Failure in further talks obstructs subway project
BANGKOK, Thailand (JP): The absence of a negotiating partner for the government is holding up construction of the long-awaited subway, chairman of the subway's consortium said yesterday.
Aburizal Bakrie told The Jakarta Post that since the financial proposal was submitted last March, the consortium has not met the negotiating partner representing interdepartmental interests regarding the subway project.
Among groups the partner was to represent, he said, was the Ministry of Finance, the Ministry of Transportation and the National Development Planning Board (Bappenas).
"They (the government) had expressed some disagreement with the financial proposal. But who do we talk to?" Bakrie said after closing a one-day seminar on Thai's investment opportunities with Indonesia.
In an earlier agreement between the consortium and the city administration, Bakrie said one of the agreed upon components was the assignment of a negotiating partner on the part of the government to deal with the consortium.
The consortium and the city administration signed an agreement in April with representatives of local investors to cover not only the basic design but its commercial aspects as well. "But, this working group has no authority to represent the government," Bakrie said.
When asked of a rumored change to the project's basic design, he said, "It's not true."
The construction of the US$2.3 billion subway to connect Blok M in South Jakarta with downtown Kota has been postponed indefinitely.
Yesterday, Bakrie denied that the consortium's proposed fares were the reason behind the delay in the project. "No, there's no problem with the fare proposal," he said.
In April, the consortium rejected the municipality's plan to set the subway fares to only Rp 1,800 (69 U.S. cents), far below the consortium's proposal of Rp 5,000.
The consortium consists of Indonesian, Japanese and European companies (IJEG). An agreement to build the project was signed by the consortium and the municipality in August 1995.
The Japanese companies are led by Itochu Corp, while the European firms by German Ferrostaal AG.
The Indonesian investors, led by businessman Aburizal Bakrie, are PT Bakrie Investindo, a subsidiary of the Bakrie Group; PT Pembangunan Jaya; PT Lippo; PT Bukaka/PT Kuda Perkasa; PT Suthamthabie and PT Steady Safe.
Bakrie said IJEG agreed to provide 100 percent of funds for the project. Thirty percent of total funds will be financed by the consortium and another 70 percent will be backed by soft loans.
The 14.5 kilometer subway project is expected to be completed by Aug. 17, 2001, in conjunction with the 56th anniversary of Indonesia's Independence Day.
The 17-station subway is an initial step of a long-term plan to ease traffic congestion. (anr/ste)