Risk in Government’s Estimate for Toll Road: Based on Investors’ Perspective

The government’s estimate for toll road concession award, as a comparator for investors’ bids, has been criticized by investors, as it does not fully include the proper cost of risks. Thus, there is a need to develop a more equitable estimate that considers the risks, both at the project and at the business/corporate level. The study was mainly supported by qualitative data on the probability of occurrences and impact assessment of risks, acquired through interviews with major investors. Probability Impact Matrices were used to identify risks categorized as “high risks.” Findings have indicated that the high and dominant risks are: i) Route/traffic management (lower traffic volume due to changing routes); ii) Overloading (poorly imposing the limitations of heavy vehicles); and iii) Inadequate/inaccurate data in feasibility study documents. Recommendation on the mitigation plan for these risks has been corroborated by both parties, the government, and the investors. Parts of the risk are proposed to be incorporated into the government’s estimate, while other risks should be adequately addressed in specific contract clauses for Indonesia’s PPP scheme