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.