Awaiting recommendation to buy buses from China

Awaiting recommendation to buy buses from China

JAKARTA (JP): Following the signing of the agreement for the
marketing of 2,000 buses from Texmaco on the previous day, the
city administration on Friday said that it would continue efforts
to obtain a government recommendation which would lower the
import tax for the 3,000 buses to be shipped from China as part
of its plan to replace the city's aging buses.

City Land Transportation Agency (DLLAJ) Chief Buyung Atang
said that his office has been urgently waiting for the
recommendation from Minister of Transportation and
Telecommunication Agum Gumelar over the import tax issue which
has become the main obstacle for the city to realize its plan to
import the Chinese made buses.

"The highly anticipated letter of recommendation from the
minister would help support the governor's approval for the bus
imports which, in turn, could help lower the tax for the
completely built up buses from China," Buyung said.

On Thursday, the Organization of Land Transportation Owners
(Organda) for Jakarta Chapter signed a memorandum of
understanding (MoU) with PT Texmaco Perkasa Engineering to help
market its 2,000 Perkasa buses to city bus operators here.

The city currently needs around 5,000 buses to replace the
aging buses. Jakarta currently has 2,028 buses, including
minibuses, which have been serving passengers for more than 20
years, and 1,556 others that have been servicing the capital's
residents for at least 15 years.

Buyung said after the signing on Thursday that the remaining
3,000 buses needed to replace the old city buses would likely be
shipped from China.

"The Ministry of Trade and Industry has agreed to lower the
import tax from 40 percent to five or 10 percent. But they said
that the buses should be completely knocked down vehicles to help
boost local auto assemblers," Buyung said.

The city administration initially planned to replace all of
the aging buses by shipping them from China. The plan was changed
after the ministry refused to lower the import taxes for the
buses.

On Friday, Buyung said that he hoped minister Agum would
support the city's plan since it's probably impossible for the
city to meet the prerequisite set by the Ministry of Industry and
Trade.

"The buses from China would be all CBU ones, meaning that the
ministry would stick to its policy of charging for the vehicles
at the 40-percent rate," he said.

According to Buyung, he doubted that local auto assemblers
here were qualified enough to handle the Chinese buses due to
their limited experience and capacity.

"From what I have studied, two big assembler companies in
Magelang, Central Java, namely PT Tugas Anda and PT Delima Jaya,
could only assemble 300 vehicles per month, while the city needs
3,000 buses within a very short time," he said, adding that the
first fleet of 1,000 buses is due to arrive next month.

"We understand that we have to use domestic products. But
sometimes we have to understand the limitation and the urgency,"
he added. (dja)