MOU on subway project signed
JAKARTA (JP): Governor Surjadi Soedirdja and representatives of a multinational consortium signed a memorandum of understanding yesterday to prepare a basic design for Indonesia's first subway system.
Under the memorandum, the consortium, called the Indonesia- Japan-Europe group, will handle the basic design of the US$1.3 billion subway project.
Yesterday's signing ceremony was attended by Minister of National Development Planning/Chairman of the National Development Planning Board Ginandjar Kartasasmita, Minister of Research and Technology B.J. Habibie, Minister of Public Works Radinal Moochtar and Minister of Transportation Haryanto Dhanutirto.
The basic design is expected to cost an estimated US$8 million, of which $5 million will be provided by foreign companies, $2.5 million by local firms and the remaining $500,000 by the city administration.
The foreign investors joining the consortium consist of Japanese companies led by the Itochu Corp. and European firms by Ferrostaal AG of Germany.
The Indonesian investors, led jointly by PT Citra Lamtorogung owned by Siti Hardiyanti Rukmana, President Soeharto's eldest daughter, and PT Bakrie Investindo, a subsidiary of Bakrie Group, consist of PT Pembangunan Jaya, PT Lippo, PT Bukaka/PT Kuda Perkasa, PT Suhamthabie and PT Steady Safe.
"The Indonesian investors' portion in providing the funds will be divided equally among members of the group," Aburizal Bakrie, president of Bakrie Group, told reporters after the signing.
Aburizal explained that the consortium will also be assigned as the group to handle the construction of the subway project.
The funds invested in the basic design's preparation will become part of the investors' equity in the project, he said.
The making of the basic design, which will include feasibility studies on the project's technical, financial and environmental aspects, and the calculation of ticket fares, will start in September and is expected to be completed within one year.
As soon as the basic design is completed, a joint venture between the city administration and the consortium will be set up under the name the Jakarta Metro Corporation (JMC), which will be in charge of overseeing the project.
"JMC will later open tenders to select companies, which will participate in the construction of infrastructure, the provision of rolling stocks and the establishment of properties," Aburizal said, adding that those companies will work under the build, operate and own (BOO) system.
Habibie, who is also the head of the steering committee of the subway project, said that the 14.5-kilometer subway system is but the first phase of Jakarta's underground system, which will cover a total of 280 kilometers.
"This system is expected to help solve traffic problems in the city," Habibie said, adding that hopefully this first phase will be completed by Aug. 17, 2001. (yns)