A National Policy Framework for Financing District Road Maintenance in Indonesia

The thesis comprises part of a policy initiative within the Indonesian Government to improve district road conditions within the country. This research project has been commissioned by the Directorate General of Highways in Indonesia to seek and develop an appropriate policy framework for financing district road maintenance. The research has been supported by funding from the World Bank.

The premise of this study was that district road maintenance in Indonesia is rarely given adequate consideration in strategic planning. The research examines the root of the problems of road maintenance internationally, and in Indonesia in particular. There are many interconnected problems in managing road maintenance but they can be divided into two main interrelated issues, namely, institutional and financial aspects.

The research focused upon determining the necessary attributes of practical methods to solve road maintenance problems in Indonesia. Three models have been developed to address this problem. They are:

(1) A short-term reform model simplifying the road central grants mechanisms to district authorities. This model was implemented after the Indonesian General Elections in 1999.
(2) A medium term reform model involving creating a series of task forces.
(3) A long-term reform model involving creating a road maintenance fund. This fund would be overseen by a Road Maintenance Board consisting of a mix of representatives from the public and private sectors and would fully involve road users in road network management. The long-term reform model would also move road network management from a government environment to a private sector company environment.

These models have been built as a three-stage approach to solve the problem as a comprehensive package and without omitting one stage from any of the successive models. Each of the models was validated using the views of decision-makers dealing with road maintenance in Indonesia.