Administration welcomes MOU with Hyundai but says of little use
Ahmad Junaidi, The Jakarta Post, Jakarta
The city administration welcomed on Monday a memorandum of understanding (MOU) between the Land Transportation Owners Association (Organda) and the Hyundai Motor Company of South Korea, but saying that it would take a long time to be realized.
"We have earlier signed several MOUs with bus companies, but until now they could not be realized," Governor Sutiyoso told reporters at City Hall.
He said he signed a MOU with Chinese bus company Dhong Feng last year, but president Abdurrahman Wahid urged him to cancel it.
Sutiyoso said Abdurrahman asked the administration to buy buses from local producer PT Texmaco Perkasa, which signed a MOU with the Organda's city chapter two years ago.
"It's better for Organda to cancel the MOU with Texmaco since it's still unclear whether the company could produce the buses," he said.
PT Texmaco reportedly could not start its production since no banks were willing to finance the bus production, although last year, the company had launched its prototype buses.
The MOU between Organda and Hyundai was signed in Seoul on Friday and witnessed by President Megawati Soekarnoputri during her visit to the country.
Organda said in a press release on Saturday that the buses would be supplied in dissembled form and could be assembled domestically.
The central government earlier promised to charge lower import tax if the buses were assembled by local companies. Lower import tax is needed to cut the prices, which range between Rp 200 million (US$20,000) and Rp 300 million per bus.
Sutiyoso acknowledged that the city's current 9,000 buses were mostly old and needed to be restored.
But he said buses were not the answer to the city's transportation problem.
"I prefer to choose mass rapid transportation, such as a subway train or a monorail. But the central government seems to prioritize other projects," he said.
He revealed that the administration had discussed with a Canadian investor the possibility of developing a monorail.
He did not mention the name of the investor.
Last year, the governor asked the central government to use a loan from Japan to build a subway project at an estimated cost of Rp 7 trillion. But the demand was rejected.
Executives of the Matsushita company later visited City Hall to discuss a possible continuation of the subway project.
The company led a Japanese consortium that, along with Italian companies, German companies, signed a MOU with the city administration in 1995 to develop the subway project.
But the project, for which the basic design has been drawn up, was halted due to the economic crisis in 1997.