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)