The Acquisition of PT MTD CTP Expressway by PT Waskita Toll Road is not created a Competition Concern.

Wednesday, April 18, 2018

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Jakarta (18/4) – Following the assessment since December 2017, finally on April 17, 2018 KPPU issued a opinion that there is no competition concern by the acquisition of PT MTD CTP Expressway by PT Waskita Toll Road.


As known, in May 2017 a subsidiary of this state-owned construction company acquired the concession owners of the construction of Cibitung – Cilincing toll road with about 34 km in distance. The acquisition aims to accelerate the completion of the construction to support the government’s accelerated infrastructure development program.


In its Opinion, KPPU considered that the parties involved in this acquisition are not in the same relevant market, because toll roads owned by the parties are located in different locations. In addition, the characteristics of toll road products are not mutually substitute with other toll roads. In addition, toll road concession industries are highly regulated industries. The role of the regulator, in this case the Toll Road Regulatory Agency, is very dominant. Toll road rates, concession period, and toll road service standards have been determined by BPJT and the Government so that business actors cannot determine their own selling price of their products.


The concession owner of a toll road concession is determined previously by an bidding system by BPJT, so that competition occurs before the business enters into the market or so-called competition for the market. This condition causes no competition in the toll road market.


Based on the above assessment, the KPPU concluded that this acquisition does not create competition concerns on the emergence of unfair competition in the future. However, this Opinion only applies to the acquisition process only. If there is anti-competitive behavior carried out by the parties involved in this acquisition, then the law enforcement process still can be done properly.