Price study delays subway project

JAKARTA (JP): The municipality has yet to complete its study on the fares for the city's subway, causing further delays to the US$2.3 billion transportation project.

The head of the City's Development Planning Board, Budihardjo Soekmadi, said yesterday the administration was still studying the tariffs proposed by its project partner.

"There's still a need to negotiate affordable fares with them," Budihardjo, who is one of the city officials in charge of the scheme, told The Jakarta Post.

The project, to be built jointly by the city administration and a consortium of private investors from three countries, is expected to begin soon after the negotiations between the two parties on the proposed fares are completed.

"At the moment, we can't yet submit the proposed fares because our study and the negotiations are still in progress," said Budihardjo.

The municipality, he said, wanted to set the fares at Rp 1,800 (63 U.S. cents) per person per trip, which it considered affordable for most commuters.

But this was well below the consortium's suggested fare of Rp 5,000. The private companies said this would be viable by the time the subway started operating in 2001, said Budihardjo.

As a comparison, the current fare on air-conditioned buses, the most modern mass land transportation means in the city, is Rp 1,800 per person per trip.

No date

On Monday, Minister of Transportation Haryanto Dhanutirto urged the municipality to immediately present its proposed fares to him to prevent the project being further delayed.

The ministry, also in charge of determining all public transportation fares except minivans and air-conditioned buses will consider fare proposals from both the administration and the consortium before it makes a decision.

Budihardjo said the consortium and the administration would submit their agreed proposed fares to the ministry as soon as possible, without giving a specific date.

The consortium, IJEG, consists of Indonesian, Japanese and European companies. An agreement to build the project was signed by the consortium and the municipality two years ago.

The Indonesian investors are led by businessman Aburizal Bakrie of PT Bakrie Investindo, while the Japanese companies are led by Itochu Corp. Germany's Ferrostaal AG heads the European firms.

The 14.5-kilometer project connecting Blok M in South Jakarta and downtown Kota was initially scheduled to start in April and was then delayed indefinitely.

Bakrie, told the Post in Bangkok last month that there was also disagreement on several items in the project's financial proposal.

Deputy Governor of Economic and Administrative Affairs Tb.M. Rais said last Wednesday that the consortium had submitted a new scheme expected to solve the project's financial constraints.

He said that no decision had been made on the new scheme because it would first be presented to Governor Surjadi Soedirdja. He declined to give further details.

The 17-station subway is an initial step in a long-term plan to ease the city's chaotic traffic problems. (ste)