The Financial Model of Land Lease Accelerating Toll Road Land Acquisition – A Critical Success Evaluation

2016 International Conference in Environmental and Civil Engineering Technology (ENVICET'2016)

5 Pages Posted: 3 Jun 2019

See all articles by Yusuf Latief

Yusuf Latief

University of Indonesia (UI) - Civil Engineering Department

Lukas B. Sihombing

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

Ayomi D. Rarasati

affiliation not provided to SSRN

Andreas Wibowo

affiliation not provided to SSRN

Date Written: October 6, 2016

Abstract

One of the largest impediments to toll road development is land acquisition. In an ideal perspective, the required land should be acquired before a toll road project begins. However, the reality often does not meet the expectation. The government, which should accept the liability in the first place, often finds it difficult to afford it. Given the stringent budget constraints of the government, project sponsors, for many reasons, should not be expected to take on the full responsibility of dealing with it either. Innovative instruments other than that practiced now must be fostered. In this paper, a discourse on the application of a land lease model is provided. This has been widely used in many other countries, and a set of success factors has been identified to make this model work in Indonesia. A total of 23 critical success factors (CSFs) have been identified from a literature review. A Delphi survey involving a panel of knowledgeable experts was employed to examine toll road authority, guarantee institution, and private investor group variables. Based on the survey, it has been found that the quality of land lease data, the design plan and integrated location, the transparent negotiation on an investment agreement, as well as agreements negotiated to protect private investors and the government were the most important CSFs.

Keywords: Financial Innovation, Land Leases, Indonesian Toll Roads, Critical Success Factors

JEL Classification: G23, R42, R51

Suggested Citation

Latief, Yusuf and Sihombing, Lukas B. and Rarasati, Ayomi D. and Wibowo, Andreas, The Financial Model of Land Lease Accelerating Toll Road Land Acquisition – A Critical Success Evaluation (October 6, 2016). 2016 International Conference in Environmental and Civil Engineering Technology (ENVICET'2016), Available at SSRN: https://ssrn.com/abstract=3386176

Yusuf Latief

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

Depok, 16424
Indonesia

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

Ayomi D. Rarasati

affiliation not provided to SSRN

Andreas Wibowo

affiliation not provided to SSRN

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