Government encouraged to lower import tax on buses

JAKARTA (JP): Jakarta Governor Sutiyoso urged the Central Government to decide soon its stance on the replacement program of the city's aging bus fleet by lowering import tax as a proposal to buy new vehicles from local firm PT Texmaco Engineering still hangs in the balance.

"We could not wait for Sinivasan since there is no financial institution willing to provide his company with a loan. The institutions should first look at the buyers," Sutiyoso told reporters, referring to Texmaco's president Marimutu Sinivasan.

He said that the need for new buses was urgent now that the city's buses would be completely inoperative in the very near future.

For the sake of people's interests, Sutiyoso suggested that central government open the door for imported buses by lowering the import tax which currently reaches 60 percent.

"The government will not suffer losses from import tax reduction, while it could provide buses at inexpensive prices," he added.

He refused to mention the countries where the buses could be obtained.

The city administration earlier announced its plan to import buses from Dong Feng, China, each of which costs between Rp 160 million (US$16,000) and Rp 250 million, depending on its type.

The central government said it would reduce the import tax to between 10 percent and 20 percent only if the buses could be assembled here.

The administration was doubtful, however, that local assemblers could do this.

Sutiyoso admitted that he preferred local buses to imported ones.

"But it's already three months since Organda ordered the Texmaco buses. Not a single bus has yet been produced by the firm," he claimed.

The City's Land Transportation Owners' Association (Organda) earlier ordered 2,000 Perkasa buses from Texmaco.

Organda's chairman Aip Syarifuddin said earlier that the rejuvenating program for the city buses would not run smoothly as Texmaco was having difficulty in securing a loan to produce them.

Aip mentioned the difficulties in obtaining a loan, including a loan for transportation businessmen who want to buy the buses.

"We have sent a letter to Texmaco about it. The firm only replied that the matter would be cleared in March," he claimed.

He said when signing a memorandum of understanding between Texmaco and Organda, the firm promised to help find a loan for the businessmen who want to buy the buses.

"Until now, there is no bank, local or foreign, which could provide a loan for the purchase of the buses," he said.

He said the banks predicted that the businessmen would be unable to repay the loan from the current cheap fares of Rp 500 for regular buses and Rp 700 for limited seat buses.

But, he said Organda has not yet raised the tariff for fear that it would create public protests, not to mention opposition from the city council.

"It is not popular to increase bus rates in the current situation," Aip said last week.

Aip had earlier come under criticism as he was among those who supported the purchase of Texmaco buses.

Jakarta needs a total of 7,718 new buses, comprising 3,707 large buses and 4,011 minibuses, to replace the current fleet which has been serving passengers for more than 20 years.

The old buses belong to 14 private companies, which are obliged to improve their fleets. The city currently has a total of 5,441 medium buses and 4,981 minibuses providing transportation for Jakarta residents. (jun)