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)