BI to pay city for land conversion

JAKARTA (JP): After nine years of stalemate, the central bank (Bank Indonesia) has committed itself to pay the city administration Rp 37.8 billion (US$4 million) in compensation for acquiring a city asset, formerly Jl. Budi Kemuliaan I in Central Jakarta, in 1991.

The payment will be made within 30 days.

The commitment was spelled out in a memorandum of understanding (MoU) signed by Governor Sutiyoso and Bank Indonesia deputy governor Achwan on Tuesday at City Hall.

The event was witnessed by City Council Speaker Edy Waluyo.

"In order to avoid any more delays, the payment will be made in the third week of December at the latest," Achwan said after the signing of the agreement.

Meanwhile, Sutiyoso said the city would include the money in its 2001 draft budget.

The governor said he was glad that the problem with the central bank had eventually been settled.

"I am glad that the compensation can be paid swiftly because it has been delayed since 1991 due to technical problems.

"I hope the central bank can fulfill its commitment as stated in the memorandum of understanding," Sutiyoso said in his speech.

He explained that the 2,673-square-meter street was closed in 1991 as part of the central bank's expansion project. In the 1991 agreement between the city administration and the central bank, the latter was required to relocate the street, which is now part of the bank's office complex.

"However, the presence of Budi Kemuliaan hospital hampered the relocation process. Finally, we (the bank and the city administration) agreed on compensation, instead of relocating the street.

"And the city council has approved the new deal," Sutiyoso said.

The city council's letter of approval was signed by Edy Waluyo on Dec. 4, 2000, following Governor Sutiyoso's request, dated Oct. 11, 2000.

Edi's letter also marked the city council's endorsement of the conversion of the street.

City administration spokesman Muhayat said that the city is actually not allowed to sell its assets and should have the street relocated instead.

"That's why renewing the deal was so difficult and important.

"But, we managed to reach a new agreement over the assets on Nov. 21, 2000 and we'll sell the land at the current market price, which is around Rp 13 million per square meter," Muhayat said. (dja)