Governor supports new taxes to subsidize subway

JAKARTA (JP): Governor Surjadi Soedirdja says that imposing various new taxes on residents will help keep subway fares low.

Along with the taxes, the city will use public funds to finance the project. "In this way the subway fares can be set as low as possible," Surjadi said yesterday.

An executive of the subway project's management unit, Slamet Sularno, said over the weekend that reactivating lapsed tax regulations, including fuel, street, streetlight, and employee levies, could help finance the construction of the planned 14.5 kilometer subway system from Blok M to Kota. Congestion pricing was also cited as a possible source of funding for the project.

The parties which gain from the subway system deserve to help the project, the governor said yesterday.

An employee tax might also be imposed on companies located along the corridor because they are benefiting from the facility and congestion pricing will be imposed on vehicles which use the roads running parallel to the tracks, Surjadi said. "This is a cross-subsidy formulation."

However, Surjadi said some of the proposals, such as imposing a fuel tax, need approval from the government and the House of Representatives, and the city administration will not implement them without the proper approval.

"We don't know if the central government and the House of Representatives will approve the proposal but I think it is worth implementing the tax because it may discourage people from using private cars," he said.

Surjadi explained that the subway would eventually decrease pollution in Jakarta and save the country's oil stock.

A one-way fare on the subway is expected to be set at Rp 1,800 (78 US cents) per person.

The subway project's management unit, which is responsible for forming the subway's basic design, has reported that the city's current revenue, it was Rp 2.1 trillion in the 1995/1996 fiscal year, is not adequate to finance the project and the only way to cover the shortfall is by enforcing new taxes to increase the revenue.

The management unit estimated the city will receive Rp 868,8 billion from the new taxes.

The 14.5 kilometer, $1.5 billion, subway will link Blok M in South Jakarta and Kota in West Jakarta. Construction is due to begin in 1997.

Recent research found that gasoline worth $1.5 million is wasted every year by vehicles trapped in the congestion along Jl. MH. Thamrin and Jl. Jend. Sudirman.

The project's management unit plan to implement the fund- raising schemes gradually, beginning with the congestion-pricing scheme in July next year.

The project's management unit admitted that the traffic along the route will be bad during the construction works and said not using one's vehicle will be the only way to avoid it. (yns)