Does Decentralization Matter?

The Effect of Toll-Road Investment on the Decision-

Making Process of Local Transport Infrastructure Projects in Indonesia

I.G.A Andani, L.L Paix Puello, K.T Geurs

Transportation infrastructure investments, such as a toll-road or highway are argued will stimulate economic
development by attracting new activities in their surroundings. Local road projects are also needed to be
constructed to connect those areas to the toll road and thereby improved regional accessibility. However,
in decentralized governance, decision-making on local road investment is conducted on the lower-level
government, while the central government responsible for developing major infrastructure (e.g. toll-roads).
In order to improve the transport system across the regions, effective coordination between central and
local government is essential.
This study aims to examine to which extent decentralization process and major road investment influence
the decision-making of local road investment. A case study of Jakarta – Bandung metropolitan region,
corridor with most rapid growth in Indonesia, where many major toll-road investments have taken place will
be investigated.
Local officials in the regions have been interviewed and filled-in questionnaires to address the decision-
making process, financing scheme, constraints, and stakeholders involved in the development of local
roads around the toll-road gates. Firstly, this paper discusses the initiation of local road investments,
whether toll-road investments have directly induced or have an intermediary effect on the decision-making
of local road investments. Secondly, by using multidimensional analysis, we further assess the performance
of the projects; considering its initiation, characteristic and stakeholders involved.
From the interviews, it reveals that in the development of local access to the toll-road, top-down process
has been adopted and local government follows national plan. However, decentralization system allows
local government to create an economic opportunity around the area of the toll-road. Further analysis still
needs to be done and important results will be presented in TRAIL Conference. In future research, impacts
of the toll-road and its local access on the transport network performance and accessibility will be assessed.

Keyword: decentralization, decision-making, governance, local road, road investment, toll-road