City sets deadline for JM to secure project funds

Bambang Nurbianto, The Jakarta Post, Jakarta

The city administration has told PT Jakarta Monorail (JM) to complete its financial closing by Jan. 31, 2006, or the contract to construct two monorail lines in the city will be terminated.

City secretary Ritola Tasmaya said on Wednesday that the administration would find another partner to develop the project.

"Governor Sutiyoso underlined that this is the last chance for JM to complete its financial closing," said Ritola after the meeting between Sutiyoso and JM executives on Wednesday.

The contract between the administration and PT JM expired in June 2005. The city extended the agreement for another six months to give the opportunity to JM to find an investor.

Sutiyoso asked the company on Monday to report its latest progress in finding investors for the project.

Sutiyoso left the meeting early and refused to comment, while JM executives only confirmed the deadline set by the administration.

According to Ritola, JM executives explained to the meeting the progress of the financial closing for the US$496 million project and the planned shareholders meeting on Friday.

JM has picked Singapore-based company Global Metrochem Holding Ltd. as its new partner to raise funds from commercial banks.

Previously JM director Sukmawaty Syukur said at Friday's shareholders meeting, JM would end the internal rifts between its two supporting companies -- PT Indonesia Transit Central (ITC) which holds 55 percent of shares and Omnico Singapore, Pte. Ltd, which holds 45 percent.

The rift between ITC and Omnico was sparked by the assignment of the Indonesia Consortium of Monorail Industries (ICMI) by ITC as a rolling stock supplier for the project, which was rejected by Omnico, whose preferred firm was South Korea's Rotem.

ICMI is supported by Bukaka Group, whose shares are partly owned by the family of Vice President Jusuf Kalla, state rolling stock maker PT INKA and state electronics firm PT LEN Industry.

The monorail project began in June last year and was then projected to finish in 2007.

When up and running, the monorail will cater to transportation needs in the prime business areas of the city through a 14.3- kilometer line as well as a 13.5-kilometer line from Kampung Melayu in East Jakarta to Taman Anggrek Mall in West Jakarta.