implementation.
An optimised approach to raising the arterial roads in the corridor to modern

highway standards, including realignment and renewal of the road structure,
reduced annual costs, reduced social and environmental impacts and greater
benefits than the present incremental approach.
A Road Renewal Strategy would supplement the Corridor Plans. It would provide
criteria for upgrading the arterial and primary collector roads in the national road
network to modern geometric and structural standards able to support smooth safe
travel and freight with low maintenance. This strategy would improve local
connectivity, extend road life, and make more effective use of funds over the long
term than the current incremental approach to betterment and widening. With staging
by successive five-year periods over 20 years, it would support the preparation of
RENSTRA plans and funding estimates.
Together the medium-term Corridor Plans and Road Renewal Strategy would
complement the asset preservation programs but would take precedence on individual
links in order to ensure that funds for asset preservation were not wasted in conflict
with scheduled development investments.
xi
Illustration of Road Corridor Plans

Examples of the corridor planning approach were prepared for the Sumatera eastern
road corridor and the north Java corridor, using existing study data.
The corridor plan generates four types of output:
1. A road development implementation plan showing the long-term schedule over
about 25 years and the timing for each road segment of project preparation, land
acquisition and construction activities. In the example illustrated in Figure 1, the
activities for developing seven expressway segments in the eastern corridor and
lateral corridors are shown over five successive 5-year plans from 2012 to 2030. A
parallel long-term schedule would show the development of the arterial roads in
the corridor.
Figure 1: Expressway Development Implementation Plan Sumatera Eastern Road Corridor
2010-14
2015-19
2020-24
2025-29
>2029
North-South segments
Bakauheni-Palembang
Pekanbaru-Medan
Palembang-Pekanbaru
Medan-Aceh
East-West connectors
Pekanbaru-Padang
Palembang-Bengkulu
Tebing Tinggi-Sibolga
Legend
Project preparation
Land acquisition
Construction
Travel time from Lampung, hours
2. A strip-map of road asset standards in the corridor, depicting the width and length
of each section of the road assets (arterial and expressway), colour-coded for the
5-year period in which it would be opened. An example is shown in the main report
in Figure 6. In this case, the plan shows the arterial road being improved to a
minimum 7 m width standard over the full length of 2,536 km by 2027, with
segments near Pekanbaru and
Medan widened to four-lanes.
Figure 2: Travel Time Outcome Forecasts from
The parallel expressway with a
Corridor Plan Sumatera Eastern Road Corridor
four-lane
dual
carriageway
standard would be opened in
70
66
stages between 2020 and 2030,
Total travel time Lampung to B Aceh, hr
54
60
with a total length of 2,014 km
18
50
45
a distance reduction of 20.6
16
33
40
percent.
17
15
14
25
30
B Aceh
3. A travel time chart showing the
13
Medan
10
6
20
20
estimated travel times between
Pekanbaru
16
7
7
Palembang
14
key nodes along the corridor at
10
8
8
Lampung
11
9
5
5
5
the end of each 5-year period. In
0
2009
2014
2019
2024
2029
the
above
example,
the
RENSTRA End-year
reduction in travel times varies
by segment and period and
results in a reduction in travel time from Palembang to Medan from 37 hours to 15
xii
hours by 2024, and for the overall trip from Bandar Lampung to Bandar Aceh from
66 hours to 25 hours by 2030, as shown in Figure 2.
Funding requirement, IDR trillion
Figure 3: Funding Requirement Forecasts from

Corridor Plan - Sumatera Eastern Road Corridor
Funding Sources, IDR trillion
4. Multi-year funding requirements,

showing
the
funding
requirements by annual or 5-year
periods, disaggregated by budget
line. For the above example, the
funding required for expressway
development,
arterial
road
development, and arterial road
preservation is shown in Figure
3(a) and the funding source
(public and private based on
financial viability) in Figure 3(b)
indicating total requirements of
IDR 12.5, 61.0, 66.6 and 78.2
trillion in the periods from 2012
to 2029. It is notable that, in this
example, the financially viable
private
sector
investment
amounts to only IDR 8.5 trillion
or 4 percent of the IDR 218
trillion required over the 17 year
period. Thus the PPP schemes
would need to be designed to
facilitate substantial portions of
public funding through either
VGF or a life-cycle/annuity
mechanism.
80
70
60
50
40
30
20
10
0
2012-14
2015-19
2020-24
2025-29
Expressway
development, E
2.613
54.866
61.451
73.866
Arterial road
development, E
7.634
2.287
0.865
0.415
Arterial road
preservation, E
2.238
3.872
3.872
3.872
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
2012-14
2015-19
2020-24
2025-29
Public sector
12.5
54.0
64.6
78.2
Private sector
0.0
7.0
1.5
0.0
Applying the Road Renewal Strategy

Even when present plans for expressway development are complete, reaching about
4,000 km by 2029, the expressway network would make up only about ten percent of
the national road network and then mainly in the most heavily trafficked corridors in
the west.
The road renewal strategy would provide the long-term planning framework for
progressively upgrading the arterial road network to modern standards and lowering
annual costs. Arterial roads would be upgraded to modern standards, section by
section, at an appropriate time according to the priorities within the network and
region. The existing road would be replaced by new construction or reconstruction,
with modern alignment and cross-section. The renewed road would have a long
expected life of 20 years or more, lower preservation costs, better safety, and a strong
foundation to support future strengthening for growth in traffic loads. This would
result in lower overall annualised costs, despite a higher initial cost.
xiii
Road renewal would provide the opportunity for adopting the appropriate road
alignment for the long-term. The alignment would be designed for a 25-50 year period,
including provision for appropriate right-of-way. The appropriate alignment may be in
the existing location but in some cases may smooth the curvature to improve flow and
safety, or be relocated to take account of spatial plans, geotechnical or environmental
risks, or to reduce trip distance. While land acquisition requirements may be
substantial, a one-off upfront action may be a suitable trade-off that can avoid the
need for future repeated social disruption and higher costs.
In budgetary and financial terms, road renewal may cost more than the current
incremental widening strategy in terms of initial cost, but would be less than the
current spending when annualised over 5-20 years. The current costs of widening and
road renewal (to full 7 m width on 12 m foundation) are IDR 2-3 billion/km and IDR 5
billion/km respectively. With future preservation needs reducing to IDR 100-150
million/km/year, the simple annualised costs including initial development and
subsequent preservation amount to IDR 300-350 million/km/year over 20 years. This is
about half the current spending of IDR 700 million/km/year (after excluding nonpavement expenditures). Annual spending of IDR 5-10 trillion/year would fund renewal
of 1,000-2,000 km of national road each year and would modernise the arterial road
network of 30,000 km in 15-25 years.
Forecasting Funding Requirements and Outcomes
The power of the proposed planning framework becomes still more evident through
the long-term forecasting of forward funding requirements and outcomes for all
national roads. Combining the outputs of the corridor plans and the road renewal
plans, the framework is able to generate forecasts of funding requirements for the
entire national road network, linked to spending timeframe and to performance in
terms of travel time and accessibility.
Using the IndII study example for demonstration purposes, and applying the renewal
strategy over the 15-year period 2015-2029, the following scenario resulted: (i)
expressway construction of 3,700 km (including north Java, east Sumatera and laterals,
and 300 km in other corridors); (ii) road renewal applied to 30,300 km of arterial roads
beginning with trunk road corridors of 8,700 km; and (iii) reducing the cost of road
preservation from IDR 300 million/km/year to IDR 150 million/km/year after road
renewal.
The forecast national road funding requirements for this scenario are shown in Figure 4
(see also Table 3 in the report): annual public funding requirements would need to rise
by 64 percent overall (from the present IDR 32 trillion/year to about IDR 48
trillion/year in the next 2015-19 RENSTRA and to about IDR 56 trillion/year in 2020-24)
before falling again after 2025. These illustrative results probably represent an upper
limit and of course could be spread to provide more uniform levels of funding.
xiv
Figure 4: Forecast of Average Annual Funding Requirements on National Roads 2015-2029
Annual Funding Requirement,

IDR trillion (2011 prices)
70
60
50
40
Expressway - private funding
30
Expressway - public funding
20
Arterial road development
10
Road preservation
Road management
2005-09
2010-14
2015-19
2020-24
2025-29
Three observations stand out:
Most of the increased funding would be needed for expressway development,

requiring IDR 360 trillion of funding over 15 years over the period 2015-24.
However only a sixth (IDR 60 trillion) of this is likely to attract private sector
investment due to the low or marginal financial viability of many packages outside
the north Java corridor. Thus it will be imperative to find PPP mechanisms which
facilitate substantial public funding contributions in the order of IDR 300 trillion.
VGF mechanisms which involve upfront transfers could result in demands for
public funding of up to IDR 27 trillion/year in 2020-24 as seen in the figure above.
Others, such as annuity or lifecycle mechanisms, which spread the public payments
over a long period such as 30 years, would reduce the demand for public funding to
about IDR 10 trillion per year as well as producing more reliable outcomes.
Development to modernise the arterial road network would require about IDR 19
trillion/year to be completed within the 15 year period, with two-thirds spent on
road renewal and one third on bridges and other needs.
The funding requirement for asset preservation begins at the existing level but
would decline as the arterial road network becomes modernised with more
durable performance and lower preservation costs.
Lastly, forecast average travel times in the main corridors (hr/100 km) over the 15-year
period could be generated and presented either as a national average or disaggregated
by region or corridor (e.g., see figure 11 in the main report).
Applying the Framework and Building Planning Capacity
In this report, guidance is provided on the following nine steps involved in preparing a
national road master plan using the framework: identifying the priority economic
corridors; defining the road corridors and their priorities; specifying the levels of
service; adopting appropriate design standards; defining the national expressway and
highway network and supporting access roads; identifying connections between
economic corridors; preparing the corridor development plans; developing a 20-year
budget and financing plan for each road corridor; and preparing the initial priority
projects for implementation.
xv
Findings and Recommendations

In adopting the proposed framework, DGH would have a rigorous basis for evaluating
alternative spending strategies and development targets, serving as a basis for
preparing medium- and long-term expenditure strategies for national roads. The two
elements of the framework individual long-term corridor plans and a road renewal
strategy would provide the basis for evaluating the physical outputs, funding
requirements and performance outcomes of various scenarios.
A preliminary demonstration of the framework has quantified the large backlog in
capacity development of the national road network. Public spending on national roads
would need to rise by 66 percent from the present IDR 30 trillion/year to an average of
IDR 49 trillion/year over the 15-year period remaining in the current long-term plan
(RPJN). All the increase would need to be allocated to road development, raising its
allocation to about 80 percent of the total.
An investment of IDR 638 trillion (in 2011 prices) in road development would be
needed to improve connectivity by over 40 percent in terms of average travel times,
especially in the priority economic corridors, over the fifteen year period 2015-29. A
little over half of this, IDR 360 trillion, would be required to build 3,700 km of
expressway connecting the countrys main economic corridors, of which about one
sixth is likely to attract private sector investment and about IDR 300 trillion is to be
provided through public funding mechanisms. The remaining IDR 278 trillion would be
invested in the renewal of 25,000 km of arterial roads and improvements to bridges
and other national roads.
The following actions are recommended for implementing the proposed planning
framework:
Road network development needs to become the strategic priority for DGH,
requiring a proactive and long-term approach, with road preservation taking a
secondary role.
Revisions will need to be made to some policies, regulations and laws to reflect and
support the shift in strategic priority and the modernisation of the national road
network.
A formal plan for road corridors, incorporating trunk routes and arterial routes,
should be defined in relation to the national spatial plan.
An expressway network should be defined as an identifiable network within

national roads, separate from arterial roads.
An initial long-term master plan for national road infrastructure should be

prepared to serve as the basis for preparation of the 2015-19 RENSTRA.
The preparation of road corridor plans for prioritised corridors should be

developed as a DGH procedure, based on the example provided in this report and
supporting documents.
xvi
Outcome indicators - such as road transport demand, travel times and distances for
the corridor need formal definition and inclusion in the strategic targets of
spending plans.
A multi-year schedule (of 15-25 years) of unconstrained funding requirements

should be prepared for each corridor, as well as a multi-year financing plan.
A long-term development and expenditure plan for the national road network,
together with forecasts of key outcome indicators, should be prepared for a range
of funding scenarios.
PPP mechanisms which facilitate substantial public funding contributions

distributed over extended periods such as annuity or lifecycle delivery
mechanisms need to be defined and authorised among the options for delivering
VGF and reducing risk (this would be attractive for investors and lead to more
reliable outcomes).
Managerial and technical capacity in the Planning and Programming Division

(Bipran), DGH should be enhanced for national road development planning using
this framework.
BPJTs managerial and technical capacity should be strengthened to expedite

delivery of a high-capacity expressway network.
The issues raised by this report are far-reaching and have significant implications for
the setting of spending strategies and performance targets for development and
expansion of the national road network in the future.
Road renewal gives improved travel speed and safety and extended
asset life. Coastal Road, Aceh; Photo by Timur Angin
xvii
CHAPTER 1: NEED FOR A NEW APPROACH ON

NATIONAL ROAD NETWORK
DEVELOPMENT
CHAPTER 1: NEED FOR A NEW APPROACH ON NATIONAL

ROAD NETWORK DEVELOPMENT
1.1
FACILITATING INCLUSIVE NATIONAL DEVELOPMENT BY IMPROVED

CONNECTIVITY
Indonesias economic competitiveness

depends to a significant degree on
adequate infrastructure supporting its
connectivity
internally
between
economic centres and externally to its
markets. Growing signs that a lag in the
provision of infrastructure is impinging
on
economic
growth
and
competitiveness therefore are a cause
for concern. Thus the new national plan
for expansion of key economic corridors
(MP3EI) and a call for a dramatic shift in
the way that development of the
national road network is planned and
managed are important matters for
those responsible for funding and
delivering national road infrastructure.
Figure 5: Competitiveness in
Infrastructure Regional Comparison
(a) Road Infrastructure
2011)
indicator
(GCI
Developing Asia
ASEAN
Indonesia
China
Thailand
Malaysia
Singapore
0
2
4
6
GCI - Road Infrastructure Indicator
(b) Access to Expressway Network

Malaysia
China
Indonesias connectivity and logistics

performance
is
deteriorating.
Indonesias trade depends not only on
efficient linkages between sea ports and
airports and its international markets but
also on good land-side connectivity to its
agricultural regions, resource base and
manufacturing centres. The land-side
connectivity
between
port
and
hinterland in East Asia accounts for over
half of the logistics cost for goods bound
for international markets, according to
ADB et al. (2005). The situation appears
to be more critical in Indonesia. The
nations
logistic
performance
deteriorated during the period 2007 to
2011 from an overall rating of 3.01 out of
5 falling to 2.76, according to the World
Banks Logistics Performance Index
(World Bank 2010), with poor
infrastructure a key reason for the
FRAMEWORK FOR PLANNING

DEVELOPMENT OF THE NATIONAL
ROAD NETWORK: EXECUTIVE
REPORT
Philippines
Thailand
Indonesia
INDONESIA
Vietnam
0.2
0.4
0.6
0.8
Expressway Density (km/1000 pop.)
(c) Estimated trip times in main corridors

Vietnam
Indonesia
China
Thailand
Malaysia
0.00
1.00
2.00
Trip time (hr/100 km)
3.00
Sources: (a) Global Competitiveness Indices

(2011); (b) DGH data and World Development
Indicators 2008 analysed by Shimizu, JICA
(2009); (c) IndII study estimates based on
sample bus schedule and road corridor data,
2011.
decline. Indonesia is also falling behind comparable countries in the region such as
Malaysia, Thailand, Philippines and Vietnam that have either maintained or improved
their performance.
Indonesias competitiveness is also being impacted by the availability and quality of
its infrastructure. In ratings of global competitiveness, Indonesias ratings continue to
reflect a lack in the availability and quality of infrastructure, despite recent
improvements due to non-infrastructure factors4, refer to Figure 5. In the region, the
nation, with a score of 3.5 out of 10, ranks below the median of 4.3 for ASEAN
countries and considerably lower than neighbours such as Thailand and Malaysia, as
seen in Figure 5(a). Rapid growth in demand, the low penetration of expressways (1040 percent of the levels in the region (refer to Figure 5(b)), and rising congestion on the
nations highways contribute to poor logistics performance. Indonesia also has to deal
with the additional burden of significant urban congestion, not only in the Jakarta
conurbation but also in the other six metropolitan centres, such as Surabaya and
Medan, where the key airports, seaports and industrial areas are located. As a result,
average travel times in the main corridors, a key factor in transport costs and logistical
competitiveness, appear to be significantly longer than in neighbouring countries, as
seen in Figure 5(c).
In this context, the national master plan for development in key economic corridors is
a crucially important initiative. The MP3EI5, issued by the Coordinating Ministry for
Economic Affairs (CMEA) in May 2011, focuses on strengthening connectivity to
integrate the growth centres and ports in the nations key economic corridors, as
shown in Figure 6. Improved connectivity is fundamental to catalysing development
and to integrate the more remote regions outside Java and Sumatera into the national
economy.
The six identified economic corridors6 are:
Sumatera Banda Aceh to Bandar Lampung with transverse connections to key

centres and to Java
Java Serang linking to Jakarta and Surabaya, and Semarang connecting to

Jogyakarta and Banyuwangi
Kalimantan Pontianak linking to Palangkaraya, Banjarmasin, and Samarinda
Sulawesi Makassar linking to Mamuju, Kendari, Palu, Gorontalo, and Manado
In 2010 Indonesia was ranked at 44th position (out of 133 countries) by the Global
Competitiveness Index (GCI). This was an improvement from 54th position in 2009. But in
terms of infrastructure performance Indonesia was ranked at 82nd position. The index
comprises 12 pillars of which infrastructure is only one.
5
Masterplan Percepatan dan Perluasan Pembangunan Ekonomi Indonesia (MP3EI).
6
Each economic corridor includes smaller sub-corridors where investment in the supporting
roads should also be identified and prioritised. In this report the sub-corridors are considered
to be part of the road corridor.

