Proposal to issue municipal bonds hailed
Proposal to issue municipal bonds hailed
JAKARTA (JP): City councilors hailed yesterday the city
administration's plan to issue municipal bonds as one of the
alternatives to help raise locally generated revenue.
Head of Commission C for financial affairs Amarullah Asbah
urged the administration to prepare all the requirements needed
for the issuance of the bonds as soon as possible.
"I'll give it my full support," he said, urging the
administration to think of other possible alternatives and to
reduce its heavy dependency on the collection of taxes and
levies.
Head of Commission B for economic affairs Djafar Badjeber said
the administration had better consult with the institutions
concerned, including the Capital Market Supervisory Agency, about
this plan so all the requirements can be studied.
The administration's plan to issue the bonds was revealed on
Monday by City Secretary Fauzi Bowo.
He said that the administration had been discussing the
possibility of issuing bonds with the Ministry of Finance and
Ministry of Home Affairs.
"Their (the ministries) responses have been supportive so far.
However, we still have to work very hard on it since there is
currently no law which regulates the possibility of a regional
administration issuing such bonds," he said.
Contributions
Fauzi said the proposal was made in a bid to help reduce the
administration's dependency on the collection of taxes and levies
as the main source of its locally generated revenue.
He said that the administration could no longer depend on
city-owned companies or joint venture firms.
"We all know that the companies' contributions to our locally
generated revenues are still too low," he said.
He said that municipal bonds were not a new idea, in some
other countries the sales of the bonds were quite popular, he
added.
Fauzi, however, did not give details on the bonds issuance
plan.
"I don't know when we could realize the plan. But the bonds
could be offered by city-owned companies to the public and
underwritten by the administration," he said.
Djafar believed that the administration would not find too
many obstacles if it could enhance the city-owned companies'
performances first.
"If the companies are to issue bonds on behalf of the
administration, then they should first improve their
performance," he said.
Head of Commission D for development affairs Ali Wongso Sinaga
said, "It will be good if the administration could issue bonds to
support its major projects, like the subway and reclamation of
northern areas of North Jakarta."
He said the management of the projects must be more
professional and transparent to compensate the funds invested by
the investors. (cst)