||The proposed project will rehabilitate sections of national and strategic roads to strengthen domestic connectivity in select provinces of East and West Kalimantan, and West, Central, and East Java. Some road sections will be the missing links and extensions of the ongoing Regional Roads Development Project. The project is expected to bring inclusive development for areas that are presently not well-connected to major population centers, improve access to basic social and health services, improve global and national food security by stimulating local agro-industry and boosting exports futher, serve as a magnet for private sector investment, and extend better regional connectivity to neighboring countries, as well as to improve inter-island connectivity. It is expected that the project will directly benefit road users annually and help life living standards in 6 provinces, with a total population of 111.4 million people
|Project Rationale and Linkage to Country/Regional Strategy
1. Indonesia is an archipelago with more than 17,000 islands. It relies heavily on transport connections to link the islands and regions together. Though the larger islands have extensive road dominated internal transport systems, the network still is incomplete, fragmented and poorly maintained for internal travel. The poor condition of many roads, caused by insufficient maintenance and overloaded trucks, also leads to a high operating costs and high incidence of accidents and loss of life.
2. The lack of transport sector investment over the past decade has resulted in increased transportation cost and an erosion of Indonesia's competiveness. Chronic under-investment in transport infrastructure remains one of Indonesia's critical development constraints . Sustained longer term funding of transport infrastructure at 5% of gross domestic product will be needed to close the infrastructure supply gap. In the past this has meant exclusively public funding. Around 2005, the Government realized that it alone could not finance the volume of investment required and called for increased private infrastructure investment through private sector participation and public-private partnership (PPP) projects. However, attempts to get the private sector to invest in the construction and management of transport infrastructure have so far been largely unsuccessful. ADB is assisting PPP aspects through ongoing Infrastructure Reform Sector Development Program .
3. The Government's national transport strategy growth is guided overall by Systranas . The RPJMN for the period from 2010 to 2014 emphasizes enhanced domestic connectivity through major infrastructure development and transport sector reforms. The specific objectives for transport sector development are to: (i) improve capacity of transport infrastructure and to reduce backlogs and bottlenecks in transport services; (ii) develop integrated, intermodal and inter-island transport as recommended in the blueprint of multimodal transport (to achieve a 90% stable road network, to increase domestic sea transport market share by 100%, to increase market shares of railway freight by 7% and passenger market shares by 23%); (iii) to improve accessibility to transport infrastructure and services (to improve pioneer transport services in remote areas are to provide transport services for low income people through public service operation schemes); (iv) to improve the level of transport safety (to reduce transport accidents by 50% by 2014); (v) to conduct institutional restructuring; and (vi) to contribute to climate change adaptation and mitigation efforts (to develop eco-airports and eco-ports, and to reduce use of private vehicles in major cities) . Achievement of these objectives relies on adequate funding out of the APBN budget.
4. Roads account for majority of the freight (70%) and interurban passenger land transport (82%), hence their coverage and condition is crucial to economic growth and social development. About one-third of all vehicle travel is made on national road network. Road travel speeds remain low, averaging 42 kilometers (km) per hour on the national road network. These low speeds reflect poor geometric road standards in terrains especially hilly terrains, combined with poor traffic management, and the proximity of ribbon development and other land use issues along road rights of way. To keep pace with rising demand, road capacity, traffic management, connectivity, and improvements are urgently needed. Road safety is a particular concern as traffic accidents are one of highest causes of death in Indonesia, and Indonesia has one of the highest levels of accidents among countries in the Association of Southeast Asian Nations. The Government is also reviewing its own regulations related to road maintenance and axle load control.