REPORT

DEVELOPMENT
Bali linking to Nusa Tenggara
Papua Malaku - Merauke linking to Jayapura, Manokwari, Sorong, Sofiti and

Ambon
Figure 6: Priority Economic Corridors Defined in MP3EI Connectivity Strategy
Source: MP3EI, Coordinating Ministry for Economic Affairs (2011)
Public expenditure in the road sector could have stronger linkage to national economic
development goals, and trans-regional connectivity should become a strategic priority
for the DGH. A recent review and study supporting the implementation of a MediumTerm Expenditure Framework (MTEF) and Performance-Based Budgeting (PBB) in the
road sector was undertaken in collaboration between DGH and IndII7. Among a
broader set of recommendations, the review found that the existing approach to
planning and implementing capacity expansion on the national road network was not
delivering a modern high performance network that could meet current and future
needs because it lacked a focus on connectivity and logistical performance. It also
found that funding allocated to road development could be used more efficiently and
effectively with more attention to long-run life-cycle costing. Given the substantial
increase in Government funding, which has increased six-fold in the current RENSTRA
compared with 20058, higher priority should be given to the development of modern
safe highways in the main economic corridors and to support for a trans-regional
network of expressways (tolled or untolled) to provide high speed and safe travel with
limited access.
Expenditure Planning and Performance-based Budgeting in the Directorate-General of

Highways. Indonesia Infrastructure Initiative (IndII), March 2010.
8
From IDR 5.3 trillion in 2005 to an average of IDR 29.6 trillion in the 2010-14 RENSTRA for
DGH.

REPORT
1.2
CURRENT GOVERNMENT INITIATIVES AND OPPORTUNITIES
Focusing on a new framework for network planning is timely especially in the context
of a number of important parallel initiatives, including:
Modernisation of the bureaucracy through new organisational structures,

performance measurement, accountability and remuneration in a governmentwide program (reformasi birokrasi).
New approach to government budgeting through the implementation of the MTEF

in MPW, involving rolling three-year expenditure programs, and PBB, which links
accountability for achieving performance targets to the relevant agencies and work
units9.
Progress in accelerating expressway development. After several years of

renegotiation and restructuring, 24 toll road construction projects that have been
stalled for about ten years are now proceeding. As a result, about 946 km are
under implementation and due to open for operation between 2013 and 2017,
according to present plans. Other new toll road projects are also under
preparation, so the pace of implementation is set to accelerate, as shown in Figure
7. This implies considerable pressure on capacity to manage the delivery process,
to minimise delays and provide adequate financing. Thus it is timely also to
consider the functional role of BPJT and the appropriate administration of the
expressways, in addition to their financing modality.
Land acquisition problems are being overcome. A revolving fund in place since
2007 and the new Law no. 2/201210 on the acquisition of land in the public interest
are addressing the prevailing issues. The law provides for land acquisition for
national roads to be the responsibility of the national rather than local
government, for disclosure and consultation to be completed within 90 days and
for the full process of consultations, business and legal procedures to be
completed within a total of 436 days at the latest. While this will pose challenges, it
is moving in the right direction. Past PPP projects have experienced major
difficulties where the private party was given responsibility for land acquisition but
not control of the process, which resulted in implementation delays or stoppages.
Guidelines on new models for facilitating private sector participation in toll roads,
including PPPs and the provision of public financing, are available but urgently
need to be expanded and demonstrated. The new guidelines recognise the
importance of the risk profile and financial viability of the facility, and provide a
framework for public financial support of those projects which are not viable for
private financing alone. However, suitable mechanisms for the provision of the
IndII support to DGH has assisted the application of MTEF-PBB in the road sector, giving rise to
this and related studies on improving the performance of public expenditures in the road
sector.
10
Law no. 2 of 2012 on Acquisition of Land for Development in the Public Interest and
Presidential Regulation no. 71 of 2012 on the Implementation of Land Acquisition for
Development in the Public Interest

REPORT

DEVELOPMENT
public funding contribution need to be established and utilised because timely

execution of the planned expressway program will depend on it. Public funding
models which place the risk for factors that the private developer cannot control
(such as land, resettlement and revenue) on the government, and which provide
for regular payments (e.g. quarterly) by the government to the developer based on
various criteria, are likely to provide the most stable basis for financing the large
program. As this report will show, successful execution of the planned expressway
program shown in Figure 7 will require government funding of more than 80
percent of the total cost in order to gain strong private sector participation.
Figure 7: Extension of Toll Road Network Historical, Current and Planned Implementation
3500
3000
Total length, km
2500
2000
1500
1000
500
0
1980
1990
Operational
2000
2010
Implementing
2020
2030
Planned
Source: Data from BPJT as of October 2011, chart by IndII assuming 150-200 km/year
delivery of Planned program.
The national road budget has risen steeply, nearly six-fold in the past six years,
leading to an expanded program. The spending rose from IDR 5.3 trillion in 2005 to
IDR 29.8 trillion (AUD 3.2 billion) in 2011, and the economy is growing. Public
funding for development is thus no longer the constraint it used to be, and
provided there is strategic direction to the allocation for investment in network
development, the connectivity goals can be achievable. However, in allocating
almost twice the budget from IDR 16 trillion/year in 2009 to the average of IDR 30
trillion/year for the period 2010-2014, DGH lacked a long-term plan with
connectivity targets and a pipeline of development projects. The allocation of the
majority of the budget (i.e., 63 percent or IDR 19 trillion/year) to road
development was instead based on policies that had only limited strategic focus
and were largely short-term in their impact. The strategic elements included, for
example, the widening of existing roads in trunk road corridors, and improving
strategic roads (non-national roads being reclassified) in remote and underdeveloped areas. However much of the funding was widely dispersed for minor
and incremental widening of other national roads to normative width standards
without optimising long-term requirements. The policies delivered short-term and
marginal improvements rather than long-term substantial improvements to
capacity and connectivity.
Preparation of the next RENSTRA during 2013-14 provides the opportunity for
adjusting the strategic focus of spending on national roads and its linkage to

REPORT
connectivity. Preparation of the 2015-19 RENSTRA by DGH begins in January 2013.

The RENSTRA establishes the medium-term strategic priorities for the sector and
the allocation of funding across the five-year period. This is the third period of four
within the long-term period 2005-2024 and is crucial for converging on the longterm goals for connectivity and capacity development of the road network.
1.3
SHAPING THE NATIONAL ROAD NETWORK TO SUPPORT ECONOMIC GOALS

AND GROWTH
What type and shape of the national road network is required to support economic
goals and growth? A backbone network of modern highways is considered essential
to facilitate reliable, safe and fast regional connectivity. This backbone network would
comprise limited access expressways where traffic demand is high, and safe high-speed
highways in other trunk road corridors where expressways will become justified only in
the longer term. To make logistics costs competitive, the network would need to
provide safe reliable journey times in the order of 1.0-1.5 hours/100 km (equivalent to
average speeds over 60 km/hour up to 100 km/hour), compared with the current
levels of 2.5-4.0 hours/100 km. Moreover, the backbone network needs to be
supported by a well structured network of arterial and collector roads with modern
road standards that support efficient distribution of traffic and that connect the
expressway network to manufacturing centres and local markets and land use
activities.
The spatial aspect of major economic infrastructure is a crucial element of planning
that requires a long-term horizon. The location of infrastructure assets such as
highways and expressways is essentially permanent and the structures themselves
have a long economic life of 25 to 50 years, with appropriate asset management. This
spatial element has a significant
influence on the environmental and
social
impacts
of
physical
infrastructure, as well as on the
development of economic activity
and land use. Thus a long-range
vision of 50 years or more is
appropriate when planning the
layout of the network and the
corridor space that is, if the
support to spatial development is
to be constructive and if the
Ambarawa bypass avoids conflict with urban
disruption to land-use activities is
settlements. Courtesy of DGH.
to be minimised. Any decisions on
medium-term expenditures (e.g.,
five years) therefore need to be
optimised and prioritised firmly in the context of long-term plans extending over at
least 25 years and within a vision that extends to 50 years and beyond. This implies

REPORT

DEVELOPMENT
significant changes to the present approach to the planning of national road

development.
1.4
INDII STUDY ON ROAD NETWORK PLANNING
Following the review of expenditure budgeting and performance for national roads in
DGH (IndII 2010), which highlighted this connectivity and planning issue, IndII
supported a more detailed study in 2010-2011 to identify practical steps for improving
the planning of road network development. The study is documented in a series of
reports (IndII 2011).
The key objective of the study was to demonstrate how national connectivity and
mobility goals, supporting national economic imperatives and improved regional
accessibility, could be incorporated in the long-term and medium-term planning
processes of DGH.
1.4.1 Approach and Results

The study has approached the development of the national road network in Indonesia
from the viewpoints of first, an efficient and effective use of public funds, and second,
of defining the connectivity objectives by measurable outcomes - such as travel times
and other indicators - that can be used to monitor the achievement of development
goals and the effectiveness of public expenditure. The approach in the study was
generally analytical and used the findings of previous studies and the considerable
knowledge and expertise of Government officers and local and international
consultants.
The intention was to provide and demonstrate a basis for upgrading the DGH
procedures for the strategic planning of capital investment and the preparation of
long-term and medium-term expenditure programs that have a clear and measurable
linkage to national economic development goals and targets for development of the
national road network.
The result of the study has been the preparation of a long-term strategic framework to
guide the development of national expressways and highways for the next 20 years,
set in the context of a 50 year vision11.
The strategic framework would be implemented via practical mechanisms including:
11
In practical terms, this horizon needs to be adjusted to conform to the Governments present
long-term plan (RPJP) which is a 20-year plan running from 2005 to 2024, and the subsequent
long-term period 2025-2044.

REPORT
Comprehensive plans on a corridor basis in order to develop a pipeline of projects

to guide long term forecasts of investment needs.
Multi-year expenditure planning based on the forecasts of investment needs.
Targeted support on road network development to DGH and Badan Pengatur Jalan
Tol (BPJT, the Toll Road Regulatory Agency) to plan and implement this framework
for expressways and arterial roads, and resulting in improved planning and
programming in the short term.
Development of an Action Plan of key initiatives to be implemented in the next five

years with indicative directions beyond that (up to 10 years).
1.5
THIS REPORT
This report looks first in more detail at the challenges facing improvements to national
connectivity and at the issues relating to improving the planning of road development,
including the funding, programming and design of road network capacity
improvements.
The report then presents (in Chapter 4:) the proposed new framework for planning the
development of the national arterial road network, including the expressway network,
to meet the connectivity goals and forecast economic growth in traffic demand. This
leads into a proposed program of support for DGH and BPJT to build capacity for
meeting this accelerated demand for network development. In particular, it includes
the basis for preparing a long-term financing strategy to support the rapid
development of the network, drawing on both expanded public funds and private
sector investment. It demonstrates the forecasting of funding requirements, including
private sector resources, and how these link to the outcomes and performance
expected for the network.

REPORT
CHAPTER 2: CHALLENGE FOR NATIONAL

CONNECTIVITY
CHAPTER 2: CHALLENGE FOR NATIONAL CONNECTIVITY

2.1
CONTEXT
At present road transport dominates Indonesias land transport modes by carrying

over 70 percent of freight tonne-km and 82 percent of passenger-km (World Bank
2011). The remaining passenger and freight task is accounted for by air services, interisland shipping and inland waterway transport and rail. Air travel has a significant role
for enabling essential access to remote parts of the country. Water transport for interisland freight and passenger movement is critical for national integration. Each of the
major islands has at least one significant port. Inland waterways are limited to certain
areas of Eastern Sumatera and Kalimantan (World Bank 2011).
Four unconnected railway networks totalling 5,040 km of mainly single track (1,067
mm gauge) in Java and Sumatera primarily transport bulk commodities and longdistance passenger traffic. The Java rail network of 3,070 km contributes about 75
percent of the Indonesian Railways revenues, with passenger transport accounting for
83 percent of the total (World Bank 2011). Rails potential is constrained by inadequate
infrastructure and limited markets in which it is competitive. Dedicated rail will be
needed for key resource developments but would be developed as dictated by
commercial considerations. While rail is likely to be operating below its potential,
efficient roads and road transport services will be critical to improving national
connectivity.
Demand for road transport is high and is likely to continue to rise rapidly. The
demand for road transport is rising rapidly, with the vehicle fleet doubling from 41 to
81 million vehicles during the five year period 2004 to 2009. Within this there has been
sharp growth in motorcycle usage, with the motorcycle fleet growing by 130 percent
during 2004 to 2009 to reach 60 million which is more than twice the growth rate (56
percent) and three times the volume (21 million) of the balance of the motor vehicle
fleet (IndII, 2010). With current motorisation still low at only 70 vehicles12 per 1,000
persons, and an average per capita income of around USD 2,700, growth in the vehicle
fleet and road travel can be expected to continue at a pace in the vicinity of 10 percent
per year (IndII, 2010).
The total length of the Indonesian road system was 372,000 kilometres in 2009 and
consisted of: 35,000 km of national roads; 688 km of toll roads; 49,000 km of provincial
roads; 264,000 km of district roads; and 23,000 km of urban roads (IndII, 2010). Box 1:
Current Road Classification defines the current road classification. Through the public
expenditure program 2010-2014, the capacity of the national road network is being
expanded by about 4,000 lane-km/year from a level of 85,000 lane-km at the end of
2009, equivalent to an average of nearly 5 percent/year. Moreover, the national road
12
280 vehicles per capita if two wheelers are included.

REPORT
network is being extended at a rate of about 1,600 km/year, through the addition of
strategic roads and reclassification of sub-national roads.
Travel on the national road network has been constrained by terrain and land use.
About one third of total road vehicle travel is made on the national road network,
which DGH estimates to be growing by about 6 percent per year with a 2010 level of
about 80 billion vehicles-km per year. Road travel speeds however remain slow due to
generally low-speed road geometry standards that are characteristic of the generally
hilly terrain, and to generally high levels of side friction arising from extensive ribbon
development and weak controls on land use (IndII, 2010). Road surface standards are
fairly high on national arterial roads, with 90 percent paved and about 86 percent
reported to be in good or fair condition. However the rate of deterioration is high,
especially in the heavily trafficked corridors.
Box 1. Current Road Classification
Article 7 of Law no. 38/2004 defines three basic road categories: (i) public roads; (ii) special
roads (individual/private/dedicated roads); and (iii) toll roads. Public roads are divided into
Primary and Secondary roads. Primary roads are further classified by function into: arterials and
collectors (with sub-categories K1, K2, K3 which are primarily administrative), and primary local
(District roads). Secondary roads are local and neighbourhood roads in urban areas.
Primary roads are defined as linking big cities, medium cities and towns. A primary arterial road
connects PKNs (National Activity Centre) to each other, connects between PKN and PKW
(Regional Activity Centres), and links to airports and Airport Distribution Centres. The primary
collector road network (K1), also part of the national road network, connects PKW and PKL
(Local Activity Centres).
The arterial and collector (K1) roads are the responsibilities of national government agencies.
The K2 and K3 classified roads are generally the responsibility of provincial governments, except
when they are identified in the national strategic plan (5 year RENSTRA) as strategic roads in
which case they are eligible for national government funding. Thus some K2 and K3 classified
roads might be the responsibility of both the national and provincial governments.
Some provinces have defined some K2 and K3 collectors as strategic roads, even though the
roads are not included in the RENSTRA, and by ministerial decree those receive national funding
only after national needs have been fully met.
Source: IndII (2011), Deliverable 2: Current State of Network Planning.
Road safety risks are high, especially for motorcycles. Along with increasing
motorisation, Indonesia is experiencing a serious road safety problem with over 30,000
fatalities occurring annually, and an estimated level of injury above 1,000,000 annually
(Eric Howard and Associates, 2008)13. Fatality rates per 10,000 vehicles in 2004 were
eight times higher in Indonesia than in Australia, and more than twice the level in
Malaysia, an ASEAN good practice road safety neighbour. A high 60-70 percent of the
fatalities involve motorcycles, followed by pedestrians. Continued sharp growth in
13
10
Updated by official statistics and analysis of Indonesian National Police Traffic Corps crash
data, which show 31,234 fatalities in 2010.

