Joint office planned for MRT project

Joint office planned for MRT project

Ahmad Junaidi, The Jakarta Post, Jakarta

Governor Sutiyoso announced on Monday that his administration
would establish an office with a Japanese consortium to realize
the US$1.5 billion Mass Rapid Transit (MRT) project.

"We will use a vacant office formerly used by a deputy
governor," Sutiyoso announced after meeting Takehiro Takeuchi, an
executive of the Japanese consortium, at City Hall.

The governor had four deputies in previous years, but the
number was reduced one to earlier this year.

Sutiyoso revealed that the Japanese government was ready to
provide a soft loan totaling US$1.5 billion with a 1.9 percent
annual interest rate for the project.

However, he said the central government had decided against
proceeding with the project in favor of other projects, such as
laying double tracks for the Java railway network.

"So I have urged the Japanese government to push the central
government to endorse the project. The project should be
prioritized," he said.

With an increased city budget, Sutiyoso stated the city
administration could pay off the loan by installment by paying
between Rp 120 billion and Rp 150 billion a year

The current city budget amounts to Rp 9.7 trillion, while next
year's budget is expected to be Rp 10.6 trillion.

Earlier, the Japanese consortium was reportedly reluctant to
commit to the project due to security concerns.

The project, which would span 15 kilometers from Jl. Fatmawati
in South Jakarta to Kota in West Jakarta, was initially planned
by a Japanese, European and Indonesian consortium in 1995.

The MRT is expected to ease traffic, which is often congested
in many parts of the city due to the lack of an integrated
transportation system.

The city administration has also failed to join hands with the
governments of the bordering towns of Tangerang, Bekasi, Depok
and Bogor, from where millions of people commute to their
workplaces in Jakarta.

In the first stage, the MRT would connect Jl. Fatmawati to the
National Monument (Monas) Park in Central Jakarta. The system
would combine an elevated track and subway.

The Japanese government initially committed to financing the
project with a special yen loan that carried a 7.5 percent
interest rate per annum. The special loan package would have a
maturity period of 40 years with a grace period of 10 years.
Construction was estimated to be completed within five years.

The project was postponed when the financial crisis hit
Indonesia in mid-1997.