Jakarta Outer Ring Road project may resume next month

JAKARTA (JP): The Jakarta Outer Ring Road (JORR) project may resume next month, Minister of Settlement and Regional Infrastructure Erna Witoelar said on Friday.

"If everything goes well between state-owned toll road company PT Jasa Marga and Malaysia's DRB-Hi Com, the preparations for the project should be completed this month and the construction could resume in February," Erna told a media briefing at her office here.

The 63-kilometer JORR toll road project which will link all outlying areas of Jakarta is designed to ease traffic congestion in the capital.

The total investment in the project is about Rp 5 trillion (US$526.3 million), she said.

"Looking at the traffic congestion and the road condition in Jakarta, we have no choice but to build more roads.

"This way, those who can afford the toll charges can use the ring road and it will ease the traffic congestion in Jakarta," Erna said.

The minister, however, declined to elaborate on the funds allotted to clear the land for the project.

"We only have about Rp 800 billion .. we fear that if we give out details, the land broker will take advantage of this and we will not have adequate funds to complete the project," she said.

A special team involving the related offices, including the Jakarta administration, to deal with the land matters has been set up.

"The Jakarta administration will help us in this matter because the project concerns a lot of parties and therefore has to be dealt with carefully," Erna said.

The toll charges will be determined by the government.

Erna also asserted that "the project will not involve the previous investors".

JORR's initial investors, namely, PT Citra Mataram Satriamarga Persada, PT Marga Nurindo Bhakti and PT Citra Bhakti Margatama Persada, are linked to former president Soeharto's daughter Siti Hardijanti Rukmana, also known as Mbak Tutut.

They had obtained a contract from Jasa Marga to operate the toll roads under a Build-Operate-Transfer (BOT) scheme before the crisis hit the country in mid-1997.

The three investors financed the project with loans from local banks worth Rp 1 trillion. The loans was not honored after the government suspended the JORR project in 1998.

The Indonesian Bank Restructuring Agency (IBRA) then took over the three companies' nonperforming loans from the nationalized banks.

IBRA and Jasa Marga then formed a joint venture, called New Co, to continue the JORR project.

New Co was founded to accommodate assets belonging to IBRA and Jasa Marga. Both parties plan to later convert their loans into equity in the new company.

The project's initial investors had only completely 40 percent of the project when the economic crisis struck the country in the middle of 1997, forcing the government to suspend work on the venture.

The remaining 60 percent of the project, at the time of suspension, was either in the construction or preparation stages.

Government records show that parts of the project still awaiting construction are roads to link Pondok Pinang and Kebon Jeruk road; Jagorawi and Cikunir; and Kebun Jeruk and Penjaringan.

Part of the ring road that will link Cikunir, Cilincing and Tanjung Priok are still in the preparation stages.

PT Citra Bhakti Margatama Persada and PT Marga Nurindo Bhakti operates the Cakung-Cikunir toll road and the Pondok Pinang- Lenteng Agung-Jagorawi toll road, respectively.

Meanwhile, Erna also disclosed in the media briefing that her office had submitted to the government a housing subsidy draft of Rp 702 billion to cover the planned development of some 110,000 low-cost houses.

"We will have a definite answer on this (low-cost housing matter) in the Cabinet's economic coordination meeting on Monday," she added. (edt)