JM seeks investors for monorail project
Bambang Nurbianto, The Jakarta Post, Jakarta
Problem after problem revolving around financial difficulties keep clouding the monorail project which is supposed to be completed in mid-2007.
After making a major decision over which company will supply the monorail trains and system based primarily on price considerations, PT Jakarta Monorail (JM) is now busy seeking more investors to finance the whole project.
JM director Sukmawaty Syukur said on Thursday that many local financial institutions had shown interest in the project.
"There are many investors interested in joining the project, particularly after we appointed the Indonesian Consortium of Monorail Industries (ICMI) which offered a lower price," she told a media conference, a few days after a rift in JM sparked by the appointment of ICMI.
Vice President of PT Andalan Artha Advisiondo Securitas (AAA) Sujoy Ganguly, a JM financial consultant, added that JM was now still discussing the financial backing with a number of companies -- both private and state-owned banks, but he refused to name them.
JM is a joint venture company supported by PT Indonesia Transit Central (ITC), which holds 55 percent of shares and Omnico Singapore Pte. Ltd., which holds another 45 percent.
Financial difficulties have been the main hurdle for the monorail project since ITC signed a memorandum of understanding (MOU) with the city administration to use Malaysian rolling stock manufacturer MTrans in 2003.
ITC canceled the agreement because MTrans failed to provide financial support for the project.
ITC and Omnico signed a joint venture agreement to establish JM in March, 2004.
JM then sought another rolling stock company to replace MTrans. The company first mulled a proposal from Hitachi, but JM later rejected the technology because the Japanese company also could not find financial support.
JM later tried to find a rolling stock company from China and South Korea's Rotem as recommended by Omnico.
However, according to Sukmawaty, the projected cost with ICMI would only be about $498 million, while with Rotem it may reach $826 million.
Omnico executives have denied the figure, saying their budget proposal was only $540 million.
Omnico executive director Leon K. L said that his company rejected ICMI technology as its quality had not been proven.
"Price is one thing, but safety cannot be compromised. It is hundreds and thousands of life that we are carrying on board every day," Leon told The Jakarta Post in a recent interview.
He even said that Omnico would leave JM if ITC insisted on going ahead with its plan to use ICMI technology.
"Omnico and the rest of its shareholders are business-focused people. We are neither a charity organization nor a political group. If the business proposal does not make sense and is not bankable and deliverable, we will choose to discontinue," he added.
Sukmawaty, however, played down Leon's criticism, saying that ICMI's Monorail was a proven technology, which had been in use for 40 years.
"If Malaysia can develop its own monorail, why can't we?" said Sukmawaty, adding that three members of ICMI -- Bukaka and state owned rolling stock manufacturer INKA and state owned electronic industry LEN -- have the capability to develop a monorail.