KL consortium named preferred bidder in toll road project
KL consortium named preferred bidder in toll road project
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA)
has named a Malaysian consortium led by DRB-HiCom as the
preferred bidder to take over the Jakarta Outer Ring Road toll
project, the agency's senior executive said.
Mohammad Syahrial, the group head of IBRA's Asset Management
Credit division, said here on Wednesday that the privilege was
given after learning of the Malaysian consortium's serious
commitment to carry out the delayed project.
"Other investors wanted everything ready first, what they will
get from the deal already laid out. This consortium was there
when everything was still uncertain," he said after a media
conference here.
Furthermore the consortium had agreed to provide Rp 800
billion (about US$81.6 million) for land acquisition which was
supposed to come from the government, Syahrial said.
The Malaysian consortium comprises two subsidiaries of the
semi-governmental company BRD-HiCom BHD -- Perspec BHD and
Comtrac BHD, as well as Roadbuilder SDB BHD, and Ranhill
Corporation SDN BHD, he said.
The Jakarta Outer Ring Road was initially constructed by PT
Citra Bhakti Margatama Persada, PT Citra Mataram Satriamarga
Persada, and PT Marga Nurindo Bhakti under a build-operate-
transfer (BOT) scheme with state-owned toll operator PT Jasa
Marga.
The three companies partly owned by former president
Soeharto's daughter Siti Hardijanti Rukmana, also known as Tutut,
obtained about Rp 1.15 trillion in loans from local banks to
finance the project.
But the toll road project, which would link all outlying areas
of Jakarta and ease traffic congestion in the center of the
capital, was suspended in 1998 as part of the government's
retrenchment program to cope with the economic crisis.
Syahrial said IBRA took over 87 percent of the companies'
total bad debts or about Rp 1.07 trillion as the three companies
could not repay them. In return, the companies surrendered the
toll road project to the agency.
The 69.3 kilometer road had been more than 30 percent
completed when the project was suspended.
"The road is now 30 percent operational, another 20 percent is
still under construction, while the other 50 percent hasn't been
built yet," Syahrial said.
He said that IBRA and Jasa Marga had established a new company
under the name of PT Jalantol Lingkar Luar Jakarta (JLJ) in Dec.
2000 to take care of the toll road project and take
responsibility for settling its debts to IBRA.
The new company would later convert its debts to equity or
issue convertible bonds to IBRA as part of the debt restructuring
deal with the agency.
After the conversion of the debts JLJ ownership composition
would be 90 percent owned by IBRA and 10 percent owned by Jasa
Marga, he remarked.
"Currently Jasa Marga has 100 percent ownership in the new
company," Syahrial said.
He added the government needed to issue a new operating
agreement to Jasa Marga and JLJ as well as preparing the new
recruitment before formally inviting the Malaysian consortium.
Syahrial said that he expected the preparations to be finished
by March and construction to commence in April this year.
The continuing construction would need an investment of about
Rp 4 trillion, he said, of which the Malaysian consortium has
agreed to boot Rp 1.2 trillion, while the other Rp 2.8 trillion
would be financed by new bank loans.
The Malaysian investors would own 53 percent in JLJ, with IBRA
and Jasa Marga holding the remaining 47 percent, he said, adding
that IBRA would further negotiate so that the government would
hold the majority of the company.
Edwin K. Abdullah, also senior executive at IBRA's Asset
Management Credit, said that the government initially estimated
the total cost of the project would reach about Rp 6 trillion.
"The 6 trillion rupiah was the amount we came to on account of
a special yen loan that we were considering then. The loan
required us to import 50 percent of raw materials used in the
project, which in effect ballooned the cost," he said.
But with the entrance of the Malaysian investors, the costs
could be lowered to Rp 4 trillion because some of the raw
materials such as cement and steel would be procured locally.
However, should the Malaysian consortium back out of the
project, there are five other foreign investors eying the project
from Germany, Japan, Hong Kong, Malaysia, and the Philippines.
"If they (Malaysian consortium) back out then the project
would go to open tender," he said.
To sweeten the deal the government had agreed to increase toll
fees to up to Rp 500 a kilometer by 2003 from the current Rp 310
a kilometer, Syahrial said. (tnt)