FINANCIAL FEASIBILITY STUDY OF TOLL ROAD PROJECT BOGOR – SERPONG VIA PARUNG

• Main Author: Laregan Jota, Astrid
• Format: Final Project
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/40861
• Institution: Institut Teknologi Bandung

Indonesia's economic growth in 2010 to 2015 has been decreased due to the global economic slowdown. Indonesia's economic growth can be increase by increasing the number of commodity exports, household consumptions, and structural changes. The structural changes can form of the development of export-oriented manufacturing industries, massive infrastructure development, and significantly improving the quality of Indonesian human resources. The government allocates the infrastructure development budget in the amount IDR 4,197 trillion for 2015-2019 periods. The government budget is allocated to 46,812 km of roads and bridges along 495,698 meters of both maintenance and reconstruction activities. Government targeted the development of toll road by 1000 km in the end of 2019. Government seek the toll road development is lacking compared to the other country. The available project given by the BPJT is Bogor-Serpong toll road. The Bogor-Serpong toll road has length 36.3 km. The toll road projected to be operated in 2023. The income of the toll road is from the tariff per Km and advertisement. The amount of investment to build the toll road is IDR 8,080,608 million. The toll road will be tendered with 40 years as the concession time, after 40 years the toll road will be the government property. Financial feasibility of Bogor-Serpong toll road determines whether the project is feasible or not from the financial perspective. The capital budgeting techniques used to determine the project are payback period, Net Present Value (NPV), and Internal Rate of Return (IRR). The payback period of Bogor-Serpong toll road is 12 year 9 month and 29 days. The payback period time is indicates that the project is feasible. The NPV of Bogor-Serpong toll road is IDR 15,903,931 million. The value of NPV is positive shows the project is possible. The IRR of Bogor-Serpong toll road is 16%. The IRR value is more than the WACC that is 11.61% which can be categorized as feasible. The sensitive variable for the project is interest rate of long-term debt, inflation rates, and the volume of traffic. The private sector should be aware of the sensitive variable in order to minimize the risk.