Project Financing Models for Toll Road Investments: A State-of-the-Art Literature Review

Civil Engineering and Architecture 6(3): 115-127, 2018

13 Pages Posted: 8 May 2019

See all articles by Lukas B. Sihombing

Lukas B. Sihombing

University of Indonesia (UI) - Faculty of Economic, University of Indonesia (UI) - Department of Civil Engineering

Yusuf Latief

University of Indonesia (UI) - Civil Engineering Department

Ayomi D. Rarasati

affiliation not provided to SSRN

Andreas Wibowo

affiliation not provided to SSRN

Date Written: April 10, 2019

Abstract

In greenfield toll-road projects, financial sustainability has been a major issue. Many toll roads cannot be operated. Although most of Indonesia’s 24 toll road concessions have already been signed by the Toll Road Authority, most of them were caused by financing problems. Three problems have been identified as potential sources of this unsustainability, such as the uncertainty of long-term project revenues, budget constraints provided by the government, and inadequate government support for land acquisitions. This paper aims to investigate the state-of-the-art innovative financing models recently introduced to address financial problems by using a desk study and meta-analysis. The findings are an earmarked tax revenue system, deep discount bonds, take-out financing, tax increment financing, land leases, deferred debts, and private donations.

Keywords: Toll Road, Innovative Financing, Desk Study, Meta-analysis

JEL Classification: G30; R42

Suggested Citation

Sihombing, Lukas B. and Latief, Yusuf and Rarasati, Ayomi D. and Wibowo, Andreas, Project Financing Models for Toll Road Investments: A State-of-the-Art Literature Review (April 10, 2019). Civil Engineering and Architecture 6(3): 115-127, 2018, Available at SSRN: https://ssrn.com/abstract=3369381

Lukas B. Sihombing (Contact Author)

University of Indonesia (UI) - Faculty of Economic, University of Indonesia (UI) - Department of Civil Engineering ( email )

Kampus Baru
Depok, West Java 16424
Indonesia

Yusuf Latief

University of Indonesia (UI) - Civil Engineering Department ( email )

Depok, 16424
Indonesia

Ayomi D. Rarasati

affiliation not provided to SSRN

Andreas Wibowo

affiliation not provided to SSRN

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