Citra Lamtoro to start $1.6b road project in RP

JAKARTA (JP): Citra Lamtoro Gung, the business group chaired by President Soeharto's eldest daughter Siti Hardiyanti Rukmana, will soon start the first phase of its US$1.6 billion toll road project in Manila.

Bambang Soeroso, a director of the business group, said here yesterday that the initial phase of the toll road construction would soon be carried out to follow the tie-up agreement signed with the Philippine National Construction Corporation in Manila on Wednesday.

He said that Citra Lamtoro Gung, under the tie-up agreement, will establish a joint venture corporation with Philippine National Construction Corporation to operate the toll road.

The joint venture firm, which will be named Citra Metro Manila Tollways Corporation, will be 55 percent owned by Citra Lamtoro Gung, which secured a license from the Philippine government last year to carry out a feasibility study, planning, construction and the financing procurement of the 36-kilometer Metro Manila Skyway and 47-kilometer Metro Manila Expressway toll-road projects.

Philippine National Construction Corporation, an authorized toll road operator in the Philippines, will have a 20 percent stake in the planned joint venture company, while AIG-Asian Infrastructure Group, a subsidiary of the American Insurance Group which acts as a funding coordinator in the toll road project, will have a 25 percent stake.

Bambang said that Citra Lamtoro Gung would not use domestic funds to finance the project, one of the flagship projects of the Philippine government.

"All of the funds for the Philippine toll road project will be provided by overseas financial institutions," he said.

He said that Citra Lamtoro Gung, selected as the main contractor in one of Malaysian toll road projects two years ago, would not merely act as a contractor in the Philippine toll road project.

"In Malaysia, we acted as a contractor, while in the Philippines, we are acting as an investor," he said, adding that his company would assign the state-owned Hutama Karya as the main contractor in the Philippine project.

The first phase of the Philippine toll road project, which will include the construction of a 9.2 kilometer-overpass road linking Bicutan and Buenda, will cost around $500 million. It will be constructed beginning this year and is scheduled for completion in 1997.(hen)