The financial model of land lease improving toll road development a delph survey and critical success evaluation

One of the largest impediments to toll road development is land acquisition. In an ideal perspective, the required land should be acquired before a toll road project begins. However, the reality often does not meet the expectation. The government which should accept the liability in the first place, often finds it difficult to afford it. Given the stringent budget constraints of the government, project sponsors, for many reasons should not be expected to take on the full responsibility of dealing with it either. Innovative instruments other than that practiced now must be fostered. In this study, a discourse on the application of a land lease model is provided. This has been widely used in many other countries and a set of success factors has been identified to make this model work in Indonesia. A total of 23 Critical Success Factors (CSFs) have been identified from a literature review. A Delphi survey involving a panel of knowledgeable experts was employed to examine toll road authority, guarantee institution and private investor group variables. Based on the survey, it has been found that the quality of land lease data, the design plan and integrated location, the transparent negotiation on an investment agreement as well as agreements negotiated to protect private investors and the government were the most important CSFs.