Omnico quits monorail consortium, Sutiyoso says

Omnico quits monorail consortium, Sutiyoso says

The Jakarta Post, Jakarta

In another blow to the country's hopes of attracting foreign
investment to the infrastructure sector, Governor Sutiyoso has
announced the withdrawal of Omnico Singapore Pte. Ltd. from PT
Jakarta Monorail (JM), the consortium selected to construct and
operate the city's monorail project.

"Omnico is no longer in the consortium. PT Jakarta Monorail
has a new partner," Sutiyoso told reporters at City Hall after a
meeting with JM executives on Thursday.

PT Jakarta Monorail is owned by PT Indonesia Transit Central
(55 percent) and Omnico Singapore Pte. Ltd. (45 percent).

Sutiyoso did not say why Omnico had quit the consortium nor
give any details of the new partner. He did hint, however, that
the new partner was a foreign company.

"They (JM executives) have just informed us at today's meeting
that they will sign a deal with investors by the end of this
month," Sutiyoso said.

He also said that some local investors had expressed interest
in taking part in the project.

"They (the executives of PT Jakarta Monorail) have promised
that they will finalize the financial stuff by the end of this
month and then they will proceed to fast-track the development of
the project," Sutiyoso said.

PT JM president director Ruslan Diwiryo and director Sukmawaty
Syukur, who were present during the meeting, declined to comment
on Sutiyoso's statement.

But through her cellular phone, Sukmawaty said pm Thursday
evening that JM was still in the process of increasing the
company's capital.

In trying to increase the company's capital, she said, ITC has
the right to dilute Omnico's shares if it fails to add shares,
and replace it with another company.

"There are many other investors who are interested in the
monorail project," she added.

Omnico's executive director Leon K.L. denied on Thursday that
his company had quit the consortium, but refused to go into
details.

"No, we have not quit the consortium. Who said so? But I
cannot explain today because I'm at a meeting ... I will answer
your questions tomorrow (on Friday)," Leon told The Jakarta Post
by cellular phone on Thursday.

The appointment of the Indonesian Monorail Industry Consortium
(ICMI), which is partly owned by Vice President Jusuf Kalla's
Bukaka Group, to supply the rolling stock has sparked rifts
between PT Indonesia Transit Central (ITC) and Omnico.

Omnico has rejected ITC's decision to use ICMI technology and
proposed rolling stocks produced by South Korea's Rotem instead.

"Price is one thing, but safety cannot be compromised!
Hundreds of thousands of people will be carried by the monorail
everyday," Leon told the Post in the recent interview.

He also said that Omnico would prefer to quit PT Jakarta
Monorail if ITC insisted on going ahead with its plan to use ICMI
technology.

"Omnico and the rest of the shareholders are business-focused
people. We are neither a charity organization nor a political
grouping. If the business proposal does not make sense and is not
bankable and deliverable, we will chose to discontinue," he said.

ICMI is a local consortium led by Bukaka, whose shares
are partly owned by Jusuf Kalla and two state firms. The
consortium is supported by state rolling stock manufacturer PT
INCA and the Bandung-based, state-owned National Electronics
Institute (LEN).

Leon said earlier that Omnico had invested some US$10 million
in the project, but Sukmawaty denied Leon's statement.

"There is no evidence that Omnico has invested that much
money," she asserted.

Sukmawaty said that the total project cost would only be $489
million if JM used ICMI technology, while with Rotem the cost
would come in at $826 million.