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Preparing the Regional Roads Development Project (Financed by the Japan Special Fund)

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Preparing the Regional Roads Development Project (Financed by the Japan Special Fund) Technical Assistance Report Project Number: 38479 March 2008 Republic of Indonesia: Preparing the Regional Roads Development Project (Financed by the Japan Special Fund) The views expressed herein are those of the consultant and do not necessarily represent those of ADB’s members, Board of Directors, Management, or staff, and may be preliminary in nature. CURRENCY EQUIVALENTS (as of 19 February 2008) Currency Unit – Rupiah (Rp) Rp1.00 = $0.00011 $1.00 = Rp9,165 ABBREVIATIONS ADB – Asian Development Bank BAPPENAS – Badan Perencanan Pembangunan Nasional (National Development Planning Agency) BIMP-EAGA – Brunei Darussalam-Indonesia-Malaysia-Philippines-East Association of Southeast Asian Nations Growth Area CBO – community-based organization CIQS – customs, immigration, quarantine and security DGH – Directorate General of Highways EIRR – economic internal rate of return HIV/AIDS – human immunodeficiency virus/acquired immunodeficiency syndrome IPDP – indigenous peoples development plan IPF – indigenous peoples framework km – kilometer km2 – square kilometer KRNDS – Kalimantan Road Network Development Study MOT – Ministry of Transport MPW – Ministry of Public Works NGO – nongovernment organization NPV – net present value NTKH – Northern Trans Kalimantan Highway PPTA – project preparatory technical assistance TA – technical assistance TOR – terms of reference TECHNICAL ASSISTANCE CLASSIFICATION Targeting Classification – General intervention Sector – Transport and communications Subsector – Roads and highways Theme – Sustainable economic growth Subtheme – Fostering physical infrastructure development NOTE In this report, "$" refers to US dollars. Vice President C. Lawrence Greenwood, Jr., Operations Group 2 Director General A. Thapan, Southeast Asia Department (SERD) Director J. Cooney, Infrastructure Division, SERD Team leader R. Valkovic, Senior Transport Specialist, SERD Team members D. Constantin, Counsel, Office of the General Counsel M. Huddleston, Senior Social Development Specialist, Lao Resident Mission, SERD J. Miller, Principal Transport Specialist, SERD A. Samoza, Associate Project Analyst, SERD H. S. Soewartono, Senior Project Officer (Transport), Indonesia Resident Mission, SERD M. Sultana, Social Development Specialist, SERD Map 1 o o 112o 00'E 110 00'E 130 00'E o o 10 00'N South China Sea I N D O N E S I A 10 00'N PROJECT LOCATION PACIFIC OCEAN INDONESIA BRUNEI DARUSSALAM REGIONAL ROADS MALAYSIA HALMAHERA DEVELOPMENT PROJECT 0o 0o KALIMANTAN SULAWESI BANGKA SUMATRA BELITUNG PAPUA BURU SERAM Jakarta J a v a S e a KEPULAUAN ARU SUMBAWA FLORES o J A V A o N 10 00'S BALI TIMOR-LESTE 10 00'S SUMBA TIMOR I N D I A N O C E A N 0 50 100 150 200 250 110 o 00'E 130o 00'E Kilometers o 116 00'E Conservation Area National Capital South China Sea Provincial Capital City/Town National and Strategic Road under the Project Other Road Heart of Borneo Boundary BRUNEI Provincial Boundary DARUSSALAM International Boundary Boundaries are not necessarily authoritative. o o 4 00'N 4 00'N Malinau Tarakan Tanjungselor M A L A Y S I A Tanjungredeb Liku Sambas Aruk Singkawang EAST KALIMANTAN Kerumuk Badau Putussibau Longboh Mempawah o o Pontianak 0 0 Tayan Sintang KALIMANTAN WEST KALIMANTAN Tenggarong Samarinda Muara Teweh Balikpapan CENTRAL KALIMANTAN Ketapang Tanahgrogot Palangkaraya Sampit Pangkalan Bun Barabai Kuala Kapuas SOUTH KALIMANTAN Kotabaru Banjarmasin o o 4 00'S 4 00'S J a v a S e a o 112o 00'E 116 00'E 08-0536 HR o o 108 o 00'E 110 00'E 130 00'E o o 10 00'N I N D O N E S I A 10 00'N South China Sea BRUNEI DARUSSALAM PACIFIC OCEAN INDONESIA MALAYSIA REGIONAL ROADS DEVELOPMENT PROJECT HALMAHERA 0o 0o SUMATRA KALIMANTAN SULAWESI BANGKA BELITUNG SERAM PAPUA Jakarta J a v a S e a SUMBAWA FLORES o J A V A o N 10 00'S BALI 10 00'S TIMOR-LESTE PROJECT LOCATION SUMBA TIMOR I N D I A N O C E A N 0 25 50 75 100 110 o 00'E 130o 00'E Kilometers 112o 00'E Masalembo Is. o 6 00'S Karimun Is. Bawean Is. 6 o 00'S JAKARTA Serang Karawang J a v a S e a Indramayu Labuhan Kandanghaur Bogor Purwakarta Cirebon Pati Panaitan Islands BANTEN Cianjur Brebes Sukabumi Bandung Pekalongan MADURA Kudus Sumenep WEST JAVA Pemalang Lamongan Bangkalan Sapudi Is. Tasikmalaya Semarang Purwodadi Ciamis Salatiga CENTRAL JAVA Gresik Surabaya Pamekasan Raas Is. EAST JAVA Purwokerto S t r a i t of M a d u r a Kebumen Solo Situbondo Klaten Madiun Cilacap Pasuruan o Probolinggo 8 o 00'S 8 00'S J A V A Yogyakarta Bantul Kediri Malang Jember YOGYAKARTA Blitar Banyuwangi Nusa Barung Is. National Capital Provincial Capital City/Town National and Strategic Road under the Project Proposed South Java Coast Strategic Highway Other Road I N D I A N O C E A N Provincial Boundary International Boundary Boundaries are not necessarily authoritative. 