Investors urged to start Madura bridge project

Investors urged to start Madura bridge project

JAKARTA (JP): The government will wait until next month for
private investors to decide if they will go ahead with their plan
to build a bridge linking Java and Madura island.

Minister of Public Works Radinal Moochtar said yesterday the
government had improved its offer on the bridge-operating
concession from 25 years to 35 years.

"We are offering a concession of 30 years. It's up to them to
take it or leave it," Radinal said after reporting to President
Soeharto on the development of major public works projects.

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

The much-debated planned construction of the six-kilometer
Surabaya-Madura bridge in East Java has been postponed several
times. Construction was initially scheduled to commence in 1995.

The parties involved in developing the US$250 million bridge
include the Japanese Overseas Economic Cooperation Fund (OECF),
as a creditor, industrial investors led by the Salim group and
East Java's water company. OECF is committed to providing 80
percent of the finance.

Radinal said that OECF had demanded a government guarantee for
its planned loan to the project, but the government refused.

"The bridge will operate as a toll road, and the government
never guarantees credits for toll roads. So, they must rely on
the project's revenue," Radinal said.

Radinal did not mention the development of the Banyuwangi
(East Java)-Gilimanuk (Bali) bridge yesterday.

The Ministry of Public Works has licensed Scotia Bali Bridge
Co. -- a consortium of PT Mitra Trans Balongan Indonesia, Scotia
International Associates and Brown Beach and Associates Ltd of
Britain -- to construct a five-kilometer suspension bridge from
Java to Bali.

These two mega projects are part of the Tri Bima Nusa Sakti
package of projects ordered by President Soeharto in 1985,
whereby the President instructed Minister of Research and
Technology B.J. Habibie to build three bridges linking Sumatra
and Java, Java and Madura and Java and Bali.

Radinal said the government was studying a proposal from
private investors -- led by a corporation owned by Soeharto's
grandson Arie Sigit -- to construct the 60-kilometer Java-Sumatra
bridge.

"We are still studying it to decide whether it is feasible or
not... The existing feasibility study is very superficial, so we
need a more in-depth feasibility study on the project," Radinal
said.

Radinal also told Soeharto about the development of bridges in
Irian Jaya, including a 235-meter-long bridge and a 560-meter-
long bridge over Memberamo river. Construction of the bridges is
expected to be completed next year.

Radinal also reported on the construction of the 546-kilometer
road linking Jayapura and Wamena in Irian Jaya. (rid)