City to close down unprofitable markets

Damar Harsanto, Jakarta

Poor conditions and poor services have prompted city market operator PD Pasar Jaya to close down some 50 non-lucrative traditional markets through a "modernization" scheme.

"In the future, I estimate PD Pasar Jaya will be financially healthy with only around 100 markets remaining operational in the city," PD Pasar Jaya president director Prabowo Soenirman said on Friday at City Hall.

In an initial phase, the operator will close down seven markets, which are considered financial burdens. They are the Blora, Karet Pedurenan and Kramat Baru markets in Central Jakarta; Sawah Barat, Prumpung and Cipinang markets in East Jakarta; and Kramat Jaya and Cilincing markets in North Jakarta.

PD Pasar Jaya cannot afford to renovate the markets, which would cost an estimated Rp 8 trillion (US$889 million).

According to Prabowo, the renovation of certain markets would be pointless anyway, as only a few vendors operated there, and few people went there to shop.

"There have been changes in some areas where our markets are located. The changes forced us to reconsider whether the markets were still needed by the residents," he said.

He used, as an example, Blora market, which has been quiet over the last three years as, while it was once surrounded by houses, offices now stand in their place.

"We are planning to convert the market into offices or other commercial premises... We are also looking into the possibility of cooperating with city companies for that purpose," he said, adding that cooperation with city companies would help maintain the lower rental fees imposed on vendors and tenants.

City companies will manage businesses relevant to their core businesses.

"(City run developer) PT Jakarta Propertindo will manage offices or apartments, while PT Jakarta Turisindo will handle hotels and PD Pasar Jaya will maintain markets," he said.

Critics say that city companies have overlapped in running their businesses, as in the case of the construction of the Jakarta Wholesale Center at the former site of the Melati dam in Central Jakarta.

The center, which will become the country's largest wholesale market for textile products, will be developed by PT Jakarta Realty, a joint venture of private company PT Agung Podomoro and PT Jakarta Propertindo.

Prabowo claimed that efforts to modernize city markets would help the operator book more profit and improve its services to the vendors, as well as customers.

PD Pasar Jaya only managed to book Rp 18 billion in profit last year. As for this year, the operator has aimed to generate profit of Rp 28 billion.