Foreign firms proposed for waterfront project

Foreign firms proposed for waterfront project

JAKARTA (JP): Councilors have recommended that the city
administration offer remaining work on the huge Jakarta
waterfront project to foreign companies because embattled local
firms do not have the means.

Participation of foreign firms is vital to accomplish the
reclamation and regeneration of northern areas of North Jakarta,
they argued yesterday.

"The opportunity for foreign investors to take part in the
(so-called) Pantura project is still wide open as there are great
spaces of land which have not been developed yet," Lukman F.
Mokoginta of the Indonesian Democratic Party (PDI) said.

City administration data lists 1,059 hectares of inundated
land still for reclamation and 12,772 hectares for regeneration.

Councilors said there was little likelihood of local firms
participating in the megaproject due to the economic crisis.

Most companies involved in the waterfront project have halted
activities temporarily, Lukman said.

Ali Wongso Sinaga of Golkar faction concurred and said the
project urgently needed foreign investors, particularly those
with strong financial and technological backgrounds.

"This project needs a lot of money. Being objective, only
reputable foreign firms have the capability to develop the area
during this economic crisis.

Local firms? Forget it," Ali said.

Many local businesses, particularly in the property and
construction sectors, have gone bankrupt due to the drastic drop
in the rupiah's value against the U.S. greenback since last year.

Many that remain in business are barely staying afloat.

The Pantura project aims to create a future waterfront city by
reclaiming 2,700 hectares of inundated land and regenerating
13,709 hectares of land along the north coast.

It spans the five districts of Penjaringan, Pademangan,
Tanjung Priok, Koja and Cilincing.

The Pantura Reclamation and Development Board, set up by the
administration for the project, has so far signed seven
Memorandums of Understanding (MOUs) and three development deals
with several private companies to do reclamation and regeneration
work in the area.

Companies contracted for reclamation projects include PT Kapuk
Naga Indah, a Salim Group subsidiary with a 674-hectare
concession; PT Pembangunan Jaya Ancol, a joint venture between
the city administration and property tycoon Ciputra (392
hectares); PT Manggala Krida Yudha, a company partly owned by
former president Soeharto's youngest daughter Siti Hutami Endang
Adiningsih (375 hectares); and PT Jaladri Kartika Eka Paksi, a
company associated with the Armed Forces (200 hectares).

According to Lukman, each company was required to pay an
initial development fund to the board of about US$2.5 million for
each concession.

"They are also required to pay the development charge of $50
per square meter of land included in the concession," he added.

The board, Lukman said, now planned to cut the development
charge by half in a bid to lure investors.

Earlier this month, councilors also urged the administration
to review all the deals signed between the board and the
companies, most of which ran by Soeharto's family and close
friends, saying that the concessions were awarded without open
bid.

Several months ago, the board signed four MOUs on the
regeneration of the Kali Opak and Sunda Kelapa subdistricts with
unidentified private companies.

The board planned to revitalize 81 hectares in Sunda Kelapa
and a 9.6-hectare plot in Luar Batang to be used as cultural
preservation areas.

It also earmarked the restoration of a dock and traditional
shipbuilding factory which stands on a 3.1-hectare plot in the
historical Si Pitung complex in the eastern part of the Pantura
area.

Lukman said the Pantura waterfront city plan was originally
proposed years ago by the City Council in a bid to anticipate the
need to have another modern business district in Jakarta.

"We felt that the existing business center and gold triangle
areas of Jl. Sudirman, Jl. M.H. Thamrin and Kuningan district was
not strong enough to support Jakarta in facing the Asian Free
Trade Area."

Planned for the city were modern and internationally
standardized business and trade facilities, a port, middle to
upscale housing estates, shopping centers, tourist sites,
industry and warehouse centers, and other public facilities, he
said. (cst)