Jasa Marga Update FY 2016 1 List of Content 3 Company in Brief 9 Toll Road Industry in Indonesia 12 Jasa Marga’s Strategic Projects 18 Funding Strategy 22 Financial Highlights 2 I COMPANY IN BRIEF Proven Track Record in Indonesian Toll Road Business Leading toll road operator in Indonesia with 38 years of experience. Start 1978 1983 1984 1986 1987 1988 1990 1991 1998 2001 2003 2009 2011 2013 2014 2015 2016 Operation BORR (Section 2 & 3)(2) Jagorawi Cipularang JORR W2 North Surabaya- Padaleunyi Palikanci (4) (Section 1-4)(2) Gempol- Gempol (2) Jakarta- Surabaya- Pasuruan Ulujami- Bogor Outer Semarang Cikampek Ring Road Mojokerto Pondok Aren (Section 4)(2) Semarang- Belmera BORR Semarang-Solo Solo(2) Jakarta Outer (Section 1)(2) (Section 2)(2) Ring Road Cengkareng- Jakarta-Tangerang (2) (JORR) Gempol- Kunciran (2) Surabaya-Mojokerto Pandaan Kunciran-Serpong(2) Prof. Dr. Ir. (Section 1A)(2) Sedyatmo Jakarta Inner Surabaya-Mojokerto(2) Ring Road (JIRR) Toll Road (1) Semarang-Solo BORR Medan-Kualanamu- Concessions (2) Tebing Tinggi(2) (Section 1)(2) (Section 2A) Solo-Ngawi(2) Ngawi-Kertosono(2) Nusa Dua-Ngurah Rai-Benoa(2) Cinere-Serpong(2) Semarang-Batang(2) Pandaan-Malang(2) Balikpapan-Samarinda(2) Manado-Bitung(2) Jakarta-Cikampek II Elevated(2) Number of 1 2 4 6 7 8 9 10 11 12 13 14 16 17 18 19 19 31 Concessions Total Length (km) under Corresponding 59 84 131 223 246 329 394 437 463 469 527 531 544 554 576 590 593 1.260 Concessions(3) Note: (1) Jakarta Inner Ring Road (JIRR) is comprised of the Cawang-Tomang-Pluit concession granted to Jasa Marga and Cawang-Tanjung Priok-Pluit concession granted to CMNP. (2) Jasa Marga’s newly acquired toll road concessions. (3) The cumulative length of road represents the current total road length that corresponds to key toll road concessions in this table, not to the year where the concession started. 4 (4) Porong-Gempol Section (5 km) within Surabaya-Gempol Toll Road has officially been closed due to force majeure (mud) since 2006. Asian Longest Toll Road Concessions . Granted all 13 concessions for operating toll roads for a 40-year period in 2005(1). Executed 45-year concessions for 3 new toll roads in 2006 (Bogor Outer Ring Road, Semarang-Solo and Gempol-Pasuruan); 35- year concessions for 2 new toll roads in 2008 and 2009 (Cengkareng-Kunciran and Kunciran Serpong); 42-year concessions for 1 acquired toll roads in 2009 (Surabaya-Mojokerto) and 37-year concessions in 2011 (Gempol-Pandaan); 45-year concessions for 1 new toll road in 2011 (Nusa Dua-Ngurah Rai-Benoa); 40-year concessions for 1 new toll road in 2014 (Medan-Kualanamu- Tebing Tinggi), 35-year concessions for 3 acquired toll roads in 2015 (Solo-Ngawi, Ngawi-Kertosono and Cinere-Serpong), 4 new toll road in 2016 with 45-year concessions (Batang-Semarang and Jakarta-Cikampek II Elevated), 35-year concessions (Pandaan- Malang) and 40-year concession (Balikpapan-Samarinda and Manado-Bitung). Concession years exhausted Concession years remaining 5 Company Structure Government Shareholding Structure of Indonesia Regulatory Framework (“GOI”) Foreign 