Investor interest increases in JORR tollroad project

JAKARTA (JP): Several foreign and local investors have voiced interest in entering the bid for the Jakarta Outer Ring Road (JORR) tollroad project despite the Indonesian Bank Restructuring Agency's (IBRA) decision to designate a Malaysian consortium as the preferred bidder.

Minister of Settlement and Regional Infrastructure Erna Witular said over the weekend that there were at least three foreign investors interested in the project; Italy's Torno, Australia's Apil, as well as investors from Germany.

She also said that a local tollroad operator, PT Citra Marga Nusaphala Persada (CMNP), had also expressed interest in joining the tender process.

"I cannot forbid anybody from tendering a bid for JORR ... however I told the company that even if it won (the bid) the public may not have enough faith in CMNP to let it continue," Erna was quoted by Antara.

CMNP, as well as the three previous developers of JORR -- PT Citra Bhakti Margatama Persada, PT Citra Mataram Satriamarga Persada, and PT Marga Nurindo Bhakti -- are closely linked to former president Soeharto's daughter Siti Hardiyanti Rukmana.

IBRA has taken over the tollroad project after the three companies failed to pay their debts worth Rp 2.55 trillion to several banks now under the agency's control.

Erna acknowledged that the JORR project is no longer simply a business project but has been politicized. Under such conditions, CMNP would have to face various negative perceptions and barriers that would arise if it decided to continue to bid, she added.

"There are people who support the company's entrance to the tender process, but there are also those who are seriously opposed to it," she said.

The 69.3-kilometer JORR project, which would link all outlying areas of Jakarta and ease traffic congestion in the center of the capital, commenced prior to the financial crisis that hit the country in 1997.

It was only 30 percent finished when the government suspended the project in 1998 in a retrenchment plan to cope with the crisis.

IBRA and Jasa Marga then established a new company, under the name of PT Jalantol Lingkar Luar Jakarta (JLJ), in December last year to take care of the tollroad project and responsibility for settling its debts to IBRA.

IBRA had also decided to retender the project, while naming a Malaysian consortium led by DRB-HiCom as the preferred bidder due to its long-term commitment to the project.

CMNP manages the Cawang-Tanjung Priok tollroad and is currently engaged in the construction of the Priok-Jembatan Tiga (Pluit) tollroad that will span 13.13 kilometers.

It also handles the construction of a 36.5 kilometer tollroad in Tanjung Perak, Surabaya in East Java estimated to cost approximately Rp 1.1 trillion (about $100 million).

In the meantime the company was also in the middle of negotiations to restructure $97.8 million of foreign debts which will mature next year.

CMNP president Daddy Hariadi earlier said that if the debt payment was not rescheduled the company would suffer a shortage of funds of about Rp 366 billion when the debts mature. (tnt)