Jakarta Outer Ring Road project may resume next month
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)