Consortium favors Siemens technology for MRT project

Consortium favors Siemens technology for MRT project

Damar Harsanto, The Jakarta Post/Jakarta

The new consortium for the construction of the delayed mass rapid
transit (MRT) project in the capital, Monorail Indonesia, has
signed a memorandum of understanding over the use of German
Siemens technology.

The signing ceremony was held on July 7 with little fanfare.

Among the signatories grouped in the consortium are developer
PT Jakarta Monorail, American investment bank JP Morgan, Hong
Kong company MTRC, Bukaka Group -- which is partly owned by the
family of Vice President Jusuf Kalla -- state car train maker
INKA and state electronic maker LEN Industry, as well as Hong
Kong-based Mass Transit Railway Cooperation and Siemens.

Minister of Transportation Hatta Radjasa and State Minister of
Research and Technology Kusmayanto Kadiman witnessed the signing
of the agreement.

"The use of Siemens technology will reduce the project's cost
to US$480 million, cheaper than other bids made by South Korean
company Rotem, which offers magnetic levitation technology
(Maglev) or Japanese Hitachi's monorail technology," assistant to
the city secretary for development affairs Hari Sandjojo told The
Jakarta Post on Friday.

Rotem offered its technology for $600 million, while Hitachi
quoted $670 million.

Sources familiar with the MRT revealed Siemens had an
advantage over the other bidders due to their requirements:
First, for the Jakarta administration to subsidize the operation
of the MRT for several years and second, for a stake in the
electronic road pricing (ERP) system, which will be imposed on
private cars using routes parallel with the MRT's.

There will be two MRT routes: the Green Line, through the
business districts of Kuningan and Sudirman in South Jakarta, and
the Blue Line, from Kampung Melayu in East Jakarta to Taman
Anggrek shopping mall in West Jakarta.

Hari said of the total cost of $480 million, PT Jakarta
Monorail would provide $60 million, while local financiers would
pay $90 million, leaving $330 million to be raised from foreign
financiers.

"We expect both JP Morgan and MTRC to raise funds from foreign
financiers for the project," he said.

Meanwhile, PT Jakarta Monorail director Sukmawaty Sjukur told
the Post the consortium had not made a final decision.

"We will announce our final decision on the technology on July
28, the deadline for the bidders to come up with revised bids,"
she said.