ANALYSIS OF CONTRACT ESCALATION CALCULATIONS DUE TO INCREASING INDUSTRIAL SOLAR FUEL PRICES RELATED TO THE INDEX USED (CASE STUDY OF THE SIGLI – BANDA ACEH TOLL ROAD PROJECT)

• Main Author: Azmi, Nasril
• Format: Theses
• Language: Indonesia
• Subjects: Teknik sipil
• Online Access: https://digilib.itb.ac.id/gdl/view/84804
• Institution: Institut Teknologi Bandung

The development of road network systems in Indonesia is rapidly progressing in line with the fulfillment of basic needs to connect the mobility of the community and businesses with workplaces, public services, and markets to reduce logistics costs and stimulate industrial growth in Indonesia. However, currently, construction projects, especially toll road projects with high construction costs, face fluctuations in fuel prices as one of the main materials that sharply increase in a short period. For example, the industrial diesel fuel, which is quite dominant in toll road construction projects, increased significantly by 61%, from Rp.14,550/ltr in January 2022 to Rp. 23,450/ltr in September 2022. These fluctuations are likely to continue to increase, thus affecting multi-year projects. The sharp increase in fluctuating prices significantly impacts construction costs, potentially eroding profit targets and even causing harm to toll road construction service providers. This significant increase is not reflected in the movement of the Consumer Price Index (CPI) and the Wholesale Price Index (WPI) for the Building/Construction Group in Indonesia According to the Building Group released periodically by the Central Statistics Agency (BPS) every month, so the escalation value is unable to protect existing contract values. This impact needs to be mitigated by calculating adjustments to the contract value affected by fuel price fluctuations.