ITC picks local trains amid rift with partner
Damar Harsanto, The Jakarta Post/Jakarta
The majority shareholder of PT Jakarta Monorail (JM), PT Indonesia Transit Central (ITC), decided on Thursday to pick local companies that can supply trains using technology provided by Siemens of Germany for the Jakarta monorail project.
The decision was made despite strong objections from its foreign partner, Omnico Pte. Ltd of Singapore, which claimed that ITC had made the decision unilaterally.
ITC, which owns 55 percent of the consortium, prefers to use local rolling stock with the technology provided under license by Siemens in order to reduce the cost of the monorail, while Omnico, which holds 45 percent of the project, is insisting on the use of magnetic levitation (Maglev) technology from South Korea's Rotem.
"We have decided to use Siemens technology for the monorail as we deem it to be cheaper ... Jakarta Governor Sutiyoso supports our decision," ITC president director Ruslan Diwirjo told reporters after a meeting with officials at City Hall.
Ruslan said that the use of local trains would bring the total cost down to less than US$500 million, much lower than the estimated cost of $826 million should Maglev technology be used.
Reacting to Ruslan's statement, Omnico chairman Abdul Rachman strongly objected to the decision, arguing that it had been made without any discussion with his company.
"We don't agree (with the decision). The fact that we have only 45 percent and are the minority shareholder does not mean that they (ITC) can do whatever they want ... I am very disappointed with this," he said.
He denied the statement that the use of Maglev technology would significantly inflate the cost.
"This statement is simply not true. The total price of the system is only $540 million, not $826," he said, while acknowledging that his company had yet to calculate banking and consultancy fees.
Despite the objection, he said his company could not withdraw from the consortium due to the various commitments involved in the project, including those made by the Singaporean, Japanese, Chinese and Indian governments, besides the Jakarta administration.
"But, we want to see what happens after this," he said, adding that his company had spent one-and-a-half years and huge sums of money on the project.
Meanwhile, ITC director Sukmawaty Sjukur said that the JM would go ahead with or without Omnico.
"We are ready to replace Omnico's 45 percent shareholding in the consortium with other companies from China, Malaysia and some local companies, should it withdraw," she said.
She added that JM would gather all local investors at City Hall to discuss the project's follow-up on Friday afternoon.
A local consortium led by Bukaka Group, which partly belongs to the family of Vice President Jusuf Kalla, is willing to supply the trains, JM has revealed.
The consortium will involve state train car maker Inka and state electronics maker LEN Industry.
JM said that Hongkong company, Mass Transit Railway Cooperation (MTRC), would be in charge of overseeing the rolling stock and system. American investment bank JP Morgan would look for foreign financiers for the project, while AAA Security would be responsible for getting local financiers.
The monorail system will consist of two lines. The first line, called the Green Line, will link the lucrative business districts of Kuningan and Sudirman in South Jakarta, while the second line, called the Blue Line, will serve a less lucrative corridor from Kampung Melayu in East Jakarta to the Taman Anggrek shopping center in West Jakarta.