Govt may offer bridge project to new investors

Govt may offer bridge project to new investors

JAKARTA (JP): The government may offer the Surabaya-Madura
bridge project in East Java to other companies if investors now
negotiating the US$250 million project do not meet its
expectations, a senior official said here yesterday.

The Ministry of Public Works' Director General of Highways,
Suharsono Murtakim, said the government would end negotiations,
which had been going on for years, if there was no progress in
the talks.

"We don't have a deadline for an agreement to be reached but
we are looking into the possibility of getting other investors,
who could come up with more convenient terms for us," he said on
the sidelines of a House Commission V for public works, tourism
and telecommunication and housing hearing.

The government is still negotiating with investors, including
PT Dhipa Madura Pradana and Japan's Overseas Economic Cooperation
Fund (OECF).

But the US$250 million bridge project, led by research and
technology minister B.J. Habibie, would be opened to other
investors, if the investors and the government cannot come to
terms, Suharsono said.

He declined to name potential investors.

The much-debated six-kilometer Surabaya-Madura bridge has been
postponed several times. Construction was initially due to begin
in 1995.

OECF, which is committed to provide 80 percent of the finance
demanded a government guarantee for its planned loan to the
project, but the government refused, saying it never guaranteed
credit for toll roads.

The government has offered the bridge project to private
investors under a build-operate-transfer scheme, in which the
investors are allowed to collect fees from bridge users for a
certain period.

Investors are required to transfer the operation of the bridge
to the government after the concession period expires.

Soeharsono said more delays in negotiations would increase the
cost of the project.

Soeharsono also said that the Scotia Bali Bridge Co Ltd was
making a feasibility study of the planned Bali strait bridge to
connect Ketapang and Gilimanuk.

President of state-owned toll operator PT Jasa Marga, Maryadi
Darmokumoro, said the company was preparing to launch an initial
public offering of its shares.

"We have to study market conditions and other external factors
such as which state-owned companies are going public at the same
time, before we can sell our shares to public," Maryadi said
after the hearing.

Jasa Marga booked a Rp 324.73 billion (US$132.65 million) net
profit, and Rp 634.41 billion in revenue from toll roads last
year. (das)