Economist calls for subway postponement<\/p>\n
JAKARTA (JP): The city administration's ambitious US$1.5
\nbillion Fatmawati-Kota subway project received strong opposition
\nfrom a noted economist on Tuesday.<\/p>\n
Sri Mulyani of the University of Indonesia's Institute for the
\nDevelopment of Economy and Management (LPEM-UI) suggested the
\ncity administration should postpone the project, saying it was
\nnot an urgent scheme for the city's development program.<\/p>\n
"The city administration has no sense of crisis if it
\ncontinues with the project," Mulyani said after a seminar on
\npeople's economic empowerment at City Hall.<\/p>\n
"The city administration should also be careful with the
\nspecial yen loan which was offered to finance the project."<\/p>\n
She said the Japanese government had its own interests in the
\nconstruction project as city administration would have to include
\ntheir suppliers and construction companies in it.<\/p>\n
"This project will involve a huge amount of money. It will
\nonly be a heavy burden to the city administration in the short
\nterm," she said.<\/p>\n
However, she acknowledged that Jakarta needed a mass rapid
\ntransit system, including the subway project, to settle the
\ntraffic problems.<\/p>\n
Vice President Megawati Soekarnoputri gave her approval to the
\nsubway project after Governor Sutiyoso met with her last week at
\nher residence in Kebagusan subdistrict, South Jakarta.<\/p>\n
The 15-kilometer project, which will begin from Jl. Fatmawati
\nin South Jakarta to the Kota area in West Jakarta, will continue
\nconstruction in 2001 after it was postponed in 1997 due to the
\neconomic crisis.<\/p>\n
The Japanese government is financing the project with a
\nspecial yen loan, which has a 0.75 percent annual interest rate
\nand a maturity period of 40 years, including a ten-year grace
\nperiod.<\/p>\n
The memorandum of understanding (MOU) of the project was
\nsigned in 1995 between the central government, the city
\nadministration and an Indonesian-Japanese-European consortium.<\/p>\n
The consortium includes Japanese companies led by the Itochu
\nCorp., European firms led by Ferrostaal AG of Germany and
\nIndonesian firms led by PT Citra Lamtorogung, PT Bukaka Teknik
\nUtama, PT Bakrie Investindo, PT Pembangunan Jaya, PT Lippo, PT
\nSuhamthabie and PT Steady Safe.<\/p>\n
Chairman of the Indonesian Transportation Society (MTI) Suyono
\nDikun said recently that the infrastructure of the project should
\nbe financed by the government, while the operational costs should
\nbe covered by private investors.<\/p>\n
An executive of the National Development Planning Board
\n(Bappenas), Ali Imron, said last Wednesday that former president
\nB.J. Habibie agreed to continue the project and asked the
\nJapanese government to disburse the loan.<\/p>\n
"But the World Bank later sent a letter signed by its country
\ndirector Dennis de Tray, expressing their disagreement and asking
\nthe Indonesian government to review the project," Imron said.
\n(jun)<\/p>",
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