REPORT

CONNECTIVITY
motorcycle ownership rates is likely to increase fatality and injury rates further (Eric
Howard and Associates, 2008).
Access to roads and transport services in remote areas warrants investment on social
grounds. It is estimated that 17 million people living in remote communities remain
without direct access to the road network or all-weather roads (World Bank 2011).
Currently, over 40 percent of the nations population lives outside of Java and steady
investment to improve inter-island shipping services and sea ports, air services and
airports, and the road systems in remote regions is needed. Lower traffic demand in
remote areas and outer islands will require investments to be made more on social
than economic grounds.
2.2
STRATEGIC CHALLENGES
Several key strategic challenges have been identified based on the analysis of IndII
(2010) and IndII (2011). These are discussed below.
2.2.1 Poor Trans-Regional and Metropolitan Travel Connectivity

The nations economy is being constrained by the inadequate quality and reliability of
land transport infrastructure and services. Most long distance travel is performed on
national roads that are barely able to cope with the current traffic levels. Inter-regional
travel times are generally slow, and due to congestion, journey times often vary
significantly.
Current vehicular travel is concentrated in the six metropolitan cities and smaller
regional cities. These cities are growing at population rates of two to three percent per
annum and vehicle registration rates of over six percent per annum. With a backlog of
road and public transport infrastructure and services, urban development is sprawling,
reducing city productivity and spilling over to neighbouring sub-regions. Traffic use is
concentrated on national roads due to the absence of supporting local road hierarchies
and this in turn gives rise to excessive congestion on the highways in the vicinity of
towns and cities.
Travel speeds on national arterial roads are slow, both across regions and within
cities. In 2005 the average travel speed on the national arterial road network was
estimated to be about 40 km/hour14. The average travel speed on urban arterial roads
was significantly lower at about 30 km/hour in metropolitan cities and 35 km/hour in
other cities. In Jakarta in recent years the average peak hour travel speed on its arterial
road network was estimated to be around 23 km/hour (IndII, 2011) but can be
substantially lower in some segments.
14
DGH estimates have generally been based on theoretical calculations.

REPORT
11
Surging economic activity and mixed traffic are straining infrastructure capacity and
have adverse impacts in urban areas. NH14 Semarang. Photos by Phillip Jordan
Current estimates of connectivity in the main economic corridors indicate trip times
ranging from 2.5 to 3.2 hours/100 km for road travel and rising to 5.0 hours/100 km or
more in corridors involving nautical links in the eastern regions, as shown in Figure 8.
These can be compared with the service levels of a modern highway network in the
order of 1 to 1.5 hours/100 km for road travel.
Field data on actual travel times are not readily available. In the absence of
standardised travel time surveys, this evidence on corridor performance has been
developed from bus travel data and other estimates of end-to-end travel times in the
nations economic corridors, as
shown in Table 1. Where
Figure 8: Normalised Trip Times Estimated for
appropriate, the corridor trip data
Six Economic Corridors, 2012
incorporates travel on existing
expressway segments. The data
Trip time hr/100 km*
0.0
1.0
2.0
3.0
4.0
5.0
6.0
show that in the primary trunk road
Trans-Sumatra
corridors where there has been
Trans-Java
substantial widening, such as north
Target service levels
1 - 2 hr/100 km
Kalimantan
Java and east Sumatera, average
Sulawesi
travel speeds of up to 50 km/hour
are being achieved. In other arterial
Bali-NTT
road corridors, the average travel
Papua-Maluku
speeds are in the order of 40
Road Trip Time
Nautical Add-on
km/hour. Elsewhere where recent
field data are not available, an
Source: Study estimates based on Table 1 data
average travel speed of 40 km/hour
and point-point corridor distances.
has been assumed15.
15
12
Systematic travel surveys are planned in 2013 to determine actual trip times in the economic
corridors and to establish a baseline for planning and monitoring in the future.

REPORT

CONNECTIVITY
Table 1. Current Low Connectivity in Economic Corridors

Corridor
Key Centres
Economic Activities
Corridor Road Travel Times

and Distances
Sumatera
Bandah Aceh, Medan,

Pekanbaru, Jambi,
Palembang, Tanjungpinang and others
Palm Oil, Rubber,

Coal, Shipping, Steel
Banda Aceh-MedanPekanbaru-Jambi-PalembangBandar Lampung 54 hour

(2,741 km)
Java
Jakarta, Bandung,
Semarang, Yogyakarta,
Surabaya
Food and Beverage,

Textiles, Transportation
Equipment, Shipping,
ICT
Merak-Jakarta-CirebonSemarang-SurabayaKetapang 26 hour (1,341

km)
Kalimantan
Pontianak, Palangkaraya,
Banjarmasin, Samarinda
Oil and Gas, Coal,

Pam Oil, Steel,
Bauxite, Timber
Pontianak-PalangkarayaBanjarmasin-Samarinda 83
hour (3,316 km)
Sulawesi
Makassar, Kendari,
Mamuju, Palu, Gorontalo,
Manado
Agriculture, Minerals,
Oil and Gas, Fishing
Makassar-Palu-GorontaloManado 51 hour (2,028 km)
Bali Nusa
Tenggara
Denpasar, Lombok,
Kupang, Mataram
Tourism, Fishing,
Animal Husbandry
Bali-Lombok-SumbawaFlores-Timor 44 hour (1,744

km) (road portion only)
Papua -
Kepulauan
Maluku
Sofifi, Ambon, Sorong,

Manokwari, Timika,
Jayapura, Merauke
Agriculture, Minerals,
Oil and Gas, Fishing
Sorong-Manokwari 15 hour
(607 km); ManokwariJayapura-Merauke not
connected; Sofifi-AmbonSorong ferry travel.
Sources: Coordinating Ministry for Economic Affairs (2011) for left hand three columns. Corridor
road distances from DGH 2011. Travel times for Java north and Sumatera east corridors are
derived from daily bus services and equate to about 50 km/hour average speed, other corridor
times are estimated based on 40 km/hour average speed; ferry travel between islands is
excluded (IndII October 2011).
This means that end-to-end travel times by road in most corridors are around two to
three days whereas in comparable nations in South East Asia, such as Thailand and
Malaysia where average highway speeds are around 80 to 90 km/hour, key corridors
can be traversed by car in less than one day. In eastern Indonesia, as this concept is
developed further, corridor travel times will need to include ferry travel between
islands (i.e., based on a nautical highway corridor), and in Papua some economic
centres are not yet connected by national road.
The expressway function is defined by a toll roads classification and not focused on
the economics and functions of connectivity and the efficient movement of goods and
people. Although expressways, with limited access and high capacity, were identified

REPORT
13
as a critical requirement to improve connectivity by IndII (2010), they are not defined
as a separate road category under Article 7 of Law no. 38/2004 or even as a class of
Public Road. Instead the road law defines toll roads as one of the three categories of
road based on their revenue-raising character. Toll roads have the same functional
characteristics as expressways and are classified as national roads; however the focus
of their definition and control is on the revenue aspect: they are generally privately
financed, and their administration falls under a separate agency, BPJT. This distinction
has proved to be an impediment to the formulation of coherent planning and
management of a high-standard, limited access expressway network that could serve
as the backbone of regional connectivity. While it is likely that most of an expressway
network would be tolled, the value of a functional classification is paramount for
spatial and transport planning, and is essential for identifying the substantial
differences in performance and impact on connectivity that result from various
functional standards. The financing arrangements should be handled separately and
should not dictate the functional classification.
This focus on the toll road modality has also led to a fragmented development of the
expressway function in the network, which has been based on the financial viability of
individual segments for private sector financing. While a long-range toll road plan
existed for the key corridors of Java and Sumatera, implementation difficulties
relating to land acquisition, risk allocation and the viability of concessionaires
resulted in major delays over the past decade which are only now being overcome.
These delays created congested conditions on critical segments of the national
network and led to alternative interventions by DGH to widen existing arterial roads on
their existing alignment in the trunk road corridors. These incremental improvements
were implemented with high costs of land acquisition and construction, but relatively
low returns in the benefits of road capacity and improved travel speeds, for example at
the margin from 40 to only 50 km/hour instead of much higher average travel speeds.
In conclusion, there has been an inadequate focus in the recent road development
programs on inter-regional connectivity, on the urgent need for the creation of a
backbone network of expressways, and on the need for improving both traffic capacity
and travel times on the arterial road corridors.
2.2.2 Investment Planning and Programming Processes Can be Improved

IndII (2010) found that the existing planning process for road network development
had considerable room for improvement in its effectiveness and efficiency. The
linkages between national long-term planning goals such as connectivity and sectorlevel budget priorities for road development were not very evident and lacked relevant
measures of performance and accountability. Current processes that shape the
expenditure programs lack long-term effectiveness in addressing traffic demand and
tend to be normative and to result in inefficient use of funds. Moreover, translating
these programs into projects has been affected by constraints on technical standards,
budgeting and implementation capacity.
14

REPORT

CONNECTIVITY
The linkages between Long-term Development Goals and Expenditure Planning have
not been fully effective, lacking a focus on connectivity and the functional
performance of the road network. Although the long-term plans (RPJP) and spatial
plans have identified key centres of economic growth over the past decade or more,
these do not appear to have been translated into specific road development and
capital investment plans in the medium-term plans (RENSTRA) or the annual
expenditure plans. Although some planning of arterial road development was made in
DGH, the studies tended to be fragmented and did not result in the publication of
comprehensive plans for the development of links in the ASEAN highway network or
for a national expressway network. As a result, the development of both these key
drivers of connectivity has suffered from a lack of priority and visibility in recent five
year plans. For example, the five year RENSTRA plans have not cited performance
objectives in terms of improved connectivity and travel times for the ASEAN highway
corridors, or indeed for other trunk road corridors.
The existing incremental and normative approach to planning capacity expansion
does not fully address long-term traffic demand and functional performance, and
leads to an inefficient use of capital investment funds. The current paradigm supports
incremental widening (usually in narrow strips less than 0.6 m wide on each side)
where roads are of substandard width or congested. However, with weak strength and
without effective means for improving alignment or of limiting access, the benefits are
rapidly overtaken by attracted roadside activity, growth in traffic and surface damage.
Furthermore, the cost of incremental widening is high. At IDR 2 to 3 billion (AUD
250,000 to AUD 350,000) per kilometre, the cost is only 30 percent less than the cost
of full reconstruction which confers substantially higher benefits of longer life and
lower annualised costs.
The development focus in the past and current DGH RENSTRAs has been on this
incremental approach - improving roads to defined width standards (road width and
number of lanes), based on administrative classification and corridor status. However,
by aiming for broad coverage within a short period, the funds have been widely
dispersed and used inefficiently, delivering a marginal improvement that requires
repeated investment within a short timeframe. A long-term approach - which is more
effective in terms of development and connectivity and more efficient in terms of use
of investment funds would take account of the long-term traffic demand, the speed
required for connectivity and the safety environment, and also a wider range of
options including improvement of the road alignment, sight lines and shoulders - as
part of a comprehensive design to improve capacity and safety.
The expanding availability of public funding provides an opportunity for improving
connectivity and modernising the national road network, provided that capital
investment is given high priority in medium-term expenditure plans and that
planning processes are improved. When the budget envelope was tripled from the
previous RENSTRA to the current one, the investment in road development received a
smaller increase in allocation than the spending on road preservation. Lacking a
strategy of investing in road renewal which would reduce annualised expenditure on
road preservation at the same time as increasing travel benefits the additional

REPORT
15
funding was instead allocated to higher (and inefficient) spending on maintenance and
rehabilitation with only marginal benefits in vehicle travel costs.
The strategic planning processes in DGH now need to be modified to improve the
prioritisation of investments between road development and road preservation. The
current planning tool, the Indonesian Road Management System (IRMS) for example,
needs upgrading in data and capability for assessing the benefits of improvements to
the network and traffic flow and of extended asset life. Multi-year budgeting under
MTEF gives the opportunity of supporting a substantial investment program of
progressive upgrading and renewal of the road system. However this needs to be
integrated with related savings in road preservation so as to produce a funding
strategy which is optimal in the long-term instead of short-term.
Such challenges call for a change in the way of doing business in the planning of road
development and prioritisation of road expenditures. A strategic framework would
provide a long-term focus for investment in road infrastructure and balance the
demands of economic and social development with the constraints of land use and
social impacts. The planning process would generate design standards that are longer
lasting and achieve lower annualised investment costs in the long-term, requiring
better data and better analytical tools. These would enable a stronger and more
transparent linkage between strategic development goals, expenditure plans and
outcomes and thereby would gain stronger political and community support.
2.2.3 Narrow Financing Base

The fiscal capacity of government for funding public infrastructure in general is
limited. For the 20102014 period, Bappenas estimates that the budget needs for
infrastructure development are about IDR 1,786 trillion (of which about IDR 339 trillion
is for roads), compared with a fiscal capacity of central Government estimated to be
around IDR 1,010* trillion. If the infrastructure needs are to be met, the gap of IDR
419* trillion would need to be funded from other sources.
Better mobilising of private sector finance, which has been slower than expected over
the past ten years, is being addressed through new forms of PPP which better address
the allocation of risk and the implementation delays. But it also comes at a higher cost
to the consumer. Broadening and deepening of available domestic revenue sources
should also be considered. Annuity or life-cycle models which channel public funding
to public-private projects spread the supply of funding, ease the raising of private
sector investment, reduce the risks and thus the costs, and ultimately will greatly
accelerate delivery of the program. Reduction of the large fuel subsidy, which in 2011
accounted for nearly 20 percent of government expenditure, continues to be a highly
progressive and desirable option but needs careful handling of the significant social
and political implications.
16

REPORT

CONNECTIVITY
2.2.4 Increasing Adverse Consequences of Road Use

Inadequate regulation and enforcement of freight vehicle traffic, and inadequate
safety control of the road environment, are compounding the adverse impacts of
traffic growth. While the shipment of goods by road has proved to be more efficient
for producers than alternative
modes such as rail or coastal
shipping, the high growth in heavy
truck
movement
has
been
accompanied
by
excessive
overloading, high safety risks and
excessive emissions which are
imposing higher costs on the road
owner as well as higher external
costs on society. Inadequate
regulation of heavy vehicle
dimensions, such as length and axle
Over-sized loads and weak shoulders shorten
configuration,
and
weak
asset life and pose safety hazards. Jambi
enforcement of load limits are
bypass. Photo by Phillip Jordan
resulting in an extremely high
incidence of truck overloading
which reaches about 100 percent in
the Java northern corridor and 40 percent in Sumatera of all heavy vehicles. This
accelerates the deterioration of the road condition, incurs high demand for road
rehabilitation and leads to an inefficiently high annualised expenditure requirement to
maintain the road in serviceable condition (IndII 2010).
The external social costs are also substantial. The truck fleet is aged and a high emitter
of the fine particulates and noxious gases which are harmful to human health.
Moreover, overloaded and old or modified vehicles tend to be under-powered for their
task which increases the risk of
breakdowns and causes speed
fluctuations that both increase the
risk of accidents. Significant traffic
conflicts occur in the vicinity of
towns and villages where national
roads are often used for pedestrian
movement and local traffic, as well
as long-distance traffic. Inadequate
planning
control
over
strip
development
and
roadside
activities,
and
inadequate
Renewal needs to reduce hazards and
separation of local and through
manage roadside activities, West Corridor,
traffic, create an unsafe and
Sulawesi. Courtesy of DGH
congested road environment which
increases both traffic delays and
safety risks.

REPORT
17
2.2.5 Organisational Capacity Improving Slowly

Within the Ministry of Public Works, the planning of all national highways including
expressways, arterials and collectors is the responsibility of DGH, while the delivery
and oversight of toll roads is the responsibility of BPJT. Since an internal reorganisation
of DGH in early 2011, the planning of expressways has moved from its previous home
under urban road development to Bipran, where it is now part of the division
responsible for planning national highways and road programs. However the capacity
for high-level network planning is low, both within DGH and the local private sector,
especially in capability for conducting network analysis and comprehensive financial
analysis for examining options for expressway development. Thus there is a need for
substantial strengthening in the quality of long-term network planning for expressways
and arterial highways.
There is also need for a substantial upgrade of the primary national road database and
planning tool - the Indonesian Road Management System (IRMS) which still lacks the
geometric and image data needed for a proper analysis of the range of improvements
to curvature, sight distance and alignment16 that must be considered for long-term
investments in road capacity. Field measurements of trip time are also missing, so the
reporting of connectivity-related performance indicators is not possible or reliable.
BPJT also has low staffing levels, especially with the technical qualifications needed for
preparing and evaluating packages with significant financial engineering aspects. More
qualified staff members are needed for the larger task17 that is emerging and
secondments have been made over the past two years to assist with the acceleration
in the release of expressway packages for execution.
Land acquisition is a key constraint to expressway development in particular and to
geometric improvements on national roads as well. While the new Law no. 2/2012 and
Perpres 71/2012 regulations bring crucial improvements, the administration and
execution of land acquisition remains a complex and demanding task. The capacity of
the BPJT unit which has Badan Layanan Umum or General Service Agency (BLU) status
and the capacity of DGH to handle a greatly increased workload with greater efficiency
urgently need improvement. One possibility that has been mooted is for a single unit,
such as the BLU unit in BPJT, to be expanded to handle all land acquisition.
While the overall capacity of DGH and BPJT is improving gradually, the institutions
need more strategic focus and a more substantial gearing up of resources to be able to
handle the huge task ahead. Significant improvements are needed in the organisation
and capability of the planning units, as well as upgrading of staff qualifications and
planning tools.
16
Full geometric and roadway imaging data, as well as basic road condition and traffic data,
were included in IRMS from about 2001 when automated road surveys were conducted
under a country-wide contract intended to be updated at 5-yearly intervals. However, these
data were not transferred when the location referencing system was changed in 2010.
17
For example, to support progress with implementation of the stalled toll road concessions.
18

REPORT
CHAPTER 3: DEVELOPMENTAL NEEDS

The developmental needs to address these strategic challenges for planning road
network development fall into three areas:
A planning framework for determining the substantial improvements and

investments in national road infrastructure needed over a medium to long-term
period to support economic growth and social development in line with national
development goals.
The planning policies and processes needed to support production of the national
road network development plan.
The organisational capacity to undertake the improved planning processes and

produce the plans.
These developmental needs are explained in more detail below.
3.1
PLANNING FRAMEWORK FOR ROAD NETWORK DEVELOPMENT
3.1.1 Improving Trans-Regional and Intra-island Connectivity

Improving connectivity to support the economic and social development goals and to
meet the projected rising inter-urban demand will require a high-capacity transregional road network of expressways the backbone network referred to in section
1.3 as well as improvements to the supporting arterial and collector road network.
Planning this major network development and investment program requires a
framework which will guide decisions on the infrastructure and the capital expenditure
needed to achieve the desired connectivity and to set appropriate targets in the
national development plans. The framework would need to define the hierarchical
road functions for the very long term (for example 50 years) to provide certainty to
planners, investors and the community.
The framework should also define key principles, policies, standards and
methodologies that can be applied nation-wide. Through a focus on function the
appropriate standard of road development for each region in each economic corridor
would match the local needs and growth path and would align with regional
development policy.
The planning framework will need to address the following issues raised by the
strategic challenges:
In building a backbone network how should investment in new expressways be

planned in relation to improvement of the arterial road network, especially in the
trunk road and key economic corridors? The plan should optimise the road

REPORT
19
capacity required, while avoiding duplication of investment or conflict of function.

