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.