China Eximbank provides $160.2 million preferential buyer's credit loan for Surabaya-Madura Island Bridge (linked to #61205)

In June 2004, China Exim Bank and the Government Indonesia signed a memorandum of understanding regarding a loan for the Surabaya-Madura Island Bridge Construction Project. Then, on November 5, 2004, China Eximbank and the Government of Indonesia signed a $160.2 million preferential buyer’s credit (PBC) agreement (#BLA04082) for the Surabaya-Madura Island Bridge Construction Project. The PBC carried the following borrowing terms: a maturity of 15 years, a grace period of 7 years, and an interest rate of 3%. The proceeds from the PBC were to be used by the borrower to partially finance an EPC contract with China Road and Bridge Corporation (CRBC), which was signed on September 24, 2004. Then, on November 5, 2005, China Eximbank provided an additional $68.9 million to the Government of Indonesia for the Surabaya-Madura Island Bridge Construction Project through an amendment to the PBC agreement that became effective on September 13, 2005 (captured in Project ID#61205). The additional PBC proceeds were to be used by the borrower to partially finance a supplemental commercial (EPC) contract worth $83.453 million between CRBC and the Ministry of Public Works of Indonesia, which was signed on July 9, 2008. The purpose of the project was to construct the 5.4 kilometer long, 30 meter wide bridge linking the city of Suramadu with Madura Island (exact locational coordinates: 7°11′3″S 112°46′49″E). It is the first bridge to cross the Madura Strait. The cable-stayed portion has three spans with lengths 192 meters (630 ft), 434 meters (1,424 ft), and 192 meters (630 ft). The bridge has two lanes in each direction plus an emergency lane and a dedicated lane for motorcycles in each direction. CRBC was the general (EPC) contractor responsible for implementation. However, China Harbor Engineering Co. Ltd. and a consortium of Indonesian companies, PT Adhi Karya and PT Waskita Karya, were also involved in implementation (most likely as subcontractors). Construction began on November 19, 2005. The main span of Suramadu Bridge linking Surabaya in East Java mainland and Madura Island was connected successfully at midnight local time on Tuesday, March 31, 2009. The bridge was officially open to traffic on June 10, 2009. Within a week of the opening, it was discovered that nuts and bolts as well as maintenance lamps had been stolen and that there was evidence of vandalism of cables supporting the main span. As is often the case with public sector infrastructure facilities in Indonesia, there has been pressure to keep the tariffs for use of the bridge low. Tolls were initially set at Rp30,000 (USD $3 in 2009) for four-wheeled vehicles and Rp3,000 (USD $0.30) for two-wheelers. However, in early 2016, it was announced that President Jokowi favored a 50% cut in the tolls to help promote the competitiveness of industries on the Madura side of the bridge. On October 27, 2018, toll tariffs were abolished for all types of vehicles.

Additional details

1. This project is also known as the Suramadu Bridge Project or the Surabaya-Madura Bridge Project. The Chinese project title is 泗水－马都拉大桥 or 印尼泗水-马都拉大桥项目. 2. The China Eximbank loan that supported this project is not included in the Overseas Development Finance Dataset that Boston University’s Global Development Policy Center published in December 2020.

Number of official sources

15

Number of total sources

29