The location, footprint and linkages of the expressways and arterial roads will
impact accessibility, land use and development cost. The plan should optimise the
use of investment capital, delivering the connectivity outcome with the least cost
to the road user and taxpayer.
20
A substantial network of limited access expressways will be needed to achieve a

high standard of connectivity in high traffic corridors. Whether this network is
contiguous node to node or intermittent, there is a need to have expressway
defined in the Road Law as a class of public primary road alongside arterial and
collector, based on functional standard. This change will shift the focus to the
functional performance required of the facility instead of a focus on the private
sector involvement and financing.
How should a long timeframe of up to 50 years, appropriate for providing major

road infrastructure, be incorporated into the planning process? Given the complex
and uncertain factors involved in long-term forecasting, the framework needs to
address the implications for designating and reserving land in future corridors,
public consultation, and linkage to economic development plans.
How can the framework be used to establish the linkage between economic
development goals, connectivity targets and the investment plan? If the national
development goals are used to drive the program by setting targets for achieving
connectivity and a continuous network, this will have a significant effect on the
economic and financial feasibility of projects and the demand for investment
capital.
The planning framework should help identify the segments of the network and
the amount of investment that is viable and attractive for the private sector,
within the overall resource envelopes associated with different development
options and for a range of public-private financing models.
In less developed areas, the framework should guide the strategic decision on
when development in a road corridor should improve on an existing alignment or
when it is appropriate to supplement or replace that with the development of a
facility in a new location and alignment that is optimal for the long-term. Where
traffic demand is relatively low the development of arterial roads to modern
highway standards is likely to satisfy demand and connectivity for at least the
medium-term. In some cases, a staging strategy that locates the modern highway
on a separate alignment designated for a future expressway in a long-term plan
may be appropriate.
Policy guidance is also needed on several additional related issues. For example,
should land be acquired for the ultimate cross section? Should all expressways be
tolled? New and appropriate technical standards may be needed - such as design
axle loading - if heavy truck overloading is expected to be a continuing problem.
Since official policy is for the provision of a non-tolled alternative to toll roads,
standards may also include guidance on what constitutes an acceptable free
alternative route by taking into account the local land use arrangement, travel
patterns and travel times.

REPORT
The framework should also address the next level of road (for example collector
whether national or local) feeding the backbone network, where their performance
(or shortcomings) would have an impact on the efficient performance of either the
backbone (trunk or expressway) network or the arterial network.
Alignments should be selected to minimise social and environmental impacts in

the long term: (a) Nagreg, West Java; (b) Western Corridor, Sulawesi. Courtesy
of DGH
3.1.2 Improving Metropolitan Urban Mobility

There is a strong demand for high mobility in metropolitan areas to accommodate both
significant urban freight and passenger commuter travel. While transport planning
priorities in urban areas include the development of rapid transit networks and public
transport services to provide an alternative to car travel, the demand for urban
expressways to provide road connectivity within the city and to the external backbone
network is still high and an indispensable and essential complement to other transport
solutions. Thus the planning of urban road and expressway infrastructure needs to be
part of an integrated and comprehensive plan for metropolitan transport,
development and land use. Moreover, urban area road networks need their own
hierarchical system to ensure that they support urban traffic movements without
undue dependence or impact on the national arterial road function.

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21
3.1.3 Input to MTEF and RENSTRA

For budget planning, the framework
projects for the rolling three to five
year medium-term program that
will support the annual budget and
program preparation, and be tied to
key outcome performance targets
such as total vehicle travel or trip
times. The framework should also
help to identify the forward
capacity needs in road corridors and
forward investment needs in five,
10 and 20 year periods. These
longer term forecasts would form
the basis for preparation of the five
year RENSTRA plans with a
demonstrated
linkage
to
connectivity and other performance
targets.
3.2
should help to identify a pipeline of specific
Divided carriageway improves traffic flow

and safety but reaches capacity limits.
Pantura, Central Java. Photo by Phillip
Jordan.
IMPROVEMENTS TO PLANNING PROCESSES AND POLICIES
In order to support the planning framework, the current planning policy and processes
would need to be strengthened to handle the following:
22
Definition of connectivity indicators, measurement and reporting of trip time.
Data on road geometry, traffic, side-friction and accidents, as well as analytical

models, to support estimation of trip times and evaluation of capacity
improvements.
Network analysis to evaluate diversion of traffic.
Methodology for making long-term demand forecasts and analysis of options,

taking account of economic and social development factors and plans.
Capability of generating budget forecasts from pipeline data.
Model for estimating private sector financing and VGF options for potential project
packages.
A policy on full renewal and modernisation of existing national roads to modern

standards of cross-section, alignment and strength, including provision for
constraining expenditures on the road prior to renewal.

REPORT
3.3
ORGANISATIONAL CAPACITY NEEDS
3.3.1 Strengthening DGH Planning

The increased focus on inter-urban and urban expressway networks, arterial network
planning and forward investment programming will place additional demands on DGH,
and Bipran in particular. With the appropriate outsourcing of specialist services, Bipran
will need capacity for handling corridor analysis and long-term demand forecasting,
evaluating a range of investment and capacity improvement options, evaluating
alternative financing modalities, undertaking pre-feasibility studies and preparing
medium- and long-term pipelines of development projects. Bipran would also lead the
definition of the expressway classification and identification of the expressway
network, to be based on functional needs and not on financing.
3.3.2 Strengthening BPJT Feasibility and Delivery Functions

Additional capacity is needed to help BPJT provide timely processing of the current
large pipeline of new toll road projects and to oversee their implementation. The
financing modality of projects should be evaluated and determined by BPJT during the
business case stage of project preparation in order to improve project bankability and
the success rate of going to the market for investors. The need for BPJT to focus on
expressway development would require a change in scope of BPJTs responsibilities to
deal with an expressway network rather than just toll roads, even though in practice
the business would comprise primarily tolled facilities.
3.3.3 Enhancing Supporting Policies and Mechanisms

Careful thought, analysis and consultation will be needed to develop appropriate
policies and mechanisms to complement the new approach to planning of the national
arterial network set out in this report. These policies and mechanisms could cover the
following:
Mobilisation of private sector finance Methods for building private sector

confidence in current toll road plans are needed. New methods of concessioning
need to be considered, including those which allow long-term periodic funding to
bridge the viability gap. For example, models such as an availability-based or
performance-based payment structure and annuity or lifecycle type, which allow
periodic payments by the government to the concessionaire would be appropriate
in situations where toll revenues are insufficient to ensure a projects financial
viability or where tolls may be omitted.
Land acquisition Even though the improved legal provisions on land acquisition
are now in effect, the new provisions alone may not solve all problems concerning
land acquisition. Even if acquiring the land in advance for a future ultimate
roadway is permitted, use of the land in the interim could create difficulties in the

REPORT
23
future. Leasing the land for temporary use may not be the solution if, through long
term use, the residents acquire a legal or perceived right for continued occupation:
physical barriers to prevent access may need to be maintained and trespass
prohibited. Further, adequate and continuous disclosure to the public would
always be needed to ensure local communities were well aware that the land in
question is designated for future road development.
24
More stringent right-of-way management This is needed to separate existing

settlements from the roadway with a safety zone and to direct induced
development to appropriately serviced areas.
Increasing requirements for sound management of environmental and social

safeguards These are needed where road improvement requires widening,
realignment or relocation.
Mechanisms to incentivise cities and regencies These are needed to plan

hierarchical urban area networks as a whole and to complement national road
networks.
Improved management of overloading, hazardous loads, and over-sized vehicles

This is necessary to avoid adverse environmental impact and undue road damage.
Similarly, the safety and emissions performance of new and in-use vehicles will
require closer scrutiny. Road design standards for capacity, access and safety would
require review and upgrading.
Greater attention to traffic management along highways and in urban areas

This is necessary for efficient use of road capacity and for road safety in the face of
rapidly increasing traffic.

REPORT
CHAPTER 4: PROPOSED FRAMEWORK FOR

PLANNING DEVELOPMENT OF THE
CHAPTER 4: PROPOSED FRAMEWORK FOR PLANNING

DEVELOPMENT OF THE NATIONAL ROAD
NETWORK
The IndII study developed a planning framework which would support the substantial
improvement in connectivity across the nation that is needed for achieving the
national development goals. This planning framework would be used for producing
and updating the current National Master Plan for Road Infrastructure of DGH.
The framework would provide an outcome-oriented, analytical basis for enabling the
Master Plan to address the strategic challenges and the developmental needs
identified for the primary road network. It would feed directly into the planning of
fund allocation in the medium- and long-term plans and link to outcome targets of
improved connectivity.
A Long-term Road Corridor Plan is the key tool of the proposed planning framework. It
would be used to optimise the road infrastructure and investment requirements in
each of the main trunk road and economic corridors, such as those identified in the
MP3EI, over a multi-year timeframe. The Corridor Plans would provide:
A strategy for identifying the optimal road infrastructure needed to sustain

development in a long-term 50-year horizon, which will guide investment in both
the existing arterial road network and the emerging expressway network over the
coming 20-year period.
A pipeline of investment projects for successive five-year periods, staged to

optimise functional benefits and spread funding requirements, and identifying
bankable projects for private sector investment and PPP.
Evaluation of the infrastructure standards and the connectivity delivered in terms

of measurable journey times, which will allow performance targets to be
established linked to the capital investment plan.
Focus on the location and staging of an identified expressway network which

would form the backbone of trans-regional connectivity, with staged
implementation.
An optimised approach to improvement of arterial roads in the corridor to modern

highway standards, including realignment and renewal of the road structure,
reduced annual costs, reduction in social and environmental impacts and greater
benefits than the present incremental approach.
A Road Renewal Strategy would supplement the Corridor Plans by providing planning
criteria for capital improvements to modernise the roadway and road structure of all
other arterial and collector roads in the national road network. This strategy would
improve local connectivity among and within growth poles, extend road life, and make
more effective use of funds over the long-term than the current incremental approach

REPORT
25
to road betterment and widening. With staging by successive five-year periods over
the 20-year long-term, it would support the preparation of RENSTRA plans and
estimates of the capital funds required for national road development.
4.1
CURRENT NATIONAL MASTER-PLAN FOR ROAD INFRASTRUCTURE

DEVELOPMENT
The current DGH National Master Plan for 2010-2014, prepared in 2009 and updated
to 2011, includes support for the MP3EI connectivity agenda and the six economic
corridors identified by MP3EI. By its nature, the road development plan contributes to
intra-island connectivity, termed local connectivity which includes connections
among growth poles and within growth poles. For the NTT-Maluku-Papua region,
the inter-island or marine highway connections will be an important element of
connectivity-based development plans.
Figure 9: DGH Arterial Road Widening Program 2010-2014
2,000
Sumatra
Java
Kalimantan
Maluku-Papua
8,000
10,000
3,690
1,430
2,780
Sulawesi
Bali-NTT
Road Length, km
4,000
6,000
3,160
1,122
Total Length
Improved length
1,905
Source: Author, based on data from Table 2.
The DGH plan identifies 24 arterial road corridors across six regions comprising about
30,400 km, or 80 percent, of the 38,000 km national road network, as shown in Annex
A18. The plan for the current RENSTRA 2010-2014 includes 14,100 km of road widening,
which constitutes 46 percent of the arterial road corridor length over the current fiveyear period, as shown in Figure 9 and Table 2. The plan is based on the target of
18
26
Recent plans in 2012-13 include connector corridors and other arterials, with a total length
approaching 50,000 km.

REPORT

widening all narrow sections of road until the full length of each corridor meets the
designated minimum road width of 4.5, 6.0 or 7.0 m by 2014 (see Annex A, Table 4).
This represents a huge program of incremental widening, with treatments costing an
average IDR 1.65 billion/km across most of the country (the exception being Java which
has an average cost of IDR 10.7 billion/km owing to a large investment in four-lane
divided roadways) (see Table 2).
Table 2: DGH Road Widening Program 2010-2014 and 2015-2024 Forecast
Arterial
Road
length
Widened
length
Widened
Length
Average
Treatment
Cost 2011
km
km
Arterial
(in
percent)
IDR b/km
2010-14
2015-24
2011-24
Sumatra
7.798
3.690
47
1,60
5.904
17.037
22.941
Java
4.916
1.430
29
10,68
15.278
5.764
31.042
Kalimantan
5.462
2.780
51
1,40
3.882
13.890
17.772
Sulawesi
6.012
3.160
53
1,35
4.255
6.008
10.263
Bali-NTT
2.013
1.122
56
1,46
1.643
11.010
12.653
Maluku-Papua
4.166
1.905
46
2,70
5.153
10.091
15.244
Total
30.367
14.087
46
2,56
36.115
73.800
109.915
Total ex-Java
25.451
12.657
50
1,65
20.837
58.036
78.873
Road Development Spending

(IDR billion)
Region
Source:
Original data from Tentang Rencana Umum Jaringan Jalan Nasional,
567/KPTS/M/2010, updated by Bipran in 2011. Presentation and derived data in columns 4 and
5 are by the author.
While this plan delivers marginal improvements to traffic flow and connectivity on the
arterial road network over a wide area, it does not necessarily deliver the best benefits
of shortened and improved alignment or renewal of the road structure19, and it is not
able to quantify the improvements to travel times. Moreover, the treatment cost is
more than a third of the cost of road renewal, or full reconstruction, and is likely to
need repeating within five to 10 years, which raises the question of the comparative
economic returns between this incremental policy and a modernisation policy. Finally,
19
In practice some of the funds in this program are used for localised modernisation with minor
realignments and reconstruction, however the planning for this is not a systematic policy.

REPORT
27
the forward estimates for the following 10 years (2015-2024) amounting to only IDR
7.4 trillion/year, appear to be insufficient for making the substantial improvement to
connectivity implied by the MP3EI development plan.
This presentation of the road infrastructure development plan also does not include
development of the expressway network, which is handled separately because the
expressway development is financed primarily through private investment. Integrating
the development plans for both the arterial road network and the expressway network
is needed in order to demonstrate the outcome of the development plans in terms of
improved connectivity. It is also needed for demonstrating the tradeoffs between
alternative investments in incremental widening, full road improvement and renewal,
and expressways.
The new framework proposed for planning the development of the national road
network addresses these issues: first through application of a corridor planning
approach, and second through developing a strategy on road asset renewal.
4.2
INDII CORRIDOR PLANNING APPROACH
Examples of the corridor planning approach were developed for the Sumatera eastern
road corridor 20 and the North Java corridor during IndII Phase I to demonstrate the
concept of Road Corridor Development Plans.
The Sumatera eastern corridor example was derived with data from the 2010 MARS
study21 which recommended the construction of the full length of tolled expressways
(2018 km Bakauheni to Banda Aceh, plus 717 km of east-west connector routes) on
policy grounds. That study concluded that the development of a tolled expressway was
the most efficient option to enable effective connectivity and facilitate economic
growth in Sumatera. The proposed expressway and connecting routes would:
Link the eight state capitals.
Link major sea and air ports with a high speed road link.
Significantly reduce long-distance travel times for both passenger and freight
movements.
The IndII corridor plan analysed options for capacity expansion of the existing national
arterial road from Lampung to Banda Aceh designated by DGH as a trunk route (lintas
utama), and the expressways in the corridor, based on the DGH program and MARS
data for the period 2012-2029.
20
This is smaller than the Sumatera economic corridor which includes more east-west
connector road corridors.
21
The Establishment of a Master Plan for the Arterial Road Network in Sumatra Island (MARS),
Korea International Cooperation Agency, 2010.
28

REPORT

The corridor analysis generated the capacity expansion implementation plan22 shown
in Figure 10, showing the project preparation, land acquisition and construction
periods proposed for each expressway segment over the period 2012-2029, based on
the economic and financial prioritisation (see Annex B for details). A similar
implementation plan was prepared for expansion of the arterial roads in the corridor
occurring in parallel to construction of the expressway. These implementation plans
and the capacity provided in the two parallel facilities were optimised to provide the
best improvement to capacity and connectivity during the 18-year period.