15% Ministry of Public Works Individual Ministry of State- Minister of (“MPW”) 4% Owned Enterprises Public Works (“MSOE”) Domestic Government Institution 70% 70% 8% Directorate General Ownership Road Network Granting & of Highways Mutual Supervising Toll Indonesian Toll Road Planning & Setting of Road concessions Authority (“BPJT”) Fund Technical 3% Specifications 30% Ownership Concession Concession Agreement Agreement Since 12 Nov 2007 Public Private Toll Road Investors Private Toll Road Investors Private Toll Road Investors 6 The Largest Toll Road Operator in Indonesia Strait of NORTH SUMATERA : in Operation Malacca. Belmera: 42.70 km . Medan-Kualanamu-Tebing Tinggi: 61.70 km EAST KALIMANTAN : in land acquisition . Balikpapan-Samarinda: 99.35 km and construction GREATER JAKARTA & WEST JAVA . Jagorawi: 59.00 km SUMATRA MALUKU . Jakarta-Tangerang: 33.00 km . Ulujami-Pondok Aren: 5.55 km NORTH SULAWESI . Jakarta Inner Ring Road: 23.55 km SULAWESI . Manado-Bitung: 39.9 km . Prof. Dr. Ir. Sedyatmo: 14.30 km KALIMANTAN Jakarta-Cikampek: 83.00 km PAPUA . EAST JAVA . JORR: 28.3 km Java Sea . Surabaya-Gempol: 49.00 km . Cikampek-Padalarang: 58.50 km Banda Sea . Gempol-Pandaan: 13.61 km . Padalarang-Cileunyi: 64.40 km . Gempol-Pasuruan: 34.15 km . Palikanci: 26.30 km JAVA . Surabaya-Mojokerto: 36.27 km . JORR W2 North: 7.70 km BALI Timor. SeaPandaan-Malang: 37.62 km . Bogor Outer Ring Road: 11.00 km . Cengkareng-Kunciran: 14.19 km IndianCENTRAL Ocean JAVA BALI . Kunciran-Serpong: 11.19 km . Semarang: 24.75 km . Nusa Dua-Ngurah Rai-Benoa: 10.00 km . Cinere-Serpong: 10.14 km . Semarang-Solo: 72.64 km . Jakarta-Cikampek II Elevated: 36.4 km . Solo-Ngawi: 90.1 km . Ngawi-Kertosono: 87.02 km . Semarang-Batang: 75 km Concession Rights (km) 1,260 MARKET SHARE 987 799 738 738 61% 80% 593 km Toll Road in Transactions volume 7 2012 2013 2014 2015 2016 Operation Transaction Volume and Toll Revenues 2011-2016 GREATER JAKARTA AND WEST JAVA TOP 5 Contributor 2016 6,891 Revenue 6,282 17.8% 17.0% 5,907 15.5% 5,130 5,268 12.7% 8.8% Toll Revenue Transaction 1,045 1,088 1,121 1,095 1,127 Jagorawi Purbaleunyi Cengkareng PT Jalantol PT Cawang-Tomang- 2012 2013 2014 2015 2016 Jakarta-Cikampek Lingkarluar Jakarta Lingkarluar NON GREATER JAKARTA AND WEST JAVA 21.7% Traffic 1,036 16.3% 839 15.3% 739 10.4% 9.6% 534 Toll Revenue 452 Transaction 198 216 234 156 176 Jagorawi Jakarta- Jakarta- Cikampek Cawang- Tomang- Tangerang Ring Road Ring 2012 2013 2014 2015 2016 Cengkareng 8 Jakarta Outer Jakarta II TOLL ROAD INDUSTRY IN INDONESIA Toll Road Development Target in Indonesia Factor of Development Government’s Priority Program Indonesia population will be grow rapidly Car sales increase No connectivity 10 Regulation Tariff Initial toll tariff is calculated based on investment feasibility, toll road user’s ability to pay and vehicle operating cost saving. Investment feasibility is calculated based on estimated investment cost and projected revenue during term of the concession. Initial toll tariff is stipulated in concession agreement prior to start of construction. Tariff adjustment