Construction of subway project delayed by financial problems

JAKARTA (JP): The construction of the long-awaited subway project will be delayed indefinitely because of new problems, mainly from its financial scheme, an official said yesterday.

The head of the city's Development Planning Board, Budihardjo Sukmadi, said besides the financial problem, the project also needed government approval, which has not been officially issued yet.

"Now everything is back to stage one again..." Budihardjo said without giving details.

He declined to comment on whether the problem of the project's financial scheme was caused mainly by a fare proposal from a consortium in charge of the project.

The consortium consists of local companies PT Bakrie Investindo, PT Pembangunan Jaya, Lippo Group, PT Bukaka Corporindo and PT Steady Safe, and firms from France, Canada, Japan, the United States, Germany and Australia,

"Just be patient for progress," Budihardjo said.

The US$2.2 billion project, which will connect Blok M in South Jakarta to downtown Kota, was originally scheduled to start construction in April, but was later delayed until June. And up until yesterday no more news was heard about the project.

Aburizal Bakrie, who heads the Indonesian-Japanese-European consortium, said in March that the government gave a green light to investors to begin the 14.5-kilometer project.

The green light was given under several conditions, including that the government would not provide any loan guarantees.

Bakrie denied that the project was delayed due to differences over the fares. He also denied that there were technical or investment problems concerning the subway project.

The consortium agreed long ago to fund 100 percent of the project, he said.

The municipality, however, underlined the importance of a presidential decree to approve the project.

Deputy Governor of Economic and Development Affairs Tb.M. Rais said recently that the decree was essential to determine the city's role in the project.

The 17-station subway was an initial step in a long-term plan to ease traffic congestion.

The city and the consortium signed a memorandum of understanding in August 1995.

In July 1996, one of Soeharto's sons, Bambang Trihatmodjo, joined the consortium. (ste)