Corridor
2010-14
2015-19
2020-24
2025-29
>2029
North-South segments
Bakauheni-Palembang
Pekanbaru-Medan
Palembang-Pekanbaru
Medan-Aceh
East-West connectors
Pekanbaru-Padang
Palembang-Bengkulu
Tebing Tinggi-Sibolga
Legend
Project preparation
Land acquisition
Construction
Source: NRMP Final Report, Activity 206(a) Technical Assistance to DGH, IndII (June 2011)
Figure 11: Capacity Expansion Profile - Staged Development in Parallel Facilities over
Long-term 20-year Period - Sumatera Eastern Corridor
DEVELOPMENT OF ROAD CAPACITY IN EASTERN SUMATRA CORRIDOR - 2010 TO 2029
ARTERIAL NATIONAL ROAD WIDTH
Width m 14
10
7
6
5
101
102
103
B Aceh
104
105
106
107
108
Medan
Length km
644
Total distance 2536
109
110
111
Pekanbaru
112
113
Palembang Lampung
694
754
443
1892
1198
443
EXPRESSWAY
Dual C'way
Renstra period code

Baseline
2010-2014
2015-2019
2020-2024
2025-2029
101
B Aceh
Length km
460
Distance km 2014
102
103
104
Medan
105
106
107
108
109
Pekanbaru
110
111
112
113
Palembang Lampung
564
610
380
1554
990
380
Source: IndII Presentation based on data from NRMP Final Report, IndII June 2011.
22
The IndII study referred to this as a capacity expansion profile but the term capacity
expansion implementation plan is preferred.

REPORT
29
The planned capacity standards can be seen in a strip map format in Figure 11, where
the width of the strip relates to the road width and the colour coding depicts the five
year RENSTRA period in which the capacity expansion is completed. The plan shows
that the arterial road will be widened to a minimum of seven m width from Lampung
to Medan by 2014, and that 944 km of the expressway should be completed first in the
Lampung-Palembang and Pekanbaru-Medan segments by 2019. By 2029, the
completed expressway would reduce the travel distance from Lampung-Banda Aceh by
20 percent from 2,530 km to 2,018 km. The arterial road would be at seven m width
standard for the entire length, with four-lane divided links being introduced around
the heavily trafficked cities of Medan and Pekanbaru by 2019 before the expressway is
completed.
Expected travel time reduction. To illustrate the benefits of the road corridor
development plan, Figure 12 shows how travel times from Lampung to Banda Aceh will
be reduced from the current 66 hours to 52 hours by 2019, 36 hours by 2024 and 25
hours by 2029. This means that, on completion of the expressway linking Medan to
Lampung planned by 2024, all areas in that part of the corridor would be accessible by
road within 24 hours (allowing for rest periods). Through 2019, most of the
improvements come from improvements to the national arterial road.
Figure 12: Travel Time Outcome Forecasts from Corridor Planning
Approach Sumatera Eastern Road Corridor
70
66
54
Travel time from Lampung, hours
60
Total travel time Lampung to B Aceh, hr
18
50
45
16
40
15
25
14
30
20
33
17
10
20
16
14
10
11
2009
2014
13
6
7
2019
2024
RENSTRA End-year
B Aceh
Medan
Pekanbaru
Palembang
Lampung
5
2029
Source: Data from NRMP Final Report, IndII (2011) with updated travel
time estimates, IndII (2012)
Medium-term forecast of expenditure requirements. The financial analysis estimated

the forecast expenditures in terms of DGH budget categories and year. The results,
seen in Figure , forecast DGH spending requirements on the arterial roads to total IDR
16 trillion over the eight year period 2012-2019, comprising IDR 11 trillion on road
30

REPORT

Funding requirement, IDR trillion
development and IDR 8 trillion on preservation, reducing to just under half that or IDR
0.9 trillion/year from 2020 onwards. For the expressways, the MARS and IndII analyses
show that only 4.4 percent, or IDR 8.5 trillion, of the IDR 193 trillion total cost for
development of the 2,735 km of expressways is financially attractive for private sector
investment even though the majority
of it is economically feasible and thus a
Figure 13: Funding Requirement Forecasts
sound development priority. Therefore
from Corridor Plan - Sumatera Easter Road
in this case, for the Sumatera eastern
Corridor
corridor
and
connectors,
the
government
would
need
to
provide
the
80
remaining IDR 184 trillion in some form
70
60
of VGF over the period from 2015 to
50
2029 in order to implement the
40
30
expressway scheme through PPP
20
concessions.
Defining appropriate
10
mechanisms
for
VGF, such as annuity0
2012-14 2015-19 2020-24 2025-29
type
schemes,
is thus an urgent
Expressway
2.613
54.866
61.451
73.866
development, E
necessity.
Arterial road
development, E
7.634
2.287
0.865
0.415
The north Java corridor analysis was

largely confined to using the available
data on 11 expressway segments from
90.0
Cikampek to Surabaya, with a total
80.0
length of 657 km that are currently
70.0
being concessioned. The data (see
60.0
Annex B) showed that all sections were
50.0
40.0
strongly economically viable, with
30.0
benefit-cost ratio averaging 6.3 and
20.0
ranging from 3.4 to 10. The estimated
10.0
financial internal rate of return was
0.0
2012-14 2015-19 2020-24 2025-29
generally moderate, ranging from 14 to
Public sector
12.5
54.0
64.6
78.2
28 percent with two sections
Private sector
0.0
7.0
1.5
0.0
exceeding the 22 percent threshold for
Source: Data from NRMP Final Report, IndII
attracting private sector investment
(2011)
(Cikampek-Paliminan and BatangSemarang). The analysis showed that
VGF of IDR 11.9 trillion would be needed, amounting to 33 percent of the total
construction cost of IDR 36.3 trillion.
2.238
3.872
3.872
3.872
Funding Sources, IDR trillion
Arterial road
preservation, E
The road corridor development plan approach thus enables a robust expenditure plan
to be prepared which incorporates an optimised tradeoff between investments in the
arterial trunk road and a parallel expressway, scheduling that takes account of the lead
time needed for project preparation and land acquisition, and a linkage of connectivity
outcomes to funding requirements and sources.

REPORT
31
4.3
ROAD RENEWAL STRATEGY
Modernisation of the arterial road network to improve the capacity and safety is
crucial to achieving better connectivity and accessibility in the majority of the
country. Even when present plans for expressway development are complete,
reaching about 4,000 km by 2029, expressways will still comprise only about 10
percent of the national road network and then only in the most heavily trafficked
corridors in the west. Thus improving the connectivity in the majority of the national
road network, comprising 24 corridors of arterial roads with 30,000 km in length across
all regions, will also need to be a strong strategic priority for DGH in the next three
RENSTRA periods.
The existing incremental improvement strategy has been effective only in the
medium-term for addressing the inherited constraints of narrow right-of-way, high
curvature and weak road structures. Surface strengthening and incremental widening
without improved foundations have left many roads vulnerable to rapid deterioration
under heavy vehicles and overloading. Widening has often had negative impacts on
settlements, especially where strip development has evolved, and has reduced
curvature and improved speeds only marginally. As a result, spending on betterment
and land acquisition has had to be repeated within eight to 10 years instead of 20
years or more, and speeds are still low.
A Road Renewal Strategy would provide the long-term planning framework for
progressively upgrading arterial roads to modern standards and lowering annual
costs. A road renewal strategy applied to arterial roads would upgrade a road section
to modern standards at an appropriate time according to the priorities within the
network and region, and work progressively along each corridor. The existing road
would be replaced by a new road, built with modern alignment and cross-section, and
full reconstruction from the foundation up, resulting in an expected life of 20 years or
more. The new road would have better safety and reduced preservation needs in the
future, and a strong foundation to support growth in traffic and loading and future
strengthening, leading to lower annualised costs even though the initial cost is higher.
Road renewal would provide the opportunity to adopt the appropriate alignment for
the long-term. The alignment and location of the road would be designed for the longterm of 25-50 years, including appropriate provision for the full right-of-way. In many
instances the road would be realigned in the same location with improvements to the
curvature and cross-section. However in some sections, taking account of land-use and
spatial development plans, as well as geotechnical risks such as flooding, subsidence
and landslides, the location of the road may be moved to bypass a sensitive area or to
shorten the route length (see Figure 14). The location decision would be subjected to
feasibility study and may be incorporated in the corridor plan when the feasibility has
been established. One-off land acquisition, producing a long-term appropriate solution
for local circumstances, will avoid the need for further incremental acquisitions at a
later stage with the higher prices and social difficulties that entails.
32

REPORT

From a strategic planning perspective, road renewal would be implemented at sublink level within a corridor and, being a long-term development investment, would
affect the prioritisation of preservation on the sub-link in the years prior to
implementation. As alignment and location need to be determined with longitudinal
continuity along a corridor, road renewal should be planned for a full sub-link and will
usually be implemented over a continuous multi-year period. This will also be
appropriate for community consultations, spatial development plans, environmental
conservation and land acquisition requirements. The prioritisation of a sub-link for
renewal will need to be made on both a national and regional basis, considering
budgetary allocation and regional economic priorities. Once prioritised for renewal,
preservation spending on the sub-link will need to be moderated to minimise
treatments and expenditures prior to the major investment in reconstruction.
Figure 14: A Road Renewal Strategy would Follow a Selected Long-term
Alignment Option
Source: Base map from DGH National Road Master Plan (2010), modified by
author. Note that the alignment options are shown only for illustrative purposes
and are not from the Master Plan.
From a technical perspective, road renewal would utilise the DGH road capacity
manual and the new DGH pavement design code that produces structurally efficient
long-life pavement designs with sound foundation and drainage design. Geometric
design standards for the alignment and profile appropriate to the chosen speed
environment and 20-50 year capacity requirements would be based on the DGH road
capacity manual, upgraded to improved safety standards. Foundation, drainage and
pavement design would utilise the new pavement design code currently being
deployed in DGH offices with IndII support. The design would have an expected life of
20 years or more before requiring major rehabilitation, reconstruction or
improvement, thus reducing future preservation needs to routine and periodic
maintenance alone.

REPORT
33
In budgetary and financial terms, road renewal is expected to cost more than the
current incremental policy in terms of initial cost but less than the current spending
when annualised over five to 20 years. The current cost of road renewal with full road
reconstruction is in the order of IDR 5 billion/km for a full standard road of 7 m width
on 12 m formation. With future preservation costs, including routine and periodic
maintenance, totalling about IDR 100-150 million/km-year, the simple annualised costs
including both initial development and future preservation are expected to be in the
order of IDR 300-350 million/km/year over 20 years. This is about half of the current
spending level of about IDR 700 million/km-year (after separating bridge and other
spending). An annual allocation in the range of IDR 5 to 10 trillion/year would support
renewal of 1-2,000 km of road to full standard each year and thus could cover the
entire arterial road corridor network of 30,000 km in 15-25 years. Actual costs will
depend on terrain, road standard and land acquisition in individual cases.
A road renewal policy will be useful to underpin implementation of the renewal
strategy. Given the significant implications - first, in the planning of road capacity and
standards for long-term periods; second in making choices between local road
improvements, new highway, and expressway options in relation to spatial
development; and third in shaping the priorities for the five year RENSTRA plans and
for multi-year programming and budgeting a road renewal strategy needs to be
underpinned by a strong policy directive from DGH or the Minister on modernisation
of the arterial road network. Introducing a road renewal strategy would need
appropriate allocation of resources to road development in the RENSTRA, an
appropriate planning framework (such as the corridor planning approach) to prioritise
the road links and funding allocation, adequate consultation with affected
stakeholders at the local and regional levels, and appropriate internal guidance in DGH
to coordinate the programming and budgeting over the multi-year period required for
project preparation, land acquisition, and implementation at the balai level.
Renewal improves road curvature, sight distances and shoulders, and bridge
standards (note safe shoulders and walkways), Aceh. Photos by Timur Angin.
34

REPORT

4.4
FORECASTING FUNDING REQUIREMENTS AND OUTCOMES
The strength of the road development planning framework becomes even more
evident in the forecasting of forward funding requirements and outcomes. As the
corridor plans generate funding requirements based on a specific capacity expansion
and construction project pipeline, and the road renewal strategy enables direct
estimates of funding requirements based on the length to be renewed, the framework
is able to generate forecasts of funding requirements on the whole network that are
linked directly to road improvements and thus to performance in terms of connectivity
and accessibility.
4.4.1 Forecasting Forward Funding Requirements

The forecast of funding requirements is illustrated using the IndII study example for
the 15-year period, i.e. next three RENSTRAs, 2015-2029. The following scenario based
on the findings of the corridor analyses and the proposed road renewal strategy is
adopted for this example:
Expressway construction includes all of the north Java corridor (657 km) and all the
Sumatera eastern corridor (Lampung to Banda Aceh, plus three east-west
connectors Palembang-Bengkulu, Pekanbaru-Padang and Tebing Tinggii Sibolga)
(2,734 km) (see Annex B), plus an unspecified 300 km in the outer years as a token
part of a probable next phase of development.
Road renewal is applied to all arterial roads, totalling 30,300 km (Annex A),
beginning with trunk route corridors of 8,700 km.
Road preservation reduces from IDR 300 million/km-year to IDR 150 million/kmyear after road renewal.
The funding requirements forecast by the planning framework for this scenario are
summarised in Table 3 and Figure 15 below. This shows that the annual funding
requirements would need to rise - from the present IDR 32 trillion/year by 50 percent
to about IDR 48 trillion/year in the next 2015-19 RENSTRA and to about IDR 56
trillion/year in 2020-24, before falling again after 2025 - in order to implement the
priority works in the 15-year period.

REPORT
35
Table 3: Estimates of Forward Funding Requirements for 2012-2029 from Planning Analysis
Expenditure Category
2010-14
2015-19
2020-24
2025-29
2015-29
5-year Funding Requirement, IDR trillion (2011 prices)

Road development
15-yr total
92
182
245
211
638
Expressway development
86
149
125
360
Sumatra east corridor
55
60
122
68
69
138
30
11
41
10
50
60
88
96
96
86
278
Arterial road renewal
66
66
66
198
Other (bridge, strategic, etc.)
30
30
20
80
40
35
30
105
Sumatra east connectors

North Java
Other
Road preservation
40
Road management
Total national road network
16
15
15
15
45
148
237
295
256
788
148
211
281
236
728
26
14
20
60
Source of Funds
Public funds
Private sector funds
Cumulative length modernised, km
Expressways
700
1.448
2.911
4.364
3.664
Arterial roads
1.953
12.953
23.953
26.900
24.947
Source: IndII analysis of data from IndII(2011), DGH and assumptions on road renewal strategy
implementation.
Figure 15: Forecast of Average Annual Funding Requirements on National Roads 2015-2029
Annual Funding Requirement,

IDR trillion (2011 prices)
70
60
50
40
Expressway - private funding
30
Expressway - public funding
20
10
Road preservation
Road management
2005-09
2010-14
2015-19
2020-24
2025-29
Source: Data in Table 3 from IndII analysis of DGH data and IndII(2011).
Three main observations stand out with regard to the funding patterns:
36
Most of the increased funding would be needed for expressway development,

requiring IDR 360 trillion of funding over 15 years for the period 2015-24. However
only a sixth (IDR 60 trillion) of this is likely to attract private sector investment due
to the low or marginal financial viability of many packages outside the north Java

REPORT

corridor23. Thus it will be imperative to find PPP mechanisms which facilitate

substantial public funding contributions in the order of IDR 300 trillion. VGF
mechanisms which involve upfront transfers could result in demands for public
funding of up to IDR 27 trillion/year in 2020-24 as seen in the figure above. Others,
such as annuity or lifecycle mechanisms, which spread the public payments over a
long period such as 30 years, would reduce the demand for public funding to about
IDR 10 trillion per year but over an extended period as well as producing more
reliable outcomes.
The funding requirement for arterial road development would be essentially similar
to the current allocation, about IDR 19 trillion/year, but would be used in a
different way. The main focus would be on road renewal essentially replacement
of roads with modern road standards. The estimates are based on implementing
about 2,000 km of road renewal per year (which allows all to be completed within
15 years), allowing for some land acquisition and some sections to be at rates
higher than the norm of IDR 5 billion/km. A substantial amount is allowed as lump
sum for other development projects such as bridges, strategic road development
and improvement of accessibility standards in the eastern region.
The funding requirement for road preservation begins at the existing level but
declines as the arterial road network is renewed with roads of more durable
performance and lower maintenance needs.
The distribution of funding requirements over the 15-year period could be flattened
either by deferring projects from the middle period (2020-24) to the last period (202530) or by adopting PPP lifecycle payment mechanisms. Funding requirements in the
outer years, especially from 2030 onwards, are likely to stabilise but would be subject
to later analysis on a rolling basis that would reflect the development goals and needs
in the future.
The example here is based on a preliminary analysis for illustrative purposes and
several important caveats should be noted. Funding is shown in constant 2011 prices,
so does not reflect inflation. The distribution of funding requirements over time is
based simply on the pipelines generated by the analysis, and have not at this point
been moderated to take account of fiscal, administrative, spatial or industry capacity
constraints. Private sector investment levels are derived from the corridor studies and
the primary sources used in them. Apart from the road-specific data from the two
demonstration corridor studies, other data has been treated on an aggregate basis
with allowance for regional differences. With these caveats, the example is considered
to be broadly indicative of the strategic choices facing MPW and DGH at present.
23
This is an upside estimate assuming that the segments in the outer years become more
financially attractive by the time of concessioning. Forty percent of the investment potential
is associated with the north Java segments, which have financial rates of return of 14-28
percent and can expect 57 percent of the IDR 42 trillion funding requirements to come from
the private sector. About fifteen percent relates to the Sumatera expressways, and the
balance relates to the assumption for unspecified future projects in the outer years.