0 7 M - 3 7 a 4 0 p b H o o 2 R 108 00'E 112 00'E 1 I. INTRODUCTION 1. During the 2006 country programming mission, the Government of Indonesia (Government) requested technical assistance (TA) to prepare the proposed Regional Roads Development Project for possible Asian Development Bank (ADB) financing. This project preparatory technical assistance (PPTA) was included in ADB’s Country Strategy and Program 2006–2009 for Indonesia.1 The Government’s medium-term strategy for the Ministry of Public Works (MPW) identified road development in less-developed regions, including northern Kalimantan and southern Java, as a priority. After several missions to Indonesia, 2 the Government agreed to the impact, outcome, outputs, implementation arrangements, cost, financing arrangements, and terms of reference (TOR) for the TA. The design and monitoring framework is in Appendix 1. II. ISSUES 2. Indonesia is a middle-income country, with varied development across its provinces and islands. Access to roads is key to the country’s poverty reduction strategy, as improved transport accessibility reduces poverty both directly and indirectly, e.g., through better access to education and health facilities. 3. For medium-term development goals, the Government has committed to raising levels of sustainable economic growth, creating jobs, and accelerating achievement of its millennium development goals. It identifies infrastructure development and investment—including that related to road transport—as critical to meeting these objectives. Improved access to markets, strengthened intermodal integration, enhanced transport networks in less developed and border regions, and advanced regional integration and trade opportunities will result from this Government emphasis on road transport. The Government, through MPW, has given high priority to improving the road system through (i) removal of capacity constraints, (ii) rehabilitation of substandard highways, (iii) development of a sustainable maintenance system to preserve the country’s road system, including increased expenditure, (iv) investment in less developed area road networks, and (v) improved border area connections. 4. Road transport is the dominant mode in Indonesia, meeting 83% of passenger and 70% of freight demand. In recent years, MPW has concentrated major maintenance and rehabilitation on key highways in Java, Sumatra, Kalimantan, and Sulawesi.3 While about 45% of the road network is paved—including more than 75% of the national road system— non-national road network coverage is poor. Road network density is already low nationally at about 0.4 kilometer (km) per 1,000 square kilometers (km2), but is significantly lower in less developed regions.4 There are good road networks in northern Java and in parts of Sumatra, but road conditions in the rest of the country are fair to poor, especially in less developed provinces and border regions. Outside of Java and Sumatra, traffic is generally low on national and provincial roads. 1 The TA concept paper was included as Appendix A8.5, and it first appeared in ADB Business Opportunities on 30 October 2007. 2 Separate missions were fielded between 1 July and 29 August 2007 and 2–13 October 2007 to visit proposed project areas, hold preliminary discussions with the Government, and define the overall scope of the proposed project. 3 Several years of minimal maintenance expenditure after the Asian financial crisis in 1997 caused a major repair backlog, resulting in large neglected sections of the national road network. 4 The road density for Kalimantan is only 0.19 km per 1,000 km2, compared to 0.90 km per 1,000 km2 in Java. 2 5. Road sector development faces several ongoing problems: road maintenance, vehicle overloading, and road safety. Poor interdepartmental coordination and overlapping or ambiguous responsibilities further contribute to ineffective implementation of sector-level programs.5 6. Road maintenance funding for national highways is adequate, but poor maintenance planning and inefficient procedures impact its overall effectiveness. Variable quality of work and supervision for maintenance and new construction reduces the life of road assets that subsequently require higher maintenance expenditure. In addition, the common practice of vehicle overloading accelerates the deterioration of national roads. Recently, an increased number of weighbridge stations have been constructed, but they are relatively ineffective due to improper records, poor management, governance problems, inadequate equipment maintenance, ineffective implementation of traffic regulations, and poor inter- and intra- government cooperation. 7. Road safety is poor due to a rapid increase in vehicle ownership, both two- and four-wheel, on an inadequate road network, which leads to a drastic increase in traffic accidents. Road safety improvement is difficult due to substandard driver education and testing, poor vehicle safety standards, low awareness of accident risks, and limited use of road safety measures in accident-prone locations. 8. Although international donors have been active in Indonesia since 1970s, the Asian Financial Crisis in 1997 and recent decentralization laws have negated many improvements achieved under previous programs. Donor support has continued to the road sector, accounting for about 30% of MPW’s 2007 road budget.
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