The Effect of Patimban Access Toll Road on Land Value Increase and Potential Application of Additional Toll Road Business Model as an Opportunity in Land Value Capture
Abstract
Given the current significant increase in toll road construction costs and the considerable investment required for toll roads, a financing mechanism such as Land Value Capture is needed. Generally, Toll Road Business Entities (BUJT) do not consider the potential for land value uplift and value capture around toll road construction, which could be utilised for toll road financing in the future. The case study location for this research is the Patimban Access Toll Road connected to the Cikopo-Palimanan Toll Road at Km 89+400 leading to the Patimban Port. The objective of this study is to estimate land value increases and develop a suitable business model to optimise the potential for Land Value Capture. Currently, there are limitations in research regarding the calculation of increased investment viability through the application of Land Value Capture in toll roads. From the collection of primary and secondary data on land values around the toll road, the data was then calculated using a comparison with similar areas, namely the Difference in Differences method, resulting in an increase in land value of IDR 120.000,- /m² due to the presence of the toll road. To assess the increase in investment viability, a financial analysis method was used, considering the land purchase cost component relative to the increase in land value. There was an increase in the Internal Rate of Return (IRR) in the simulation of additional business models, including industrial area development, Rest Area and Service (TIP) development, billboard utilisation, and fibre optic utilisation on the toll road. This study revealed an increase in investment viability, with the IRR parameter changing from 12,30% to 13,20% through the utilisation of Land Value Capture potential on the Patimban Access Toll Road
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