Economist calls for subway postponement
Economist calls for subway postponement
JAKARTA (JP): The city administration's ambitious US$1.5
billion Fatmawati-Kota subway project received strong opposition
from a noted economist on Tuesday.
Sri Mulyani of the University of Indonesia's Institute for the
Development of Economy and Management (LPEM-UI) suggested the
city administration should postpone the project, saying it was
not an urgent scheme for the city's development program.
"The city administration has no sense of crisis if it
continues with the project," Mulyani said after a seminar on
people's economic empowerment at City Hall.
"The city administration should also be careful with the
special yen loan which was offered to finance the project."
She said the Japanese government had its own interests in the
construction project as city administration would have to include
their suppliers and construction companies in it.
"This project will involve a huge amount of money. It will
only be a heavy burden to the city administration in the short
term," she said.
However, she acknowledged that Jakarta needed a mass rapid
transit system, including the subway project, to settle the
traffic problems.
Vice President Megawati Soekarnoputri gave her approval to the
subway project after Governor Sutiyoso met with her last week at
her residence in Kebagusan subdistrict, South Jakarta.
The 15-kilometer project, which will begin from Jl. Fatmawati
in South Jakarta to the Kota area in West Jakarta, will continue
construction in 2001 after it was postponed in 1997 due to the
economic crisis.
The Japanese government is financing the project with a
special yen loan, which has a 0.75 percent annual interest rate
and a maturity period of 40 years, including a ten-year grace
period.
The memorandum of understanding (MOU) of the project was
signed in 1995 between the central government, the city
administration and an Indonesian-Japanese-European consortium.
The consortium includes Japanese companies led by the Itochu
Corp., European firms led by Ferrostaal AG of Germany and
Indonesian firms led by PT Citra Lamtorogung, PT Bukaka Teknik
Utama, PT Bakrie Investindo, PT Pembangunan Jaya, PT Lippo, PT
Suhamthabie and PT Steady Safe.
Chairman of the Indonesian Transportation Society (MTI) Suyono
Dikun said recently that the infrastructure of the project should
be financed by the government, while the operational costs should
be covered by private investors.
An executive of the National Development Planning Board
(Bappenas), Ali Imron, said last Wednesday that former president
B.J. Habibie agreed to continue the project and asked the
Japanese government to disburse the loan.
"But the World Bank later sent a letter signed by its country
director Dennis de Tray, expressing their disagreement and asking
the Indonesian government to review the project," Imron said.
(jun)