Govt ready to negotiate on Senayan complex

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.