City has stopped property barter deals: Official

JAKARTA (JP): City-owned property has become too valuable to be exchanged, an official said yesterday.

This is why agreements with the private sector to build on city-owned property could no longer be conducted by trading the land for a plot elsewhere, the assistant to the city secretary in charge of economic and development affairs, Prawoto S. Danoemihardjo, said.

"Exchanging city land with another plot will only be done in exceptional cases," he said.

Even then the municipality usually asked for comparatively high prices, he said.

As the last two years of cooperation with the private sector has been based on build, operate and transfer agreements, much of the property still belonged to the city, Prawoto said.

Prawoto cited the agreement with the Bakrie Group, which renovated the outdated Soemantri Brodjonegoro Youth Center in Kuningan, South Jakarta.

New facilities at the Rp 100-billion project on Jl. H.R. Rasuna Said include the Pasar Festival. The project aims to combine sports, recreation and dining facilities.

The municipality will receive royalties from the project for 48 years then ownership will be transferred.

Prawoto said this kind of property barter deal, known by the Dutch term ruislag, was abandoned because the high price of land meant buildings on city-owned land would have to move far from their current strategic sites.

Municipality property barter deals are only allowed with the city council's agreement if it is beneficial to the municipality.

Prawoto was responding to questions asking whether expectations in property barter deals with the private sector had been met.

Recent Supreme Audit Agency (Bepeka) findings show several property barter deals involving central government assets have led to Rp 2.76 billion (US$1.17 million) losses between October 1995 and March 1996.

The new edition of the Detektif & Romantika magazine says one unfavorable deals involved the razed National Police headquarters near the Blok M shopping center.

The agency lost Rp 1.1 billion. Lack of official scrutiny was said to have caused the loss. State assets can only be exchanged with the Ministry of Finance's consent.

Prawoto said the Agency had not yet checked into municipality assets.

He said exceptions to the halt on property barter deals included the relocation of the Pulogadung inter-city terminal in East Jakarta.

As the terminal is no longer adequate to accommodate the number of passengers and buses the city made an agreement with private developer PT Rodial Eron to build a new terminal.

The new three-story terminal will be in Pulogebang, Bekasi.

This is in line with city policy to have inter-city terminals on the city's outskirts. (anr)