REPORT
37
4.4.2 Forecasting Outcomes or Performance Indicators
Average Travel Time, hr/100 km
The linkage of funding flow to project delivery times makes it feasible to estimate
outcomes that result from the investment in road network development. The
measure of corridor travel times, which is seen as an indicator for connectivity, will
reflect the improved traffic capacity and the reduction of speed constraints, as well as
the shortening of corridor length. While specific corridor examples can be generated,
as shown in Figure 11 on page 36, it is also possible to generate more inclusive
indicators
that
are
representative
of
the
Figure 16: Example of Forecast Average Travel Time
network. The estimates of
based
on National Road Development Plan 2015-2029
the normalised travel times
for trunk road corridors
3.5
(which include use of an
Trunk routes
3.0
expressway where available
Other arterial roads
or alternatively the arterial
2.5
road) and other arterial
2.0
roads, as shown in Figure
1.5
16, link to the flow of
funding and the timing of
1.0
project
implementation
0.5
shown in the tables and
0.0
figures above. Thus, any
2009
2014
2019
2024
2029
changes to the funding
End of RENSTRA Period
allocation or timing would
be reflected in the impact
Source: Author, analysis of program scenario in Table 3
on expected travel times,
using corridor plan methodology
and thus on connectivity.
4.5
APPLYING THE PLANNING FRAMEWORK
The national planning framework requires DGH/MPW to produce an overall concept

plan and 25-year long-term plan (RPJPN) that is consistent with the Bappenas longterm concept plan (RPJPN-Bappenas) and the national spatial plan (RTRWN), under
regulation PP no. 26/2008 and law UU no. 26/2007. Currently DGH has been preparing
five year medium-term plans, such as the current RENSTRA for 2010-14 which is based
on the DGH five year National Master Plan for Road Infrastructure (Tentang Rencana
Umum Jaringan Jalan Nasional), issued by MPW under 567/KPTS/M/2010 (see also
Annex A). However, DGH has not yet produced a long-term plan for national road
infrastructure a point noted during the audit conducted by the corruption
eradication commission (KPK) in 2011.
The planning framework demonstrated in the previous sections provides a basis that
could be used by DGH to prepare a long-term plan. This would relate to development
goals identified in the Bappenas Plan and National Spatial Plan, generate forecasts of
38

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forward funding requirements, and link the planned road infrastructure development
to development outcome indicators such as connectivity. Such a long-term plan would
provide the foundation and framework for preparation of the five year medium-term
plans (RPJM) and enable them to be consistent with the national guidelines on MTEF
and PBB.
The results of the example reinforce the message that DGH and MPW face a
particularly strong strategic challenge in expanding the capacity of national road
infrastructure to meet the connectivity goals and growing demand.
4.5.1 Steps in Applying the Planning Framework

The following are some key steps involved in developing a long-term plan and
addressing the challenge of expanding the capacity of national road infrastructure to
meet the connectivity goals and growing demand.
1. The planning of road infrastructure capacity needs to become a strategic priority
of DGH and requires a proactive approach. The scale of investment required for
increasing the capacity of the national road network to meet connectivity and
safety goals in the balance of the present 25-year long-term plan to 2029 is huge.
The funding requirements for national road development alone average IDR 43
trillion per year for the next 15 years, or over 80 percent of total national road
expenditure needs. With only IDR 4 trillion/year attractive for private sector
investment, the total public spending on national roads needs to increase to an
average of IDR 49 trillion/year. This is about 0.6 percent of GDP and 50 percent up
on current levels, but is potentially affordable if the correct policies are in place to
ensure effective outcomes. While the past focus on road preservation has been
important, the baseline funding that is adequate for full provision of road
preservation as well as road management overheads amounts to IDR 10
trillion/year, which would constitute only 20 percent of the DGH expenditure
program.
In addition to the fiscal priority, the delivery of the major infrastructure requires a
long lead time and long-term planning. It needs to coordinate with and be
responsive to the national spatial development plan and economic plans, especially
in terms of demand forecasting. As the physical location of major infrastructure is
intrinsically permanent, a socially inclusive approach is needed towards
determining land requirements for realigning old roads or building new roads
especially as historically land acquisition has proven to be a significant cause of
delay to infrastructure delivery. Thus the incremental approach and the essentially
annual cycle of minimal project preparation associated with the previous policy is
not feasible for this large capacity development program. Instead, capacity
expansion and road development projects need to be planned five to 10 years in
advance for budgeting, and project preparation and land acquisition must be
scheduled for one to three years in advance of project implementation or five
years in advance if private sector financing is to be involved. Thus advance

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39
planning, and a proactive approach that sets up consultations and preparations

well in advance of the project are crucial to meeting the planned implementation
schedule.
An opportunity for this shift of DGHs strategic priority from preservation to
development arises with the preparation of the next RENSTRA for 2015-19 which is
due to begin in January 2013. When the funding resources were doubled late in the
process of preparing the current RENSTRA in 2009, DGH did not have a road
development policy or a pipeline of projects in place which could have guided the
spending to more effective investment in modern standard highways.
Consequently, the existing policy of incremental widening was applied widely to
nearly one half of the arterial road network.
The need for this shift in strategic priority of DGH to road development to happen
very soon is thus critical.
2. Revisions will be needed to some policies, regulations and laws to reflect and
support the shift in strategic priority and the modernisation of the national road
network. The foregoing analysis makes it clear that an expressway network will be
the backbone of trans-regional road travel and local connectivity going into the
future, with single carriageway modern highways in areas of low traffic demand
but important accessibility needs. However, important revisions are needed to
support the shift in strategic priority, for example:
a. Expressways (jalan bebas hambatan) need to be defined as a class of public
road and national road with limited access and not defined solely as toll
roads with toll revenue capability.
b. Design standards for operating conditions, cross-section and curvature
(including controls on access and land use) need to be established for
expressways and for highways (sometimes termed high-grade highways).
c. Regulations need to be expanded to provide for a broader range of VGF
mechanisms than the single one currently available, for instance to include
regular payments to the concessionaire in annuity-type mechanisms.
d. Provisions to facilitate and expedite land acquisition need to build on the latest
law and the revolving fund, to authorise a unit such as the BLU in BPJT to act as
the purchaser, and to address ways of reserving rights to land years in advance
of requiring it for road development.
e. The policy relating to availability of a free road parallel to a tolled facility should
be reviewed to ensure that capacity expansion of public roads by DGH does not
unfairly undermine the economic or financial viability of an expressway in the
same corridor, but that the facilities are optimised with a view to delivering the
appropriate overall level of service and connectivity in a corridor.
3. A formal plan for road corridors, incorporating trunk routes and arterial routes,
should be defined in relation to the national spatial plan and form the basis of
national road network planning. Using the preliminary outline of arterial road
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corridors compiled by DGH (see Annex A) as a starting point, the corridors should
be given a hierarchy that reflects the function they serve in the network and the
level of demand. The economic or social priority assigned to each route (for
example by the national spatial plan or an economic development plan) may be
reflected either in the hierarchy or preferably separately in an alternate
designation. Each corridor should have defined nodes which will serve as the
reference points for determining travel times and distances. A definition of
nautical roadway or highway, or similar, should be established to address interisland connections, including a protocol for representing travel times and distances
on the nautical segments either separate from or incorporated with travel in
adjoining land sections.
4. An expressway network should be defined as an identifiable network within
national roads and separate from arterial roads. The network would include all
expressway segments built or planned in the foreseeable long-term, forming a
contiguous interconnected network that would serve as the backbone of transregional and peri-urban road travel. Consideration may be given to including
interurban highways in sparsely developed areas in the network where they are
planned and located as a first stage of a potential expressway far in the future
beyond the long-term plan. Otherwise, another term, such as highway or highgrade highway may be used to designate such roads separately from the
expressway network. The expressway network would be defined in relation to the
national spatial plan, and would include the segments already identified in an
annex of the national road regulations, PP no. 26/2008.
5. An initial long-term master plan for national road infrastructure should be
prepared to serve as the basis for preparation of the 2015-19 RENSTRA. As the
time for preparation is short and the timeframe remaining within the current longterm plan is 15 years not 25 years, this initial plan would utilise existing data to the
extent possible and would limit any detailed analysis to the high priority corridors.
Methods for handling cases with different levels of data availability have been
outlined in the IndII study (2011). There are three scenarios - (i) where full
feasibility study data is available for the network in the corridor; (ii) where partial
feasibility study data is available; and (iii) where little or no formal data is available.
Using the corridor analysis approach, a capacity expansion profile would be
developed for each priority corridor. Forecasts of funding requirements and travel
time outcomes should be made, following the methodology outlined in this report
and by IndII(2011), to cover the national road network. The process is summarised
in Box 2 and in more detail in Annex C.

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41
Box 2: Summary of Steps for Preparing the National Road Master Plan
1. Confirm priority economic corridors The priority of economic corridors for road
infrastructure development is not merely a technical task. It involves consideration of spatial,

economic and social factors that will be influenced by national development policy and
planning. Priorities both within the six economic corridors identified in the MP3EI and beyond
them can be accommodated in the planning process if they are identified early on.
2. Define road corridors and their priority Within the priority economic corridors the
individual priority road corridors, and their relative priority, can be defined based on technical
criteria such as traffic volume/capacity ratio and on equity considerations.
3. Specify key measures of Levels of Service This includes desired travel times and Level
of Service between key nodes on an end to end basis in each road corridor with the aim to
provide full connectivity to the desired standard.
4. Adopt appropriate design standards This includes appropriate design speed, curvature,
gradient, road cross-section, and access controls, etc. defined with a long-term view,
appropriate for at least 20 years without major reconstruction or improvement.
5. Define the nation-wide expressway and highway network and supporting road access
in each road corridor, the desirable functional structure of the expressway network, the
arterial road network and the hierarchical structure of the supporting road network.
6. Identify connections between economic corridors including the capacity and design
standards of connections between economic corridors.
7. Prepare Road Corridor Development Plans Within priority road corridors, the indicative
priority needs to be determined for implementation of sections within the expressway or highgrade highway, their desired initial and long-term cross sections based on available
information (e.g. traffic volumes, traffic composition, traffic growth rates and capacity), and the
related land acquisition needs.
8. Develop a 20 year likely financing budget for each road corridor a capacity expansion
profile and a pipeline of sub-projects, with supporting actions and associated budget needs.
9. Prepare important projects for early implementation.
6. The preparation of road corridor plans for prioritised corridors should be

developed as a DGH procedure based on the example provided in this report and
supporting documents. The steps include:
a. Identify the preferred or optimal network, location, alignment and standard of
major roads in the corridor including the proposed alignment for any new
expressway or road; realignments of sections of existing road taking account
of the spatial plan, available detailed development plans and other
information; and of desired improvements in travel speed, safety and access.
b. Review available studies or prepare feasibility analysis of capacity improvement
options for segments in the corridor, especially alternatives between new
expressway or highway development and improvement of the existing arterial
road, evaluate environmental and social impact constraints and mitigation,
develop scenarios of preferred options and data on segment length, traffic
split, land and construction costs, economic return and benefit-cost ratio.
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c. Prepare a multi-year capacity expansion activity profile for each arterial road
facility in the corridor (such as expressway and arterial roads), including project
preparation, land acquisition and construction activities, covering a 15-20 year
period with sequencing based on the economic priority of the works.
d. Prepare land acquisition plans and schedules based on the road plan and
capacity expansion activity profile for the selected scenarios, including cost
estimates and consultation process.
e. Evaluate improvement options for the supporting arterial and collector road
network in view of accessibility needs and targets and in relation to the spatial
development plan and regional development factors.
7. Calculate estimates and trends of outcome indicators such as road transport
demand, travel times and distances for the corridor, as a function of the capacity
expansion activity profile over time. Allowance for impedance to traffic flow
arising over time from traffic congestion or uncontrolled roadside activities should
be included where appropriate.
8. Prepare the multi-year schedule of unconstrained funding requirements for each
corridor, and develop a broad multi-year financing plan, including breakdown
showing public funding by category and potential for private sector investment.
The funding requirements and schedule should be based on the capacity expansion
activity profile and cost estimates for the preferred options, expressed in constant
current prices on a yearly or five yearly basis. The funding requirements should
include a breakdown into potential funding sources, including public funding
categories (expressway development, arterial road development, other road
development, road preservation and road management) and potential for private
sector investment based on an estimated financial internal rate of return24. It is
useful to identify the land acquisition element of development expenditures.
9. Prepare the long-term development and expenditure plan for the national road
network, together with forecasts of key outcome indicators, for a range of
funding scenarios. By compiling forecasts from corridor plans and other national
road needs, successive medium-term development plans and funding
requirements will be developed for the entire national road network. This will
include plans for other parts of the network such as urban roads, strategic roads
and collector roads. Scenarios covering high, medium and low funding resource
envelopes would be developed, taking account of fiscal constraints from the
Ministry of Finance (MoF), regional and spatial development policy from Bappenas,
and other relevant planning policy guidance. This process would also take into
account risk assessments on the availability of private sector investment, the
implementation capacity and capability of the construction sector, the land
acquisition process, and the performance of DGH and BPJT in program delivery.
24
Recent expressway studies for MPW, as well as the IndII (2011) study, have used 22 percent
FIRR as a threshold for attracting private sector investment.

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43
CHAPTER 5: BUILDING CAPACITY

Increased capacity, and changes in policy in some aspects, will be needed to enable
Bipran in DGH and BPJT to implement the new planning framework and to respond to
this significant shift in strategic priority. In the near term changes in process will be
required that are likely to warrant targeted technical support. In the medium-term
there may also need to be changes in mandate, responsibility, image and
organisational structure.
5.1
DGH-BIPRAN
DGH, and Bipran in particular, would be responsible for adapting the DGH road
development policy to the new paradigm and for implementing the new planning
framework set out in Section 4.
5.1.1 Establishing Strategic Priorities and Supporting Changes to Policy and

Regulations
For the shift in strategic priority and supporting changes to policy and regulations,
outlined in steps 1 and 2 of section 4.5, high-level consultation and socialisation of the
issues involved will need to be undertaken within MPW and the senior management of
DGH. These are the levels responsible for determining the strategy for the sector and
the strategic priorities of sector expenditure. It is vital that the urgency and the
magnitude of the challenge of road network development be fully explored and
understood within MPW and DGH, as well as the feasibility and practicality of
undertaking such a significant shift in strategic priority successfully.
Key aspects are also of highly relevant interest to other ministries and agencies,
especially Bappenas, MoF, CMEA and the Ministry of Transportation. The implications
for the establishment of outcome targets (such as connectivity), the linkage with
spatial development plans, and the prioritisation of regions and corridors are of
particular relevance to Bappenas. The forecasts of a steep increase in funding
requirements and how they should be allocated, the limited potential for private
sector investment, and the urgent need to extend the modalities available for VGF are
critical issues to be addressed in consultation with MoF and CMEA.
To support these discussions, Bipran and DGH will need to develop the justification for
the strategic shift with a more detailed evaluation of the technical and procedural
implications of the proposed road development policy and strategy. Examples include:
44
The introduction of connectivity as a strategic target and its definition.
The use of realignment versus widening and its land implications.

REPORT
The coordination of road renewal with road reconstruction in the programming

process.
The process of consultation at local and regional levels needed for acceptance of
the long-term plan and road alignment strategy.
The most important aim in the planning process will be to ensure that the right roads
are being built in support of the nations long-term social and economic development.
5.1.2 Planning of Expressway Network and Road Corridors

Bipran will need to have a more explicit and a larger role in planning the spatial layout
of the network, the identification and layout of the expressway and highway network,
and the planning of realignment and road renewal in road corridors, than it does at
present. As the corridors and connectivity issues generally cross balai boundaries, and
as the planning and analytical work involves specialist methods and inputs, it appears
appropriate that Bipran is probably best placed to be responsible for the coordination
of network development planning, and specifically for preparation of the corridor plans
and forecasts of forward funding requirements for road development. However,
detailed surveys and consultations will need to be conducted by and in cooperation
with the relevant balai and local agencies, especially in relation to identifying and
defining alignment options and assessing the implications for land acquisition and
spatial development.
To fulfill this larger role, Bipran will need to rebuild and extend its capability for
network planning and analysis, expressway planning, economic appraisal and financial
analysis. Currently, staffing skills and capability are skewed towards monitoring,
evaluation and reporting so some adjustment towards planning and appraisal
capability is required, as well as making efficient use of external consultant support.
5.1.3 Coordination and Roles of DGH and BPJT

Road corridor-specific proposals to build lengths of expressway will be passed to BPJT
while other road construction, rehabilitation and preservation will be the responsibility
of DGH. Specific functions such as land acquisition, which under the recent law may
now be purchased directly, may be consolidated under a BLU within BPJT. The
maintenance of the framework including updating of the Preliminary National Road
Master Plan and preparation of Road Corridor Development Plans, and the
development of the DGH rolling program and RENSTRA, for the multiple five-year
periods making up the long-term planning horizon, will be the responsibility of the
DGH.
DGH, and Bipran in particular, will need to demonstrate its ability, in-house or through
consultants, to manage the whole process and conduct the necessary technical

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45
analyses to ensure that all schemes going into the project pipeline are rigorously
assessed and based upon sound strategic criteria. This requires a more comprehensive
approach than currently used. A planning team could be established and properly
resourced to undertake this role.
5.2
BPJT
BPJT at present is responsible for the procurement and delivery of toll roads and for
the concessioning of toll roads built with government funds. Since, at the present time,
all expressway development is planned as toll roads, BPJT is in effect a de facto
expressway authority. However, in order to shift the focus to an identifiable
expressway network and to allow for the possibility of non-tolled expressways in the
future, the remit of BPJT, in whatever its final form, would need to be broadened to
cover all expressways. The formal conversion of BPJT to an Indonesian Expressway
Development Authority may be appropriate in the medium term.
BPJT would be responsible for the delivery of the priority expressways identified by
DGH. BPJT will package the roads into projects, undertake the financial evaluation of
each project, determine the most appropriate concession type and develop and
negotiate the concession. BPJT will be required to manage its own budget from which
it will need to cover land acquisition well in advance of project commencement, any
VGF that might be required at concession negotiation, and the direct construction
costs of projects that are to proceed without private sector funds.
The evaluation and project management responsibilities would require access (either
in-house or via consultants) to high calibre planning, technical, financial and
management expertise. The concession negotiation process will require effective
preparation and negotiation to ensure that societys interests are safeguarded. This
will require a substantial enhancement of BPJT resources and capabilities and would
require BPJT to be supplemented significantly by specialist outside expertise.
The preliminary findings of the IndII (2011) study on BPJT needs included:
46
A substantial increase in staffing and their capacity to support project

preparation and business case development work. Currently there are practical
constraints to finding and retaining staff with the appropriate background and
experience for the present level of remuneration in BPJT. Higher remuneration is
an initial requirement.
Enhanced access to specialist expertise such as legal advisors, demand forecasting

experts, economists, and commercial/financial experts. It is neither realistic nor
necessary to expect BPJT to perform every one of the many specialised tasks for
the toll road projects on its books that are potentially valued at up to several
hundreds of million dollars. BPJT instead needs to become an informed purchaser
and effective manager of the expert professional services that it requires like
similar agencies in the UK, Australia and other countries in the region. BPJT does
need improved capacity and enhanced knowledge of certain topics such as how

REPORT
the private sector perceives risk and the principles of risk allocation. BPJT would
therefore manage all key tasks undertaken by its specialist consultants.
Considerable annual budgets would be needed to retain and therefore access the
needed specialists speedily.
Its own land acquisition unit and specialists capable of processing a large volume
of transactions and satisfying government and donor requirements on
environment and social safeguards. The private sector will not be attracted to
invest in projects where there are risks they cannot manage such as the timely
delivery of land and the necessary environmental and social safeguards clearances.

