How does toll road impact accessibilities, trades, and investments in short term? A case study of Cipali toll road in West Java, Indonesia
Vol 2, Issue 2, 2018
VIEWS - 2030 (Abstract) 1177 (PDF)
Abstract
To increase inter-region connectivity, the Indonesian government initiated infrastructure projects such as toll roads, airport, highways, as well as agriculture ones throughout the countries. One of the big projects in road infrastructure was the Cikampek–Palimanan (Cipali) toll road in West Java with a budget of more than USD1 billion which started to operate in July 2015. This paper is aimed to evaluate the impact of the toll road on accessibilities, trades, and investments in the region it traverses. To carry out the analysis, we used qualitative approach, difference-in-difference approach, and ANOVA, utilizing three kinds of data. The first data is collected from a survey of 331 small-medium enterprises (SMEs) in the logistics and the hotel and restaurant industries. The second one is bank loan data sourced from Bank Indonesia, while the third one is investment data from Investment Coordinating Board of Indonesia (BKPM).
After two years of its operation, Cipali toll road has increased accessibility, mobility, trade, and investment in the region it traverses. The travel time was reduced by 39%, while the cargo volume of the local businesses increased by 30% to 40%. These led to an improvement of wholesale trade volume in almost all regencies. However, SMEs in the hotel and restaurant industry along the traditional northern coastal highway in Subang, Indramayu, and Brebes experienced a decline due to the traffic shifting. Meanwhile, investments from national companies especially those of labor-intensive manufacturing industries flowed significantly especially to Subang and Majalengka, which reflected a “sorting effect”. However, investments from local and foreign businesses did not increase significantly yet after 2.5 years of toll operation.
To reap the benefit from the presence of Cipali toll road, the local governments should improve the ease of doing business to attract investments that boost employment in return. In addition, given a better accessibility from Greater Jakarta and a large number of potential visitors passing through the toll road, local businesses in the trade sector would benefit if they could promote the local attractions such as in tourism activities supported by the local government. The latter strategy should also be implemented by the local governments and local businesses in the northern coastal traditional route to minimize the negative impact of the toll road due to the traffic shifting. This strategy should be strengthened through increasing connectivity from the toll exits to local business areas and through increasing the ease of doing business.
Keywords
Full Text:
PDFReferences
Akpan U (2014). “Impact of regional road infrastructure improvement on intra-regional trade in ECOWAS”. African Development Review, 26(S1): 64–76. doi: 10.1111/1467-8268.12093.
Alder S (2015). “Chinese roads in India: The effect of transport infrastructure on economic development”. Working Paper. Chapel Hill, NC, USA: University of North Carolina at Chapel Hill.
Anas R, Tamin OZ and Wibowo SS (2015). “Applying input-output model to estimate the broader economic benefits of Cipularang Tollroad investment to Bandung District”. Procedia Engineering, 125(2015): 489–497. doi: 10.1016/j.proeng.2015.11.042.
Asian Development Bank (ADB) (2012). “Infrastructure for supporting inclusive growth and poverty reduction in Asia”. Metro Manila, The Philippines: ADB.
Baldwin RE and Okubo T (2006). “Heterogeneous firms, agglomeration and economic geography: Spatial selection and sorting”. Journal of Economic Geography, 6(3): 323–346. doi: 10.1093/jeg/lbi020.
Chandra A and Thompson E (2000). “Does public infrastructure affect economic activity?: Evidence from the rural interstate highway system”. Regional Science and Urban Economics, 30(4): 457–490. doi: 10.1016/S0166-0462(00)00040-5.
Doan PD and Seward LE (2013). Applied statistics in business and economics. Fourth Edition. New York, NY, USA: McGraw Hill.
Duranton G, Morrow PM and Turner MA (2014). “Roads and trade: Evidence from the US”. The Review of Economic Studies, 81(2): 681–724. doi: 10.1093/restud/rdt039.
Faber B (2014). “Trade integration, market size, and industrialization: Evidence from China’s National Trunk Highway System”. The Review of Economic Studies, 81(3): 1046–1070. doi: 10.1093/restud/rdu010.
