Govt ready to negotiate on Senayan complex

Fabiola Desy Unidjaja, The Jakarta Post/Jakarta

Following the asset preservation order imposed by the Central Jakarta District Court on the Senayan Square complex, the government is ready for negotiation with the management of the complex over eight hectares of land left vacant by the developer.

State Secretary Yusril Ihza Mahendra said on Friday that the government was willing to halt the case temporarily.

"The government is asking the management to fulfill its (original) agreement by building on the whole 20-hectare area and to return it to the government in 40 years time," he said.

"After 15 years of operation, the management has still left eight hectares of land vacant, blaming the economic crisis that hit the country in mid-1997 for the halt in the development. We want them to make use of the land as stated in the agreement."

Yusril said that the management was supposed to build a hotel or an office building or an athletes center on the vacant land.

The agreement between the Bung Karno Sports Complex Management Board (BPGBK) and the Kojima Overseas Asia Pte. Ltd., a Singaporean-based subsidiary of Japanese real estate Kojima Cooperation, was made in July 1989.

The Build-Operate-Transfer (BOT) deal stipulates that after 40 years the whole compound, including the buildings, must be returned to the government.

Representatives of Kojima were disappointed with the court's verdict to freeze the eight hectares of land, saying they were not summoned to the court over the case.

The BPGBK is asking for US$225 million in compensation for state losses.

However, Yusril's statement was different from the court bailiff. The bailiff said that the frozen assets include the Plaza Senayan Mall, Plaza Senayan Apartments, their parking and food court buildings and the Plaza Senayan Annex Living Stone building, which is currently under construction.

Yusril said before submitting the case to the court, the state secretary and the BPGBK had tried to discuss the case with relevant parties. "We failed to find a solution during the negotiation, so we decided to go to court."

He added that the agreement did not carry a time frame for construction on the remaining eight hectares.

The construction of the mall as well as other commercial premises within the sports complex, which was built in the 1960s to host the fourth Asian Games, sparked controversy in the early 1990s since the complex should have remained a sports center instead of being converted for commercial purposes.