Jakarta welcomes investors for its subway project

Jakarta welcomes investors for its subway project

JAKARTA (JP): Governor Sutiyoso welcomed on Thursday the
interest of a Taiwan-based consortium to take part in the
country's first subway project here, which has been lagging due
to uncertainty over financial sources.

Speaking to reporters after meeting a group of three visiting
business representatives from Taipei, Sutiyoso said that his
administration was hopeful that the Taiwanese consortium would be
able to provide a soft loan similar to that offered earlier by
the Japanese government.

"I don't know whether the consortium will be able to do it or
not. They are from the private sector, not the government sector
like the Japanese," the governor said.

Sutiyoso, however, gave no further explanation of the
"interest" of the Taiwanese, who were accompanied by agriculture
expert Bungaran Saragih and a local man.

"I know nothing about the meeting," Bungaran, a senior
lecturer at Bogor's Agriculture Institute, told reporters.

There were also no words from the visiting Taiwanese, one of
whom named himself as a deputy secretary general of the
Kuomintang nationalist party.

Their company's name was also unavailable but city officials
said that they specialize in constructing airports, highways and
subways.

The city administration has proposed the construction of the
mega-project, estimated to cost some US$1.5 billion, since 1997,
when former president Soeharto still ruled the country.

It was postponed after the country was hit by the monetary
crisis.

The Japanese government had earlier given its commitment to
finance the project, promising a special yen loan with a 7.5
percent annual interest rate. The special loan will have a
maturity period of 40 years with a grace period of 10 years.

The project already received strong support from both
President Abdurrahman Wahid and Vice President Megawati
Soekarnoputri.

Until today, there has been no clear signals about when the
construction would start.

No sign

The central government has given no clear sign about whether
or not they still support the plan and whether they would help
seek foreign investors to realize the project.

"I don't think the central government is giving top priority
to the project. I heard it's been placed on third priority,"
Sutiyoso said on Thursday.

"We don't know for sure when the construction will begin if
it's placed in third priority," he added.

The first stage of the subway project will serve a 15-
kilometer route from Fatmawati in South Jakarta to the National
Monument (Monas) park in Central Jakarta with 13 stations, before
continuing on to downtown Kota in West Jakarta.

Assistant to the City Secretary for Development Affairs Ongky
Sukasah, who also attended the meeting with the Taiwanese, said
the delegates also conveyed their intention to import hydrocarbon
resources from Indonesia.

"Once they're committed to invest in the project, they will
import crude oil, coal and natural gas in large quantities. But
they need a guarantee that we'll be able to provide the supply
over a long term," he told The Jakarta Post.

Head of City Development Planning Board Bambang Sungkono, who
was also at the meeting, said it was almost impossible for the
city administration to take an off-shore loan.

"Although we have Law No. 25/1999 on Central and Regional
Financial Balance, I don't think the central government will
allow us to self-finance the project by taking an off-shore
loan," he said. (nvn)