JM seeks investors for monorail project

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.