Matahari and Bukaka eye Jakarta's MRT project

Damar Harsanto and Bambang Nurbianto, The Jakarta Post, Jakarta

The Matahari and Bukaka Groups have expressed interest in taking up the US$60 million equity PT Jakarta Monorail requested from the city administration to finance the $650 million mass rapid transit (MRT) system.

Governor Sutiyoso said on Monday that several businessmen, including Robby Sumampouw of the Matahari Group, were seriously studying the project.

"They are still studying the profitability of the project and the equity-sharing scheme proposed by the consortium recently," Sutiyoso said.

Earlier, the governor also said that Lippo Group was interested in the project, but Lippo denied the news just days later.

PT Jakarta Monorail's (JM) operational director Sukmawaty Sjukur, meanwhile, said on Monday that her company had met representatives of Vice President Jusuf Kalla's PT Bukaka Teknik Utama, which has also expressed interest in producing cars for the MRT.

According to her, Bukaka would cooperate with state-owned train maker PT INKA.

"They said they would soon make an official offer to Jakarta Monorail. We welcome any party interested to cooperate with us, including domestic investors," he told The Jakarta Post on Monday.

Desperate to secure loans needed to finance the project, JM -- which Sutiyoso directly appointed to build and operate the country's first MRT system for at least the first 30 years -- had asked the city administration to inject $60 million as equity into the project.

Although the proposal was widely criticized, Sutiyoso has expressed readiness to invest in the endeavor.

The administration is also considering approving JM's proposal to use cheaper technology, rather than Japanese Hitachi technology.

"I will depart for South Korea and the People's Republic of China early next month to see their MRT technology and make a comparison between cheaper technologies and Hitachi's," he said.

According to him, the administration will make a final decision on the technology adopted next month.

He acknowledged that uncertainties had slowed the project's progress, making it likely that the target for operation, which had been set for the end of 2006, would not likely be met.

"JM has promised to make up the time lost due to the financing problem. But, I think it will miss the target. Hopefully, the MRT will be operational by early 2007 at the latest," he added.

JM, which is owned by PT Indonesia Transit Central (ITC) and Omnico Singapore, Pte. Ltd, has also asked for an annual tariff subsidy of up to $20 million for up to eight years to keep the MRT fare at an "affordable" Rp 5,000.

JM has also asked the administration to impose a policy whereby fees would be charged for traveling on roads parallel to the MRT's corridors to boost MRT passengers, who would presumably be discouraged from driving.