Legal counsels of the Petitioners, Arrisman and Arifudin, attending the judicial review hearing of Law No. 38 of 2004 on Roads, Monday (26/11) in the Courtroom of the Constitutional Court. Photo by Humas MK/Ifa.

The Constitutional Court (MK) rejected the petition for judicial review of the provision on toll road concession as stated in Article 50 paragraph (6) of Law No. 38/2004 on Roads, Monday (26/11). In the legal considerations, the Court considered that the petition filed by civil servants Taufik Makarao and Abdul Rahman Sabar was not an issue of norm constitutionality, but rather of the implementation of Article 50 paragraph (6) of the Road Law.

In petition No. 15/PUU-XVI/2018, the Petitioners claimed that the phrase "within a certain period of time" in Article 50 paragraph (6) of the Road Law did not have a precise and clear time frame provision related to toll road concessions. This has caused losses to the state and society. Article 50 paragraph (6) of the Road Law reads, "Toll road concession is granted within a certain period of time to fulfill the return on investment and fair profits for toll road business."

In the legal considerations read out by Constitutional Justice Suhartoyo, the Court is of the opinion that by not defining the term of the toll road concession as requested by the Petitioners, legislators basically have considered such various aspects related to toll road concession, such as the investment amount, operation and maintenance costs, revenue predictions, consideration of the ability of toll road users to pay, and factors and levels of investment risk, and financial feasibility, so that the toll road concession terms will differ from one another in accordance with the calculation of the toll road concessions. If legislators determine a certain toll road concession term, for example 20 years as requested by the Petitioners, this can actually lead to non-adaptability of the intended norm in accommodating various situations that may be experienced by business entities and toll road users.

Justice Suhartoyo added, specifically for toll road users, limited concession terms would very likely cause high toll tariffs, which would be hard for the community. In turn, he added, it would also hamper the achievement of public welfare due to road infrastructure inadequacy or expensive tariffs. "For this reason, precisely by not specifically determining the toll road concession term, there is possibility to regulate tariffs that are affordable to the community," he explained.

Whereas regarding the argument that the article potentially causes misuse and embezzlement, the Court considers the toll road concession agreement to be the result of an open bidding. Openness or transparency of a bidding process is a room for public control to reduce the potential for abuse of authority in drafting toll road concession agreements. The Court is of the opinion that as long as the bidding process has been carried out openly, the Government has compiled toll road concession Owner Estimate (OE) and the concession term has also been set in the concession agreement, opportunity for misuse or embezzlement in toll road concession as argued by the Petitioners has been significantly reduced. Even if there is still room for abuse and embezzlement, Justice Suhartoyo added, then this is not due to the norm of Article 50 paragraph (6) of the Road Law, which allows each agreement to set the toll road concession term, but it rests on compliance, consistence, and supervision by the Government on the procurement and implementation of toll road concession agreements.

“In this context, Article 50 paragraph (6) of the Road Law does not have have constitutional issues. Therefore, the Road Law should not be changed through interpretation by the Court, but the state, [in this case the Government], must improve supervision in the formulation of agreements and their implementation,” Justice Suhartoyo asserted. (Arif/LA/Yuniar Widiastuti)