City set to cut Hotel Mulia's fine by 25%

JAKARTA (JP): The city administration is prepared to give a 25 percent reduction in the Rp 20.5 billion (US$1.95 million) penalty slapped on Hotel Mulia for violating spatial permits.

Deputy Governor for Economic and Development Affairs Budiardjo Soekmadi said on Thursday the city understood the Central Jakarta hotel's contention that it faced financial difficulties in paying the bill due to the crisis and construction costs.

"The management has sent us a letter informing us of its inability to pay the full amount of the penalty, and thus asked the administration to give a reduction of the payment.

"We have discussed the management's request and decided to give the 25 percent discount."

Budiardjo said the administration would inform the hotel of its decision by letter in October.

"We will also give the management a chance to pay the debt in a six-month installment basis, starting from next month."

The management and contractor of the five-star hotel was fined last year for violating 1975 bylaw No. 4 on high-rise buildings and 1985 bylaw No. 9 on building height regulation.

The block plan approved for the hotel project, jointly signed by then Jakarta governor Surjadi Soedirja and former state secretary/minister Moerdiono, allowed for construction of a 16- story structure.

Instead, the contractor build a 40-story tower.

The US$240 million hotel was inaugurated in September last year by former president Soeharto. Completion of the 1,008-room hotel was speeded up so it could serve as the athlete's village for the 19th Southeast Asian (SEA) Games held last October.

One of the hotel's owners is the Jakarta Country Club, a subsidiary of the 1997 SEA Games Consortium, chaired by former president Soeharto's second son Bambang Trihatmodjo, that financed the biannual regional sporting extravaganza.

Round-the-clock construction, finished within nine months, ensured completion of the tower before the Games' opening.

Budiardjo said the hotel management's letter asked for consideration to be taken into account that the building was constructed on a tight schedule and in the interest of the nation.

"Due to the accelerated process, the hotel construction cost more than usual as it needed sophisticated machinery and had to set aside more payment for extra labor hours," he said in quoting the hotel's appeal. (ind)