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
Date Written: October 6, 2016
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: Suggested Citation