City will stop bertering for new facilities
City will stop bertering for new facilities
JAKARTA (JP): The city administration will no longer use the
barter system to develop new facilities, an official said
yesterday.
TB M. Rais, the deputy governor for economic and development
affairs, said that it is no longer profitable to use the barter
system, which allows developers to build projects in exchange for
land.
Rais said that while the system allowed the city to maintain
its assets -- a bus station, for example -- the land on which an
old bus station was located would be lost to the developers as
their fee.
"We don't lose the assets, they are only moved to other
locations. But the system is not profitable because often time
the old facilities sit on prime land," he said.
He said the municipality intends to implement a more viable
and profitable means of cooperation such as build-operate-
transfer (BOT) deals.
"We are just completing the old barter deals because we cannot
cancel them, as in the case of the Pulogadung bus terminal," he
said.
Ironically, data from the City Facility Bureau shows that in
the 1995/1996 budget year the city administration proposed 21
barter deals. The city council has rejected three, approved eight
and 10 are pending.
A source at the bureau said that most of the 21 deals involved
private companies asking for land in exchange for their
construction of apartments and other facilities.
The source, who asked not to be named, said that most involved
old school buildings and subdistrict offices.
On Tuesday, the city council's commission C for financial
affairs urged the municipality to avoid bartering deals to save
the city's old assets.
The commission said that the municipality should use the BOT
system more often, especially in the case of the East Jakarta
Pulogadung terminal.
The municipality signed the deal in 1990 with PT Rodial Eron,
which agreed to build a new terminal in Pulogebang to replace the
old Pulogadung terminal.
Rais, who was appointed a deputy governor in 1993, said the
deal was signed by his predecessors. Therefore, he said, "we can
revoke the deal."
The Pulogadung bus terminal area covers 3.5 hectares of land,
while the new terminal will be built on 10 hectares of land in
Pulogebang. (yns)