Financial Feasibility Study of Binjai – Langsa (Pangkalan Brandan – Langsa Section) Toll Road Project

Abstract : This study evaluates the Financial Feasibility of the Pangkalan Brandan – Langsa Toll Road Section Project. The purpose of this study is to calculate the Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period (PP), Discounted Payback Period, and Profitability Index (PI) for the Pangkalan Brandan – Langsa Toll Road Section Project. The study results show that this project has a positive Net Present Value (NPV) of Rp. 12,773,885,792,000, therefore it is financially feasible. The project also has an Internal Rate of Return (IRR) of 13.26% which is higher than the discount rate of 9.22%, therefore it is financially feasible, and a Payback Period (PP) of 16.4 years and a Discounted Payback Period of 27.7 years which are still within the 50-year concession period, therefore it is financially feasible. Additionally, this project has a Profitability Index (PI) of 2.5190 which is higher than 1, making it financially feasible. In conclusion, the Binjai – Langsa Toll Road Project (Pangkalan Brandan – Langsa Section) is financially feasible. The recommendation given is timely project execution to avoid cost overruns.