Public interest at stake in monorail project: Experts

Public interest at stake in monorail project: Experts

The Jakarta Post, Jakarta

The Jakarta Transportation Council (DTK) and city councillors
warned over the weekend that they were unwilling to risk public
money in the ambitious monorail project worth $650 million.

"I am afraid that giving (developer PT Jakarta Monorail) a
form of a subsidy or loan will further entrap the Jakarta
administration in what is a flawed contract so that it has to
shoulder the burden of the project in the future. Worse still,
the interests of Jakarta residents as taxpayers will be at
serious risk for at least 30 years to come as stated in
contract's term," DTK chairman Sutanto Soehodho told The Jakarta
Post on Sunday.

"We have to stop this (contract) from getting worse. It has
gone wrong and we cannot let the residents bear the
administration's mistakes in the project," Sayogo Hendrosubroto,
head of the City Council's commission D on development affairs
and transportation told The Post.

Both Sutanto and Sayogo were asked to comment on the progress
in the monorail project. Earlier Sutiyoso's Jakarta
administration indicated it would approve a tranport subsidy for
the monorail project as requested by consortium PT Jakarta
Monorail (JM) to allow it to maintain its fares at an affordable
level.

The consortium had asked for an annual subsidy of up to $20
million for up to eight years. The administration has tried to
lower the cost of the subsidy by requesting the consortium switch
to cheaper monorail technology from South Korea or the People's
Republic of China instead of the more expensive Hitachi
technology, which it says is pushing up the project's value.

Sutanto, who is also a transportation expert at the University
of Indonesia, suspected an increase in the predicted project cost
initially proposed by the consortium.

"The consortium has been playing around with changes it
incessantly offers to the administration, like an equity-sharing
scheme, an electronic road pricing scheme and now a tariff
subsidy. I am afraid that the consortium doesn't really have the
money it boasted earlier of having and therefore continues to go
to the administration to ask it to help finance the project," he
said.

He referred to other requests made earlier by the company to
the administration to put $60 million equity into the project and
to apply a road pricing traffic policy along the monorail routes,
which would increase the cost of transport in parts of the city
and ensure a high level of customers would use the cheaper
system.

Sutanto called on the administration to immediately terminate
the contract and open a tender to look for serious bidders who
really had the cash to make the project happen.

PT Jakarta Monorail, which is owned by PT Indonesia Transit
Central (ITC) and Omnico Singapore, Pte. Ltd, has been appointed
to build two monorail lines totaling 27.8 kilometers in the
capital.

Meanwhile, Sayogo said that the commission D would seek
clarification from the consortium over the significant changes it
made to the project recently.

"We have already put a time to meet with the consortium in our
schedule this week," he said.

The consortium has repeatedly insisted it faces no financial
difficulties in pursuing the project and said it was close to
finalizing the deal.

Playing down all lingering obstacles, it says stage one of the
project could still be operational by the end of next year.

However, so far there has been little progress made since the
initial groundbreaking ceremony on Jl. Asia-Afrika, Central
Jakarta in mid-June last year, which was officiated by then
president Megawati Soekarnoputri.