Builder of subway to be selected through open bid

Builder of subway to be selected through open bid

JAKARTA (JP): Governor Surjadi Soedirdja assured yesterday
that the builder of the planned multi-million 14 kilometer subway
will be determined by an open bid.

Surjadi said the tender process will begin as soon as the
basic design of the project is completed. He denied rumors that
the government has already granted the US$1.3 billion project to
a certain company.

"We have not yet appointed any company to build the subway
because it is a basic regulation that every project should be
tendered," Surjadi, who is also the head of subway Project
Management Unit, told reporters.

As the city administration is working on the details of the
subway that will link Blok M in South Jakarta and Kota in West
Jakarta, speculation is rife on whether the government will award
the much coveted contract to a certain company.

Surjadi was also commenting on a press report that a Japanese-
German business group led by Itochu Corp. and German steelmaker
and trading house Ferrostaal will sign a memorandum of
understanding on Aug. 17 with the government to build Indonesia's
first subway.

The consortium includes Germany's Siemens, British contractor
Taylor-Woodrow and Swedish-Swiss company ABB and local partners
such as Bukaka, Bakrie and Lippo groups.

Surjadi explained that the government will sign the memorandum
of understanding with all companies that agree to become
investors in the project, but that does not mean the companies
are automatically appointed the constructors.

"First we will sign an agreement with the companies interested
in investing in the project, then we develop the basic design
which will be presented to the investors and in the end we begin
the tender process to appoint the company which will build the
project," the governor said.

The government has decided to form a consortium of a state-
owned, city-owned, foreign and local private companies to build
the subway.

The subway is expected to carry up to 40,000 passengers during
peak hours and approximately 290,000 passengers per day from the
year 2002. The proposed fare is Rp 1,800 per person.

The project will include the construction of 15 stations in
Kota, Glodok, Mangga Besar, Sawah Besar, Harmoni, Monumen
Nasional, KH Wahid Hasyim, Hotel Indonesia, Dukuh Atas,
Setiabudi, Karet, Senayan, Senopati, Blok M and Panglima Polim.

Up to now there are companies from France, Canada, Japan, the
United States, Germany and Australia which have showed an
interest in the project.

In a related development, director of urban roads development
of the Public Works Ministry Sunarjo Sumiadji said that no local
company has shown any determination to build mass rapid
transportation facilities in the metropolitan.

Sunarjo explained that private companies are reluctant to
invest in this particular area because it is a high cost
investment, although the subway is an ideal solution to the
city's traffic problem.

"Many companies have showed an interest but none have agreed
to invest," Sunarjo said as quoted by Antara news agency.

He explained that it will cost approximately Rp 200 billion to
build each kilometer of subway, meaning it will cost trillions of
rupiah to build the Blok M-Kota subway.

He believes that if the company has the right to run the
subway for 25 years before it transfers the project over to the
government, the fare is estimated to reach Rp 7,000 per
passenger. He doubts that most Jakartans could afford to use it.

But he stressed that the mass rapid transportation is urgently
needed in the city, where there is a population of about 10
million people and where traffic is becoming a horrendous
problem.(yns)