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Riau province is offering incentives for the development of
135 kilometers of turnpike connecting Pekanbaru and Dumai so as to
attract more potential investors.
Previously, the provincial government had failed to conclude two deals
for the project, which it is estimated will cost around US$528 million,
due to a lack of bidders.
Riau Province governor Rusli Zainal told The Jakarta Post on Thursday
that the province would provide a total of Rp 150 billion to the
tollway developer for land acquisition purposes.
"The land acquisition fund will be provided jointly by Riau Province,
Pekanbaru city administration, Siak Regency, and Bengkalis and Dumai as
the toll road will provide great benefits to all of these areas," Rusli
said.
In addition, the provincial government had promised it would pay a
subsidy should the revenue from the project fail to cover construction
costs.
"We are confident that with these incentives, more investors will bid
for the tollway project," he said.
In addition to a lack of incentives, few investors had expressed
interest in the project as there is already a 210-kilometer-long public
road connecting Riau and Dumai. Despite not being in prime condition,
traffic on the existing road is rarely disrupted.
Following the offer, Riau Province Promotion and Investment chief
Tionlina Pangaribuan said that one Chinese investor and one local
investor, PT Sari Bangun Persada, had already expressed an interested.
"The Chinese investor is a state company that is active in investing
out of China," she said.
The project is among 50 projects that the provincial government put on
the table at the Riau Investment Summit, which concluded Thursday.
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