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47
CHAPTER 6: CONCLUSIONS AND RECOMMENDED ACTIONS

The government faces an urgent and strategic turning point in its provision and
development of road infrastructure. Despite strong growth in the economy, the landbased local connectivity between main economic centres remains low and significantly
lower than regional neighbours, thus reducing trade competitiveness and impeding the
spread of economic activity to regional centres.
After more than a decade of making road preservation the strategic priority for road
infrastructure, the road assets are in reasonable condition but the road standards and
capacity of the network are inadequate for the growing economy. The impact of
lagging investment in the development of modern highway infrastructure is becoming
increasingly evident. The inhibiting factors have been identified as follows:
Expressway development, essential to long-range high-volume road travel, has

lagged demand through an over-reliance on private sector investment and an
inadequate framework for public partnership and managing financial risks that is
necessary for attracting the needed investment.
The long-term impacts on connectivity arising from underinvestment in road

development and from a short-term policy of incremental road width
improvements over the past decade have not been reflected in the performance
targets set for road infrastructure leaving the road infrastructure weakly
positioned to support the countrys expected surge in economic growth.
Short-term policies and inefficiencies in road program delivery mechanisms have

led to repetitive work and high annual costs for road preservation that have
required a disproportionate share of the road budget and been only moderately
effective.
The Framework for Planning Development of the National Road Network described in
this report shows how a long-term Master Plan could be prepared that is linked to
national development goals such as connectivity, and guides the funding requirements
and the physical road development program in successive five year medium-term
plans. The Master Plan would comprehensively identify the future expressway,
highway and arterial road network, together with the implementation steps, required
resources, policies and standards.
The Framework proposes a two-pronged approach to the planning of road network
development:
48
Long-term road corridor plans that would be used to identify the future
expressway, highway and arterial road network in each national road corridor, for a
20-50 year horizon. Each plan would optimise connectivity and road capacity to
support the forecast transport demand and social and economic development for
20-25 years in the context of the national spatial plan, and take into account
longer-range options out to 50 years.

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CHAPTER 6: CONCLUSIONS AND

RECOMMENDED ACTIONS
A road renewal strategy, implemented on national arterial roads, would be used

to progressively upgrade all arterial roads to modern highway standards over the
15-year period. Using the guidance of the corridor plans, the roads may be
realigned to improve traffic flow and safety and to eliminate or minimise future
needs for land acquisition. Importantly, the road structure would be rebuilt to new
long-life standards that would reduce future maintenance needs and overall lifecycle costs.
A preliminary application of the planning framework has shown the large magnitude
of the backlog in capacity development of the national road network. Public spending
on national roads would need to rise by 66 percent from the present level of IDR 30
trillion/year to an average of IDR 49 trillion/year over the 15-year period remaining in
the current long-term plan (RPJN). All the increase would need to be allocated to road
development, raising its allocation to about 80 percent of the total.
An investment of IDR 638 trillion (in 2011 prices) in road development would be
needed to improve connectivity by over 40 percent in terms of travel times, especially
in the priority economic corridors, over the 15 year period 2015-29. A little over half of
this, IDR 360 trillion, would be required to build 3,700 km of expressway connecting
the countrys main economic corridors of north Java and east Sumatera, from Surabaya
to Medan and links to neighbouring centres. Of this, about one sixth or IDR 60 trillion
is likely to attract private sector investment, leaving about IDR 300 trillion to be
provided in public funds through VGF or other mechanisms such as annuity and lifecycle funding models. The remaining IDR 278 trillion would be invested in the renewal
of 25,000 km of arterial roads and in improvements to bridges, strategic roads and
other national roads.
The following are a number of actions which could be taken to implement the
proposed planning framework, with the aim of stimulating the development of the
national road network to achieve the goals of the long-term national development
plan, RPJN25:
Road network development needs to become the strategic priority for DGH, with
road preservation taking a secondary role. The planning of road network
development requires a proactive and long-term approach, planning the
investment projects, road standards and funding five to 20 years in advance.
Revisions will need to be made to some policies, regulations and laws to reflect
and support the shift in strategic priority and the modernisation of the national
road network.
A formal plan for road corridors, incorporating trunk routes and arterial routes,
should be defined in relation to the national spatial plan and form the basis of
national road network planning.
25
More details are provided in section 4.5 and section 5 of the main text.

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49
An expressway network should be defined as an identifiable network within

national roads, separate from arterial roads.
An initial long-term master plan for national road infrastructure should be

prepared to serve as the basis for preparation of the 2015-19 RENSTRA.
The preparation of road corridor plans for prioritised corridors should be

developed as a DGH procedure, based on the example provided in this report and
supporting documents.
Outcome indicators - such as road transport demand, travel times and distances
for the corridor and their forecast trends in each corridor, should be estimated as
a function of the capacity expansion activity profile over time.
A multi-year schedule (of 15-25 years) of unconstrained funding requirements

should be prepared for each corridor, as well as a multi-year financing plan
identifying the source of funds, including a breakdown showing the public funding
by category and the potential for private sector investment.
A long-term development and expenditure plan for the national road network,
together with forecasts of key outcome indicators, for a range of funding scenarios,
should be prepared by compiling the forecasts from corridor plans and other
national road needs across the national road network.
PPP mechanisms, which facilitate substantial public funding contributions

distributed over extended periods, such as annuity or lifecycle delivery
mechanisms, need to be defined and authorised among the options for delivering
VGF and reducing risk (this would be attractive for investors and lead to more
reliable outcomes).
Build managerial and technical capacity in DGH-Bipran for national road

development planning:
Support for internal dialogue on the proposed planning framework, the future
program and funding implications, and the shift in strategic priority for DGH.
Undertake initial study and surveys to define travel times and corridors.
Prepare the Preliminary National Road Master Plan, with technical assistance
as needed.
Prepare formal Road Corridor Development Plans for priority economic

corridors, with technical assistance as needed.
Review and support the implementation of organisational and staffing

improvements at DGH.
Build BPJTs managerial and technical capacity to expedite delivery of a highcapacity expressway network:
50
Build managerial and technical capacity in BPJT for project preparation and
processing of transactions.

REPORT
CHAPTER 6: CONCLUSIONS AND

RECOMMENDED ACTIONS
Identify specialist skills needed to enhance and expedite project transaction

processing and facilitate adequate sourcing of the skills to support improved
performance in transaction processing.
Review and strengthen the role of the land acquisition BLU in line with the new
law and pending regulations.
Review and support the implementation of organisational and staffing

improvements at BPJT.
The issues raised by this report are far-reaching and have significant implications for
the direction of policies and allocation of funding for development and expansion of
the national road network. However as noted there is a critical window of opportunity
during 2013 when the 2015-19 RENSTRA is being prepared, for the strategic issues in
the report to be considered and addressed in the directions being set for future
spending on the national road network.
Modern roads bring smooth, safe travel and access to amenities and
markets, Aceh. Photo by Timur Angin.

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51
ANNEXES
ANNEXE 1: NATIONAL MASTER PLAN FOR ROAD INFRASTRUCTURE DEVELOPMENT
The DGH National Master Plan for Road Infrastructure Development (Tentang Rencana
Umum Jaringan Jalan Nasional), issued by MPW under 567/KPTS/M/2010, includes the
identification of the following 24 road corridors in the national road network. Table 4
below includes the data on corridor road length and the extent of road widening
undertaken during the current RENSTRA under the expenditure category of road
development.
Table 4. Current Development in National Arterial Road Corridors of the National Master Plan
Island
Sumatera
Java
Kalimantan
Road Corridor
52
Minimum
Width
Standard
(km)
(km)
(m)
2.790
1.240
7,0
Middle
2.473
1.220
6,0
West
2.535
1.230
4,5
Pantura north
1.363
310
7,0
Middle Cross
1.191
380
6,0
South Cross
725
190
6,0
South Coast Cross
1.637
550
4,5
South Cross
3.299
1.450
6,0
Middle Cross
1.684
670
4,5
270
4,5
477
390
4,5
West Cross
2.107
1.410
6,0
Middle Cross
2.082
920
4,5
East Cross
1.823
830
4,5
Bali North-cross
200
77
4,5
Bali South-cross
235
58
6,0
Border Cross
Bali-NTT
Capacity
Expansion
2010-14
East
North Cross
Sulawesi
Current Road
Length

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ANNEXES
Island
Road Corridor
Current Road
Length
Capacity
Expansion
2010-14
Minimum
Width
Standard
(km)
(km)
(m)
Trans-Lombok
119
6,0
Trans-Sumbawa
434
391
4,5
Trans-Flores
677
455
4,5
Trans-Timor
348
140
4,5
Trans-Seram
430
340
4,5
Trans-Buru
252
65
4,5
Trans-Halmahera
353
280
4,5
3.131
1.220
4,5
30.367
14.093
15.865
7.745
4,5
6 m width
9.914
4.657
6,0
7 m width
4.153
1.550
7,0
Maluku - Papua
Papua Strategic Links

Indonesia
Total
Distribution of road width standards

4.5 m width
Source: Current national road master plan data from Bipran, DGH (2011)
Figure shows that by close

of the current program in
2014, only 14 percent of
the network will have a
width standard of 7 m, and
53 percent will still be at
the very basic level of a 4.5
m width standard.
Figure 17. Expected Distribution of Width Standard on

National Arterial Roads after DGH 2010-14 Road
Development Program
7 m width
14%
6 m width
33%
4.5 m width
53%
Source: Data from Table 4

REPORT
53
ANNEXE 2: ECONOMIC AND FINANCIAL DATA ON PLANNED EXPRESSWAY

DEVELOPMENT IN SUMATERA EASTERN CORRIDOR AND JAVA
NORTHERN CORRIDOR.
Table 5. Economic and Financial data: Java North Corridor Expressway

No.
1
2
3
4
5
6
7
8
9
10
11
Expressway segment
Cikampek-Palimanan
Kanci-Pejagan
Pejagan-Pemalang
Pemalang-Batang
Batang-Semarang
Semarang-Solo
Solo-Matingan
Mantingan-Ngawi
Ngawi-Kertosono
Kertosono-Mojokerto
Mojokerto-Surabaya
Total N Java Corridor
Data source
Length Feasibil Design - Land - IDR Construc

km ity - IDR IDR b
b
tion b
IDR b
126
30
58
42
78
75
49
33
92
44
30
657
87
21
35
26
45
70
25
17
45
29
31
431,45
174
43
70
52
89
140
50
34
90
59
62
862,9
791
200
194
658
1077
662
446
894
290
633
5845
7.359
1.650
2.943
2.195
3.776
5.941
2.123
1.430
3.795
2.490
2.639
36341
Total IDR b
Construc
tion unit
cost IDR
b/km58
8.411
55
3.248
51
2.467
52
4.568
48
7.228
79
2.860
43
1.927
43
4.824
41
2.868
57
3.365
88
41.766
55
1
BCR
NPV
IDR b
EIRR - % FIRR - % VGF - %
10,0 51.955
5,0
6.517
4,9 11.252
5,7
8.459
8,7 26.038
4,6 22.068
5,1 10.485
3,4
4.110
6,6 18.874
5,6
9.427
5,8 11.443
6,3 180.628
4
73
47
46
52
66
42
45
34
53
50
49
53
VGF IDR b
28%
18%
17%
18%
25%
17%
17%
14%
22%
18%
19%
0%
45%
53%
41%
0%
52%
54%
74%
26%
53%
43%
33%
743
1.560
900
3.089
1.146
1.058
987
1.320
1.135
11.937
1. IndII (2011). Deliverable 7 National Road Master Plan Process (Final) - Table 8.2
2. ibid. Section 8.2, p 36
3. IndII (2011) Working Paper on Corridor Analysis. Package 2 Development of NRMP - Table 2.2
page 12
4. ibid. Table 3.1 page 14
5. ibid. Table 4.2 page 20
6. Data not presented in ref. 3 - filled from basis used in ref. 1
Table 6. Economic and Financial data: Sumatera East Corridor Expressways
No.
Expressway segment
1
2
3
4
Bakauheni-Palembang
Palembang-Pekanbaru
Pekanbaru-Medan
Medan-B.Aceh
Subtotal South-North
5 Palembang-Bengkulu
6 Pekanbaru-Padang
7 T.Tinggi-Sibolga
Subtotal Connectors
Total - East Corridor
Data source
Length Feasibil Design - Land km ity - IDR IDR b

IDR b
b
380
610
564
460
2.014
303
242
175
720
2.734
269
463
489
328
1.549
292
343
204
839
2.388
537
925
978
655
3.095
585
685
408
1.678
4.773
2.201
4.382
4.277
3.225
14.085
2.622
3.703
2.977
9.302
23.387
Construct Total -IDR Construc

ion - IDR
b
tion unit
b
cost IDR
b/km
20.663
23.670
54
35.583
41.353
58
37.595
43.339
67
25.205
29.413
55
119.046 137.775
59
22.479
25.978
74
26.345
31.076
109
15.690
19.279
90
64.514
76.333
90
183.560 214.108
67
7
BCR
NPV
IDR b
1,75
0,66 1,03
0,57
0,46 0,61 0,31 -
EIRR - % FIRR - % VGF - % VGF IDR b
3.493
3.123
151
-2314
-1.793
3.249
2.798
3.141
9.188
-10.981
20,1
11,2
15,3
9,8
11%
7,9
10,5
4,3
7. IndII (2011) Deliverable 7 - NRMP Process. - Table 7.4 page 25

8. IndII (2011) Package 2 NRMP - Working Paper on Corridor Analysis - Table 2.3, page 13
9. ibid. - Table D.1
54

REPORT
ANNEXES
ANNEXE 3: GENERAL GUIDANCE ON PREPARATION OF A NATIONAL ROAD MASTER

PLAN
1.
Preparation of the National Road Master Plan
The purpose to be fulfilled by a National Road Master Plan is to:
Define the overall 20 plus year framework that shows the structure of the desired
expressway network and supporting arterial road network to be developed, and
gives clear indications of how it will be realised, and, by so doing:
Demonstrate how new national road development would make a substantial

contribution to the success of the nations economic corridors.
Comprehensive study and thinking on how to provide appropriate connectivity

between the key nodes (cities, ports, etc.) is critical to support the development of the
economic corridors. Although the detailed development planning of the economic
corridors is still ongoing, the principal expressway sections of the needed master plan
can be identified with the option of adding other links, if needed, to serve newly
identified nodes in the future. Detailed prioritisation of all links is not necessary at the
outset because the volume of worthwhile and do-able sub-projects is likely to exceed
the available budgets.
The highest priority for the National Road Master Plan is to provide the expressway
connections or high-grade highways between major economic centres and trading
nodes such as cities, ports, rail terminals, airports and production areas. Subsequent
master plans could address the regional and urban road needs. Importantly, land
acquisition requirements for the ultimate cross section of proposed expressways and
high-grade highways must be identified well in advance in order to allow the
opportunity of reserving or purchasing land at appropriate costs. This also allows
orderly adjustments to be made to spatial planning at a local level to coordinate the
connectivity of infrastructure and to minimise any adverse impacts on residential or
commercial ownership and activities.
Because the performance of expressways may be affected by the performance of other
arterial roads or collectors, the scope of a National Road Master Plan must consider
the role of expressways and high-grade highways together with arterials and
collectors.
The National Road Master Plan would also identify the sequence of subsequent
detailed Road Corridor Development Plans26 whose outputs would progressively refine
26
Long-term network refinements and development plans for national expressway and
supporting arterial and collector roads along key road corridors in the economic corridors is
required. Further, the economic corridors need to be broken down into logical sub-corridors

