City has stopped property barter deals: Official
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renovated the outdated Soemantri Brodjonegoro Youth Center in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)