Sunday, September 27, 2009

Indonesia To Raise Toll-Road Tariffs By 23.2% On Average From Monday

Compiled from Reuters and

The Indonesian government will raise tariffs on 10 toll roads in Java and Sumatra by an average of 23.2% starting Monday, an official said.

The tariff adjustment, done every two years, is based on inflation rates in the past two years, Nurdin Manurung, the head of the toll-road regulator, told reporters.

Regulations allow toll-road tariffs to be increased to attract investments in new turnpike projects.

Listed state-owned PT Jasa Marga (JSMR.JK) is the country's main toll operator.

Indonesia's state toll road agency (BPJT) Chairman Nurdin Manurung said the higher tariffs, which are in line with an earlier announcement, would be applied to 14 toll roads.

Analysts have warned the toll hikes combined with expected increases of liquefied petroleum gas (LPG) prices, electricity tariffs, and higher commodity prices next year, would increase inflationary pressure in coming months.

Faced with growing inflationary pressures, analysts expect Bank Indonesia, to hold its key rate, the BI rate BIPG, steady for the remainder of this year.

"Starting October, the increase in tariffs would start to have an impact," said Aldian Taloputra, an economist at Mandiri Sekuritas.

"Next year commodity prices will be higher, and the government also plans to increase administered prices...We expect Bank Indonesia to stand pat (on rates) this year, and to increase the BI rate by 25 basis points next year," he added.