Analysis of Strategies to Improve the Financial Feasibility of the Rantauprapat–Kisaran Toll Road Section

Nindyonawi Pradipto; I Putu Artama  Wiguna

doi:10.37899/journallamultiapp.v7i4.5093

Nindyonawi Pradipto Institut Teknologi Sepuluh Nopember, Indonesia
I Putu Artama Wiguna Institut Teknologi Sepuluh Nopember, Indonesia

DOI: https://doi.org/10.37899/journallamultiapp.v7i4.5093

Keywords: Sensitivity Analysis, Discounted Cash Flow, Toll Road, Financial Feasibility, Viability Gap Funding

Abstract

The Rantauprapat–Kisaran Toll Road is a strategic part of the Trans-Sumatra corridor that supports connectivity and regional economic development in North Sumatra, Indonesia. However, the baseline financial analysis indicates that the project is not financially feasible, with a Financial Internal Rate of Return (FIRR) of 8.351%, a negative Net Present Value (NPV) of IDR 3,971 billion, and a Payback Period (PP) of 15.95 years. This study aims to identify appropriate strategies for improving project feasibility and assess the sensitivity of financial indicators to key parameters. A quantitative descriptive case study was conducted using Discounted Cash Flow modeling. Financial feasibility was evaluated through NPV, FIRR, and PP, while alternative strategies were assessed using single and combined scenarios involving tariff adjustments, CAPEX and O&M efficiencies, financing optimization, and Viability Gap Funding (VGF). The findings show that no single strategy satisfies all feasibility criteria. Achieving the minimum FIRR would require a tariff increase of 123.45%, VGF support of 62.84% of project costs, or CAPEX and O&M reductions of 56.91%. The optimal combination consists of 10% VGF support, CAPEX and O&M efficiencies, and a financing structure of 70% debt and 30% equity. This scenario produces an FIRR of 11.72%, a WACC of 7.56%, an NPV of IDR 12,658 billion, and a PP of 11.84 years. Sensitivity analysis identifies revenue and CAPEX as the most critical variables, highlighting the importance of revenue assurance and effective cost control.

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