AGO bars Malaysia firm from joining JORR project<\/p>\n
A'an Suryana, The Jakarta Post, Jakarta<\/p>\n
The dream of a Malaysian consortium to be appointed the
\nstrategic investor for developing the long-delayed Jakarta Outer
\nRing Road (JORR) toll road project may be dashed as the Attorney
\nGeneral's Office (AGO) has issued a legal opinion which would
\nappear to bar the consortium from participating.<\/p>\n
\"I have just been informed by Dorodjatun about the decision.
\nThis decision underlines the fact that the consortium has no
\nright to be selected as the preferred strategic partner in the
\nproject,\" Minister of Resettlement and Regional Infrastructure
\nSoenarno told reporters before attending a meeting with
\nlegislators at the House on Wednesday.<\/p>\n
He failed to provide any details.<\/p>\n
Dorodjatun Kuntjoro-Jakti is the coordinating minister for the
\neconomy, and chairs the Financial Sector Policy Committee (FSPC),
\na grouping of senior economic ministers that has the final say on
\nthe country's major corporate and bank restructuring programs.<\/p>\n
The FSPC is responsible for deciding on the fate of the
\nconsortium as regards the project, a decision that will be based
\non the legal opinions of several parties, including the Attorney
\nGeneral's Office and independent lawyers.<\/p>\n
The decision is set to be taken this week, according to a
\ncircular from the FSPC.<\/p>\n
As the Malaysian consortium would most likely be ousted from
\nthe project, Soenarno said that his ministry preferred state-
\nowned told road PT Jasa Marga to be appointed the project
\nexecutor.<\/p>\n
\"I have proposed Jasa Marga to the FSPC,\" Soenarno
\nacknowledged on Wednesday.<\/p>\n
Soenarno, a staunch supporter of Jasa Marga in the dispute,
\nsaid that Jasa Marga was worthy of being selected as the executor
\nas it was financially healthy, as proven by the fact that it
\nbooked profits amounting to Rp 157 billion in 2001.<\/p>\n
The JORR was initially to be developed by three investors, PT
\nCakra Bhakti Margatama Persada, PT Citra Mataram Satriamarga
\nPersada and PT Marga Nurindo Bhakti under a build-operate-
\ntransfer (BOT) scheme.<\/p>\n
The investors borrowed around Rp 1 trillion (US$115 million)
\nfrom local banks to finance the project, but it was canceled in
\n1997 due to the 1997-1998 financial crisis.<\/p>\n
The investors then found themselves unable to repay the banks,
\nwhich forced the Indonesian Bank Restructuring Agency (IBRA) to
\ntake over the loans and the project. IBRA then teamed up with
\nJasa Marga to set up a new company called PT Jalantol Lingkar
\nLuar Jakarta (JLJ) to proceed with the project and find new
\ninvestors.<\/p>\n
Among the investors interested in participating in the
\nproject, only the Malaysian consortium was prepared to meet the
\ngovernment's requirements. Consequently, the government picked
\nthe consortium as the strategic investor.<\/p>\n
The House of Representatives then annulled the government's
\ndecision as the consortium was proposing tolls of Rp 500 per
\nkilometer, which was considered too expensive by the House.<\/p>\n
As the House's decision left the project in limbo, the
\ngovernment then held an open tender to resolve the issue.<\/p>\n
However, the tender was a complete failure as none of the
\nbidders were prepared to meet the government's requirement of
\npaying Rp 1.2 trillion into an escrow account as a sign of their
\nseriousness, plus the need to post a bond of up to US$20 million.<\/p>\n
The FSPC is set to decide this week on whether to select Jasa
\nMarga or the Malaysia consortium to execute the project.<\/p>",
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