JORR tender winner unveiled in August

JORR tender winner unveiled in August

JAKARTA (JP): The tender process to find new strategic
investors for the 56.87 kilometer Jakarta Outer Ring Road (JORR)
project is expected to be finalized by late August, a senior
executive said on Monday.

Abdul Hadi Hasbullah, president of PT Jalantol Lingkarluar
Jakarta (JLJ), said here on Monday interested parties were
invited to join the pre-qualification by June 8 at the latest.

"The winner of the tender will be announced by August 20," he
told a media conference following an investor forum on the JORR
tender here.

JLJ, which was established in December last year to resume the
operation of the delayed toll project, has established a special
team in charge of the tender procedure which will screen each
participant. The team will be supported by legal representative
Hadiputranto, Hadinoto & Partners, and financial consultant PT
Ernst & Young Consulting.

The Malaysian consortium, which has been granted preferred
bidder status in the tender, should also join the pre-
qualification, Abdul said.

The Malaysian consortium comprise of two subsidiaries of the
semi-governmental company BRD-HiCom Bhd -- Perspec Prime Sdn Bhd
and Comtrac Sdn Bhd, as well as Road Builder Sdn Bhd, and Ranhill
Sdn Bhd.

"If the consortium fails in the pre-qualification stage, then
the tender team would automatically disqualify the Malaysian
consortium from continuing in the tender despite its status as
preferred bidder", he added.

Simon Subrata from Ernst & Young Consulting said that those
shortlisted from the pre-qualification stage would be announced
on June 15 and would be given time for due diligence before
submitting their final bids on Aug. 3.

Simon said that bidders should propose a toll charge not
higher than Rp 500 (about US$0.043) per kilometer during the
first three years beginning 2003. In addition, they should also
pledge to spend at least Rp 800 billion for road development and
another Rp 800 billion for land acquisition.

He said that the bidders should also agree to deposit funds of
about Rp 1.2 trillion in six months in an escrow account to be
used to finance the project and repay the debt of the former
developer.

"By that arrangement, the composition of shares in JLJ would
be 60 percent for the strategic investor, Jasa Marga 10 percent,
and IBRA 30 percent," Simon said.

The investor should be able to finish construction of JORR
within four years after the signing of the shareholders'
agreement, he added.

Simon said as a preferred bidder, the Malaysian consortium is
being given a 10 percent margin preference to match the lowest
toll charge proposed by other bidders.

"It means that if the consortium's proposed toll charge is 10
percent higher or the same as the best bid, it is allowed to
match. But if the margin is higher than 10 percent, then the
consortium will be automatically disqualified," he said.

Simon also said that companies eligible to tender are those
that have no connection directly or indirectly with the previous
investors of the toll road project, and that this fact should be
stated clearly in a letter included in the pre-qualification
proposal.

The JORR project was initially constructed by PT Jakarta
Lingkar Baratsatu, PT Citra Mataram Satriamarga Persada (CMSP),
PT Marga Nurindo Bhakti (MNB), and PT Citra Bhakti Margatama
Persada (CBMP), under a build-operate-transfer (BOT) scheme with
state-owned toll operator PT Jasa Marga.

The road will run from Penjaringan-Kebon Jeruk, Kebon Jeruk-
Pondok Pinang, Pondok Pinang-Jagorawi-Cikunir, and
Cikunir-Cakung-Cilincing.

When the economic crisis hit Indonesia in 1998, the government
was forced to postpone the project as part of its retrenchment
program.

Except for Jakarta Lingkar Baratsatu, in charge of the
Penjaringan-Kebon Jeruk leg of the road, the other three
investors were deemed to be in default by the Indonesian Bank
Restructuring Agency (IBRA) and their assets taken over.

The three companies were closely linked with former president
Soeharto's daughter Siti Hardiyanti Rukmana, also known as Tutut.

JLJ director for financial and general affairs Anhar Rivai
said some 57 companies took part in the investor forum on Monday,
a majority of which came from local companies.

Foreign companies that attended the forum included those from
the United States, Australia, the Netherlands, Italy, Hong Kong,
Japan, Malaysia, and France, he said.

Earlier Minister of Settlement and Regional Infrastructure
Erna Witoelar said that local toll road operator PT Citra Marga
Nusaphala Persada (CMNP) has also expressed interest to join the
tender process. (tnt)