Govt defends DRB-Hi Com role in JORR project

JAKARTA (JP): The government brushed aside on Thursday critics who doubted the competence of Malaysian investor DRB-Hi Com in the long-awaited Jakarta Outer Ring Road (JORR) project.

Minister of Settlement and Regional Infrastructure Erna Witoelar said the Malaysian company had sufficient equity to support the toll road project, which is expected to cost DRB-Hi Com and its Indonesian partner PT Jasa Marga Rp 5 trillion (US$526.3 million).

"They didn't come to us empty-handed. We have checked their financial report and they have prepared a Rp 1.2 trillion budget for the project," she said.

Erna was responding to a group of House of Representatives (DPR) legislators who demanded the government's clarification over the propriety of DRB-Hi Com.

She said the Malaysian company had also earmarked around Rp 800 billion to free the land used for the construction project.

The project, covering 63 kilometers, will link all outlying areas of Jakarta and is designed to ease traffic congestion in the capital.

Erna claimed that all of the procedures prior to the deal were transparent.

"We coordinated this with the House and frankly we couldn't wait any longer to start the project as we were concerned about how to provide people with more jobs," she said.

"Again, apart from economic reasons, heavy traffic congestion and poor road conditions in Jakarta have given us no choice but to build more roads."

JORR's initial investors, namely PT Citra Mataram Satriamarga Persada, PT Marga Nurindo Bhakti and PT Citra Bhakti Margatama Persada, which are linked to former president Soeharto's daughter Siti "Tutut" Hardijanti Rukmana, managed only to complete 40 percent of the project when the economic crisis struck the country in mid-1997. The government then suspended the joint venture.

The remaining 60 percent of the project, at the time of suspension, was either under construction or in its preparatory stages.

Left-over projects included construction of roads linking Pondok Pinang and Kebon Jeruk, Jagorawi toll road and Cikunir, and Kebun Jeruk and Penjaringan.

The investors were also preparing the construction of the ring road connecting Cikunir, Cilincing and Tanjung Priok when the project came to a halt.

The Indonesian Bank Restructuring Agency (IBRA) took over the three companies' nonperforming loans from nationalized banks, and along with state toll road operator PT Jasa Marga formed a joint venture, called New Co., to continue the JORR project. (edt)