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)