is regulated by law, is calculated based on CPI and is adjusted once every two years. Initial toll tariff setup and subsequent adjustment is decided by Minister of Public Works decree. Land Acquisition Land acquisition is Government’s responsibility, is undertaken by Land National Agency Price is determined by independent appraiser based on fair market price. For some projects, Government takes over the land cost. The new land acquisition law carries the following main points: • Fair price is determined through independent appraisal. • Land owner may choose to reject through court, yet court has to decide in 30 days (final). • After transaction process (normal) or by court verdict, project can commence. • Re-settlement is also an option. • The Government should carry out socialization far in advance (transparent). • BPN (National Land Agency) is the only body responsible for land acquisition for public interests. 11 III JASA MARGA’S PROJECT Jasa Marga’s New Projects as of 31 March 2017 Length Investment Cost JSMR Ownership Section Concession Period (km) (Rp trillion) (%) A. Fully Operated 1 Nusa Dua-Ngurah Rai-Benoa (4) 2057 10 2.01 55.0% 2 JORR W2 North (part of JORR) (5) 2044 7.7 2.01 65.0% B. Half Operated 3 Gempol-Pandaan(6) 2049 13.61 1.31 92.2% 4 Bogor Outer Ring Road (1) 2054 11 4 55.0% 5 Semarang-Solo (part of Trans Java) (2) 2055 72.6 7.3 73.9% 6 Surabaya-Mojokerto (part of Trans Java) (3) 2049 36.3 4.03 55.0% 7 Gempol-Pasuruan (part of Trans Java) (7) 2058 34.15 4.17 98.8% C. In Land Acquisition and Construction 8 JORR2 (Cengkareng-Kunciran) 35 years form effective date 14.19 4.98 76.2% 9 JORR2 (Kunciran-Serpong) 35 years form effective date 11.19 2.86 60.0% 10 Medan-Kualanamu-Tebing Tinggi 40 years form effective date 61.7 4.71 55.0% 11 Solo-Ngawi (part of Trans Java) 35 years form effective date 90.1 9.21 60.0% 12 Ngawi-Kertosono (part of Trans Java) 35 years form effective date 87.02 7.05 60.0% 13 JORR2 (Serpong-Cinere) 35 years form effective date 10.14 2.57 55.0% 14 Batang-Semarang (part of Trans Java) 45 years form effective date 75 11.04 60.0% 15 Pandaan-Malang 35 years form effective date 37.62 5.97 60.0% 16 Balikpapan-Samarinda 40 years form effective date 99.35 9.97 55.0% 17 Manado-Bitung 40 years form effective date 39.9 5.12 65.0% 18 Jakarta-Cikampek II Elevated 45 years form effective date 36.4 16.23 80.0% TOTAL 747.97 104.54 Notes: (1) Section 1: Sentul-Kedung Halang (3.85 km) is operated since 23 November 2009; Section 2A: Kedung Halang-Kedung Badak (1.95 km) is operated since 04 June 2014. (2) Section 1: Semarang-Ungaran (10.80 km) is operated since 17 November 2011; Section 2: Ungaran-Bawen (12.30 km) is operated since 04 April 2014. (3) Section 1A: Waru-SeLength (2.30 km) is operated since 05 September 2011, Section 4: Kriyan-Mojokerto is operated since 19 March 2016 (4) Operated since 01 October 2013. (5) Section Kebon Jeruk-Cileduk (5.70 km) is operated since 04 January 2014; Section Cileduk-Ulujami (2.00 km) is operated since 22 July 2014. (6) Section Gempol-Pandaan (13.61 km) is operated since 12 June 2015.