Monorail project going off track as city, company sling the mud
Monorail project going off track as city, company sling the mud
Bambang Nurbianto and Damar Harsanto, The Jakarta Post, Jakarta
At least two transportation observers are calling for the
termination of a contract between the Jakarta administration and
a consortium of investors grouped under the company PT Jakarta
Monorail.
They claim that the private company is not financially
credible nor able to carry out the ambitious monorail project
valued at US$650 million.
The consortium has requested that the administration provide
$60 million, or 30 percent of the initial capital outlay of about
$200 million.
In the original agreement, the consortium said it could wholly
fund the monorail project and the administration would only have
to provide the necessary legal permits.
The City Transportation Council (DTK) chairman Sutanto said
that the administration had the right to terminate the agreement
because the project had been stalled since a groundbreaking
ceremony nearly a year ago by then president Megawati
Soekarnoputri.
Darmaningtyas of the Institute Transportation and Development
Policy (ITDP) concurred with Soetanto.
"They should not continue the project since it would only put
another burden on Jakarta taxpayers. It'd be better if the
administration terminated the cooperation."
If the administration decides to terminate the agreement, it
will be the second such failure in the last 13 months. Early last
year, it scrapped an agreement with Malaysian firm MTrans
Holding.
Meanwhile, Deputy Governor Fauzi Bowo lamented the lack of
transparency by the consortium in its financial reports to the
administration.
PT Jakarta Monorail president director Ruslan Diwirjo
responded by explaining that the company had been putting money
into the project for nearly four years, but the city still needed
to show "goodwill" in order for other investors to come through
on earlier pledges.
"We have been financing the project since 2001. Our commitment
has also been proven by our goodwill by starting some of the
construction before there was any financing arranged," Ruslan
clarified in a statement.
Ruslan admitted that they were having difficulties in securing
soft loans from foreign investors (Hitachi and the Japan Bank for
International Cooperation) but said it was because the Indonesian
government could not act as guarantor for private company
projects, but should instead show goodwill in cooperating on the
project.
Governor Sutiyoso emphasized that government participation or
an equity-sharing scheme was commonplace in similar monorail
projects in other cities, such as Manila or Bangkok.
"I have been trying to raise money from local investors, but
so far we have yet to find any who are seriously willing to
invest in us," he clarified.
The monorail project had been slated to open in 2006 under a
30-year build-operate-transfer scheme.