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Bali Toll Roads Hit a Roadblock?

Malaysian Developers Discover a Daunting Bureaucracy May Scuttle Plans for Toll Roads in South Bali.

(7/7/2008) Initial approaches by a group of Malaysian investors to build a number of toll road projects in Bali may have come to a sudden halt due to regulatory and bureaucratic restrictions. Tempo Interaktif reports that the plan of Malaysia Datuk Khalid, the husband of singing star Siti Nurhaliza, to build and operate toll roads connecting Sanur beach Tanjung Benoa and Ngurah Rai Airport Nusa Dua has run afoul due to procedural rules governing such a project. [See: Malaysian Business Group Offers to Build Nusa Dua Bridge]

The Head of the Bali Planning Board, Wayan Subagiartha, told Tempo that the complicated procedural steps presented to the Malaysian investors during a recent technical meeting may have the effect of halting the road-building projects before it even begins. "The main roadblocks are represented by the complex permits needed to construct the highway and the requirement to change the function of a local mangrove forests," said Subagiartha.

He further explained that permission to build a toll road can only be granted by the National Toll Road Authority. Moreover, current regulations do not allow the direct appointment requested by the Malaysian group to build and operate the proposed roads; stipulating instead that such an appointment can only be accomplished through an open tender process. This procedure is a requirement of the National government and cannot be overridden or bypassed by the provincial government of Bali.

The plan submitted by the Malaysian consortium of investors, including Gridcomm Shd Berhad and Isyoda Corporation Berhad, provides for four toll roads for Bali. The main 7.5 km long toll road would connect Suwung (Sanur) and Tanjung Benoa, cutting the traveling time between Sanur and Nusa Dua from 45-60 minutes to less than 15 minutes. A second road project advanced by the Consortium would connect Bali's Ngurah Rai and Nusa Dua via a 4.5 km toll road. A third part of the group's proposal provides for cloverleaf elevated access roads to be built at the Dewa Ruci Statue (Simpang Siur) and at the Ngurah Rai Statue at Bali's airport.

The entire cost of the roads the Malaysian group seeks to build in Bali equal Rp. 4.103 trillion (US$443.6 million).

In addition to the problems posed by the mandated open bidding system for the selection of the contractor and operator of the project, there is the additional problem of converting mangrove forest areas - an area under the protection of the Indonesian Forestry Department. In the past, Bali environmental groups have been steadfast in their opposition to any construction that seeks to alter or invade areas designated for mangrove forests.

The recent technical meeting also surfaced additional objections to the toll road connecting the airport and Nusa Dua from Bali's airport authority who say the proposed elevated highway would interfere with safe airport operations.

Tempo Interaktif also reports that when the 7.5 km elevated highway connecting Sanur and Tanjung Benoa was put out to tender by the Department of Public Works at a estimated cost of Rp. 800 billion (US$86.5 million) in 2006, no companies could be found expressing even an interest in undertaking the project.