Gertler PJ, Martinez S, Premand P, et al. (2010). “Impact evaluation in practice”. Washington, DC, USA: World Bank. doi: 10.1596/978-0-8213-8541-8.
Ghani E, Goswami AG and Kerr WR (2014). “Highway to success: The impact of the Golden Quadrilateral project for the location and performance of Indian manufacturing”. The Economic Journal, 126(591): 317–357. doi: 10.1111/ecoj.12207.
Handy S, Kubly S and Oden M (2002). “Economic impacts of highway relief routes on small communities: Case studies from Texas”. Transportation Research Record: Journal of the Transportation Research, 1792: 20–28. doi: 10.3141/1792-03.
Iimi A, Lancelot E, Manelici I, et al. (2015). “Evaluating the social and economic impacts of rural road improvements in the State of Tocantins, Brazil”. Washington, DC, USA: World Bank. doi: 10.1596/1813-9450-7249.
Ismail NW and Mahyideen JM (2015). “The Impact of infrastructure on trade and economic growth in selected economies in Asia”. ADBI Working Paper 553. Tokyo, Japan: Asian Development Bank Institute.
Ivansyah (2014). “Congestion occur in Cirebon, Pantura”. Tempo.co. 31 July, 2014.
Khandker SR, Koolwal GB and Samad HA (2010). Handbook on impact evaluation: Quantitative methods and practices. Washington, DC, USA: World Bank.
Li H, Liu Y and Peng K (2018). “Characterizing the relationship between road infrastructure and local economy using structural equation modeling”. Transport Policy, 61(January 2018): 17–25. doi: 10.1016/j.tranpol.2017.10.002.
McCaston KM (2005). “Tips for collecting, reviewing, and analyzing secondary data”. Atlanta, GA, USA: CARE USA.
Mitsui H (2004). “Impact assessment of large scale transport infrastructure in Northern Vietnam”. Washington, DC, USA: International Bank for Reconstruction and Development, World Bank.
Morten M and Oliveira J (2016). “The effects of roads on trade and migration: Evidence from a planned capital city”. NBER Working Paper. Cambridge, MA, USA: National Bureau of Economic Research.
Polzin SE (1999). “Transportation/land-use relationship: Public transit’s impact on land use”. Journal of Urban Planning and Development, 125(4): 135–151. doi: 10.1061/(ASCE)0733-9488(1999)125:4(135).
Ramdhini L (2015). “Motorists to pay as costs of Cipali toll road soar”. Jakarta Globe. 15 June, 2015.
Ravallion M (2001). “The mystery of the vanishing benefits: An introduction to impact evaluation”. The World Bank Economic Review, 15(1): 115–140. doi: 10.1093/wber/15.1.115.
Sari W (2014). “Project finance in Indonesia: Toll road financing”. Thompson Reuters Practical Law.
Seltman HJ (2012). Experimental design and analysis. Pittsburgh, PA, USA: Carnegie Mellon University.
Sihombing M (2017). (Indonesian) “Tol Trans Jawa: Akhir 2018, Jakarta–Surabaya via tol”. Bisnis Indonesia. 26 September, 2017.
Sumaryono (2013). “Emergency revitalization of northern Java coastal road line”. The Jakarta Post. 3 August, 2013.
Wage W (2014). (Indonesian) “Mudik lebaran 2014: Data jumlah kendaraan melalui Pantura & Jalur Selatan Jawa Barat”. Bisnis Indonesia. 3 August, 2014.
Weisbrod G (2000). Current practices for assessing economic development impacts from transportation investments. Washington, DC, USA: Transportation Research Board.
DOI: https://doi.org/10.24294/jipd.v2i2.673
Refbacks
- There are currently no refbacks.
Copyright (c) 2018 Sulistiyo Kadam Ardiyono, Nurul Pratiwi Andi Parenrengi, Faturachman Faturachman
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
This site is licensed under a Creative Commons Attribution 4.0 International License.