REPORT
55
the national expressway and supporting road network structure. Their outputs would
also identify a series of phased sub-projects and supporting implementation actions in
the following time periods: (i) One to three years for the Annual Work Plans and rolling
programs; (ii) Four to 10 years 27 to indicate the road investments and actions needed
for the medium term; and (iii) 10 to 20 years on an indicative basis.
This framework is illustrated in Figure that indicates that it would be possible to
complete a Preliminary National Road Master Plan within one year and progressively
develop a more comprehensive Master Plan within five years if extensive resources are
allocated to support the planning effort. Road Corridor Development Plans would be
updated after five years depending on local circumstances to inform subsequent
updating of the Master Plan.
Similar planning and development of other provincial and urban road networks is
required but this is a separate task not addressed in this report.
2.
Preparation Steps
This section provides more detail on the steps for preparation of the National Road
Master Plan, set out in Box 2 on page 42, that are DGH-Biprans responsibility.
Step 1 Confirm Priority Economic Corridors
The priority economic corridors would be expected to be identified by Bappenas since
national, economic, and social development matters need to be considered.
Step 2 Define Road Corridors and Their Priority
DGH-Bipran and Bappenas would prioritise the road corridors (within economic
corridors) based on technical criteria such as traffic volume/capacity ratio plus social
accessibility needs. Prioritisation is essential as resources need to be focused on where
the need and benefit to be achieved is high.
Step 3 Specify Key Measures of Levels of Service
Desired travel times and Levels of Service between key nodes on an end to end basis
in each road corridor of the six priority economic corridors should be determined.
However, given that the various geographic regions have different topography,
development characteristics, and existing road infrastructure, the Levels of Service are
likely to be differentiated by region. For example, in a mountainous region desired
travel speeds may be lower than in a region with flat or rolling topography.
to aid focusing of effort. The term road corridor is used in the conventional sense meaning
that it could include possible alternative alignments or completely new parallel roads.
27
And hence the forward programs contained in the Five-year RENSTRAs.
56

REPORT
ANNEXES
Figure 18. Flowchart for Developing a National Road Master Plan
Preliminary National
Expressway Master Plan
Updated National
Expressway Master Plan I
Informs:
network structure,
1-3 year rolling
program, 4 to 10
years, and 10 to 20
years indicative
IndII 1
Concept Road
Corridor Development
Plan 1 East Sumatra
Ground Truthing Road Corridor

Development Plan 2
Continued below
Node to node connectivity

& supporting networks
Standards, policies
Concept Plans for Green
Fields areas & land
acquisition needs
Indicative budgets
Road Corridor
Development Plan 3
Detailed network capacity

expansion profiles
Concept Plans for all roads
Procurement readiness for first
year sub-projects for East
Sumatra & Road Corridor 2
Refined ToR for further Road
Corridor Development Plans
Budgets
1 year
Road Corridor
Development Plan 4
Jakarta Conurbation &

other urban centre
Road Network Plans
3 years
Continued from above
Updated National
Expressway Master Plan II
Informs:
network structure,
1-3 year rolling
program, 4 to 10
years, and 10 to 20
years indicative
Repeat/ update
every 5 years
Road Corridor
Development Plan 5
Road Corridor
Development Plan 6
Road Corridor
Development Plans
5 years

REPORT
57
Step 4 - Adopt Appropriate Design Standards

Critical standards that should be considered are:
Provision of free lanes adjacent to tolled lanes may be needed on some new
expressway sections that are to be tolled and where no existing road can provide
the function of a free alternative.
Need for a full modern road standard for all road widening(that is 7 m or 14 m
carriageway, 80 km/hour design speed and geometry, and 20-40 year design life to
ensure low maintenance needs).
Axle loads for pavement design and bridge loading should be aligned with future
ASEAN and other international standards, such as 11 tonnes or 13 tonnes
maximum axle load.
In low traffic regions guidelines would assist the design of roads appropriate to the
generally low traffic volumes and their future function for instance adopt modern
alignment for future economic growth, initial two lanes later with possible provision to
expand to future expressway standard in the very long term.
Step 5 Define the Expressway Network and Supporting Road Needs
A primary road hierarchy would be defined in each road corridor. The long distance
travel requirement would be catered for by the definition of the expressway network
and its alignment. In most cases, new expressways on new alignments would need to
be identified. Satellite imagery followed up by field work can be used to verify the
likely feasibility of identified new expressway sections in an economical way. In this
way, new investigations can supplement the tolled road network and the arterial roads
identified in the National Spatial Plan. Local distribution roads also need to be
addressed.
The performance of existing arterials is likely to be important as the possible free
alternative if a tolled expressway is to be developed, and for distribution of
expressway traffic. It would be also necessary to identify which existing roads are
actually performing the major arterial functions. In some cases, a provincial road may
be performing a key arterial function and may require appropriate upgrading to best
perform it and in the medium term may need to be re-classified as a national road.
The indicative priority of identified expressway sections (i.e. sub-projects) and the
desired initial and long term cross sections should be identified where possible based
on available information on traffic volumes, composition and growth rates. Where
there is sufficient information, these requirements should be translated into road
corridor concept plans so that indicative land acquisition for the entire network at
ultimate development can be identified and approximate budgets determined.
Indicative land acquisition schedules would need to take into account availability of
funding and the vulnerability of expressway sections to encroachment. In green field
situations, land acquisition requirements should be able to be determined quite
precisely through use of the concept plans. However in non-green field areas the
58

REPORT
ANNEXES
subsequent detailed Road Corridor Development Plans would need to identify the land
acquisition needs indicatively and as reliably as possible subject to the outcome of
consultations.
The preferred road alignments should be determined on technical grounds in the first
instance, on the availability of road rights of way in provinces and local government
areas, and on consultation with provincial and local officials.
A key policy issue is when and under what circumstances should an expressway be
tolled. The National Road Master Plan does not have to determine what is tolled or
untolled. This matter would be determined during the preparation of the subsequent
Corridor Development Plans.
The output of this step would be the Preliminary National Road Master Plan to be
prepared by DGH-Bipran with technical support.
Step 6 Identify Connections Between Economic Corridors
All economic corridors would have to be linked appropriately. Such links should be
included in Road Corridor Development Plans.
Step 7 Prepare Road Corridor Development Plans
The proposed Road Corridor Development Plans (for each key sub-corridor of the
Economic Corridors) are fundamental for developing realistic rolling investment
programs that fit within a strategic framework. They are the means by which the
desired integrated network of expressways and supporting modern highways (i.e. the
key supporting arterials and collectors) would be developed.
The responsibility for the preparation of the Road Corridor Development Plans belongs
to DGH-Bipran. Bipran would take the work to the pre-feasibility stage of project
preparation. Under current institutional and legal arrangements, DGH-Bipran would
determine the scope for private sector involvement in general terms. Where private
sector involvement is considered desirable (or possible) the project would be
transferred to BPJT for further project preparation and business case development
including detailed determination of the mode of delivery (i.e. whether public or
private) with the aim of taking the project to implementation.
Process for Identification of Capacity Needs
The approach developed makes full use of existing studies and available data. Where
studies are recent and comprehensive (i.e. cover all classes of relevant road and have
the correct geographical scope) then the process of identification of capacity needs
and the associated activities and sub-projects would be straightforward. Where
background studies are not up to date, and data are scarce, more field work, traffic
count data and practical strategic planning would be required. Detailed traffic
modelling would likely only be needed in the vicinity of the Jakarta conurbation and
the other metropolitan centres where complex network effects are likely.

REPORT
59
A capacity expansion profile would be developed for each major road corridor in each
economic corridor and the road investment strategy whereby this is to be achieved, for
example through expressway construction, development of new arterial roads, or
widening of existing roads would be determined by using appropriate threshold traffic
capacities relevant to each class of road for the desired level of service and traffic
composition.
The development strategy would at first be determined using current and forecast
traffic volumes (based on assumed traffic growth rates) and comparing them to the
chosen threshold capacities. In this way, the desired ultimate road cross section could
be determined fairly well in most cases.
Economic evaluation and consideration of non-economic factors would be used to
confirm the most viable or socially desirable road projects and sequence of subprojects. Since the aim is end to end node to node connectivity, appropriate decisions
on sub-project packaging would be required.
The capacity expansion profile for each road corridor in each economic sub-corridor
together with the results of analysis being undertaken on optimal investment
strategies for road preservation (supported by IndII under a separate activity), will
enable the Road Corridor Development Plans to give broad indications of:
The shares of funds which should be allocated on economic grounds to the various
types of road investment (for instance capacity toll road development and land
acquisition needs; arterial road widening; preservation periodic maintenance,
strengthening, reconstruction).
The locations to which the DGH should be giving priority for investment in road
capacity expansion.
The timing of capacity expansion investments in particular to inform the three

rolling programs.
Step 8 Develop a 20 year Likely Financing Budget for Each Corridor

From the capacity expansion profiles for each road corridor a pipeline of sub-projects
and sub-project preparation steps would be identified. From these tasks not only can
the three year rolling program for PBB (and RENSTRA) be developed but also a
comprehensive view of financing needs including investment and recurrent financing
(including viability support for toll roads) for informing future budget requests.
A broad financial assessment of toll road development in the selected corridors will
determine the possibility of involving private funding in expressway network
development. The private funding of road projects must be recognised in preparing
RENSTRA and rolling programs for example, in terms of the need for VGF or to
provide connector roads to the new toll road.
60

REPORT
ANNEXES
Step 9 Prepare Important Sub-Projects for Early Implementation

To ensure Road Corridor Development Plans lead to tangible improvements, it is
considered quite important that preparation of some of the important but more
straightforward sub-projects are carried out for early implementation.
Preparing projects for private sector participation is complex and time consuming and
requires considerable financial resources to complete a transaction via market
sounding, commercial analysis, concession preparation, procurement, and negotiation.
Furthermore, to achieve the appropriate allocation of risk requires national
government via DGH or similar to arrange land acquisition and satisfy all
environmental and social safeguard requirements, so that a successful private sector
tenderer is able to commence implementation immediately. These tasks are the
responsibility of BPJT and since the steps required would be time consuming it would
not be possible to fully prepare a new toll road project (or sub-project) for
implementation within the preparation period of a Road Corridor Development Plan.
3.
Environmental and Social Aspects to be Addressed
In the preparation of the Master Plan and the Road Corridor Development Plans,
environmental and social considerations would need to be appropriately addressed.
3.1.
Environment
The consideration of environment aspects should be conducted in accordance with

State Minister of Environment Regulation no. 11/2006. Specific guidelines for road
project development include:
General Guidelines for Environmental Management in Road Sector
Guidelines for Environmental Management Plan in Road Sector: detailed

mandatory environmental management in pre-construction, construction, and post
construction (operation) stage
Guidelines for Environmental Monitoring Plan in Road Sector: detailed mandatory

environmental monitoring in planning stage, pre-construction, construction, and
post construction (operation) stage including post project evaluation
The above regulation and guidelines are applicable at the project (and sub-project)
level. Although those regulatory frameworks have afforded some protection to the
environment, it is inadequate for environmental consideration at the plans, strategies
and policies level. Article 14 of Act no. 32 Year 2009 regarding Environmental
Protection and Management suggested the national or local government to implement
the Strategic Environmental Assessment (SEA) for each proposed project development
at the plans, strategies and policies level.

REPORT
61
National road investments should be planned in safe locations, taking account of

mapped natural hazards such as earthquake, tsunami, floods and landslide risks. The
present hazard maps by the Geology and Mitigation Department, Ministry of Energy
and Mineral Resources will aid the assessment process but the maps need to be
further developed, coordinated and consolidated to provide a complete picture.
3.2.
Gender and Social Considerations
Particularly in rural areas, good connectivity can provide accessibility to employment

opportunities or business opportunities to people. For example, when home-work
travel time is shortened parents can adjust working hours to suit, allowing the family
income and standard of living to increase, as well as the productivity of the area. It can
also allow mothers to participate in the workforce before their children become
independent. These aspects should be considered in the economic or non-quantifieds
analysis of a road project. On the other hand, adverse impacts from improving national
roads connectivity can include the severance of communities, reduction of productive
land and income.
Where International Financial Institutions or bilateral donors are involved their
environmental and social safeguards policies may also have to be satisfied.
62

REPORT
ANNEXES
REFERENCES
Asian Development Bank, Japan Bank for International Cooperation & the World Bank
(2005) Connecting East Asia: A New Framework for Infrastructure.
Coordinating Ministry for Economic Affairs (2011), Masterplan Acceleration and
Expansion of Indonesia Economic Development 2011 2025. (Masterplan Percepatan
dan Perluasan Pembangunan Ekonomi Indonesia MP3EI)
Eric Howard & Associates (2008), Initial Investigation of a Possible AusAID Road Safety
Project in Indonesia. Prepared for AusAid. July.
IndII (2010), Application of Medium-Term Expenditure Framework and Performance
Based Budgeting in Directorate General of Highways Indonesia., prepared for
Indonesia Infrastructure Initiative (IndII) by Paterson, W. and Harahap, G., February.
IndII (2011), DGH Road Development Program Package 2 Activity 206a Technical
Assistance to DGH Various Reports., prepared for Indonesia Infrastructure Initiative
by AECOM Ltd., June.
IndII (2011a), Considerations for Future Support by IndII Phase 2 to the Road Sector in
Indonesia, Working paper of Indonesia Infrastructure Initiative for AusAID, August.
JARNS (2001). Java Arterial Road Network Study, Final Report, prepared for Ministry
of Public Works, IBRD Loan 3913 IND, October.
MARS (2010). The Establishment of a Master Plan for the Arterial Road Network in
Sumatra Island, Final Report, prepared for Korea International Cooperation Agency
and Ministry of Public Works, July.
World
Bank
(2010),
Logistics
Performance
Index
Web
Site.
[http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTTRANSPORT/EXTTLF/0,,con
tentMDK:21514122~menuPK:3875957~pagePK:210058~piPK:210062~theSitePK:51543
4,00.html]. Accessed on 20 July.
World Bank (2011), Transport in Indonesia.
[http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/EASTASIAPACIFICEXT/IND
ONESIAINBAHASAEXTN/0,,contentMDK:20458729~isCURL:Y~pagePK:1497618~piPK:21
7854~theSitePK:447244,00.html]. Accessed on 19 September.

REPORT
63

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INDONESIA INFRASTRUCTURE INITIATIVE

FACILITATING INCLUSIVE NATIONAL DEVELOPMENT BY IMPROVED

CHAPTER 2: CHALLENGE FOR NATIONAL CONNECTIVITY ........................................... 9

CHAPTER 3: DEVELOPMENTAL NEEDS ..................................................................... 19

PLANNING FRAMEWORK FOR ROAD NETWORK DEVELOPMENT ................. 19

CHAPTER 4: PROPOSED FRAMEWORK FOR PLANNING DEVELOPMENT OF THE

CURRENT NATIONAL MASTER-PLAN FOR ROAD INFRASTRUCTURE

FORECASTING FUNDING REQUIREMENTS AND OUTCOMES ....................... 35

CHAPTER 5: BUILDING CAPACITY ............................................................................ 44

CHAPTER 6: CONCLUSIONS AND RECOMMENDED ACTIONS .................................... 48

Figure 9: DGH Arterial Road Widening Program 2010-2014 .......................................... 26

Asian Development Bank

Australian Agency for International Development

BAPPENAS Badan Perencanaan dan Pembangunan Nasional (National Agency for

Badan Layanan Umum (General Service Agency)

Badan Pengatur Jalan Tol (Toll Road Regulatory Agency)

Directorate General of Highways

Indonesia Infrastructure Initiative

Indonesian Road Management System

Kementerian Koordinator Bidang Perekonomian (Coordinating Ministry

Monitoring and Evaluation

Ministry of Public Works

Ministry of State-Owned Enterprises

Medium-Term Expenditure Framework (Kerangka Pengeluaran Jangka

Masterplan Percepatan dan Perluasan Pembangunan Ekonomi Indonesia

Performance-Based Budgeting (System)

Rencana Strategis (Strategic Plan)

Rencana Pembangunan Jangka Menengah (Medium Term Development

Rencana Pembangunan Jangka Panjang (Long Term Development Plan)

Rencana Pembangunan Nasional (National Development Plan)

Viability Gap Funding

Masterplan Percepetan dan Perluasan Pembangunan Ekonomi Indonesia (MP3EI),

Trans-regional and metropolitan connectivity is poor and not monitored. Most

The restriction of expressway development to toll roads financed only by the

Road spending priorities need to be linked more directly with national

Proposed Framework for Planning Development of the National Road Network

A pipeline of investment projects for successive five-year periods, staged to

Evaluation of the infrastructure standards and the connectivity delivered in terms

An optimised approach to raising the arterial roads in the corridor to modern

Illustration of Road Corridor Plans

Travel time from Lampung, hours

Funding requirement, IDR trillion

Figure 3: Funding Requirement Forecasts from

Funding Sources, IDR trillion

4. Multi-year funding requirements,

Applying the Road Renewal Strategy

Figure 4: Forecast of Average Annual Funding Requirements on National Roads 2015-2029

Annual Funding Requirement,

Expressway - private funding

Expressway - public funding

Arterial road development

Three observations stand out:

Most of the increased funding would be needed for expressway development,

Findings and Recommendations

An expressway network should be defined as an identifiable network within

An initial long-term master plan for national road infrastructure should be

The preparation of road corridor plans for prioritised corridors should be

A multi-year schedule (of 15-25 years) of unconstrained funding requirements

PPP mechanisms which facilitate substantial public funding contributions

Managerial and technical capacity in the Planning and Programming Division

BPJTs managerial and technical capacity should be strengthened to expedite