Road infrastructure, such as toll road, is an essential means to achieve economic development and growth in Indonesia as it improves the mobility and accessibility of people and goods. The availability of financing from the private sector enables the acceleration of the building of infrastructure in Indonesia, and massive toll road projects across the archipelago are being planned. However, although the socio-economic benefits of toll roads have been widely studied and proven, the costs have not been much discussed. The few existing studies on the costs of toll roads show that benefits of toll roads are concentrated near the new infrastructure and therefore toll roads may hurt economic activities in hinterland cities. In the context of Indonesia, are there areas experiencing the “Radiator Springs” phenomenon? Martin Siyaranamual (Department of Economics, Universitas Padjadjaran) discussed his research on this topic using the case of Cipali toll road at FKP on 18 February 2020 hosted by BI Institute.

Martin Siyaranamual during his presentation

In this study, Siyaranamual examined the condition of the hinterland cities (cities which used to be on the main thoroughfare before the Cipali toll road was built). However, given that the toll road was built, it is difficult to assess what would have been the impact to these hinterland cities if the toll road had not been built. To assess this scenario, Siyaranamual compared the development of the hinterland cities with those in similar cities in Java which are also not located near a toll road.

In conducting his study, Siyaranamual used data from Google Maps and BPS’ Potensi Desa from 2014 and 2018. The study focuses on two variables: the number of business establishments and the number of households living in slum areas. The study is still in progress, but there are some preliminary findings. Firstly, the new Cipali toll road does not bring a significant change in the number of SMEs and traditional markets, nor does it have any impacts on the number of restaurants and hotels in the hinterland cities. Secondly, the new toll road brings a negative impact on the number of shops in areas where vehicles used to pass through before the Cipali toll was built. This was precisely what happened in the movie Cars: shops and businesses in the town of Radiator Springs closed after a new highway was built and traffic was diverted away from the town. Findings from the study indicate that the “Radiator Springs” phenomenon is evident in Indonesia. Finally, the researcher recommends that the government and stakeholders of toll road projects pay more attention to the unintended consequences of the projects and minimize the negative impacts.

For the complete presentation and Q&A session, please refer to the video and materials provided.