Speedy agreement on subway project sought

JAKARTA (JP): Both the municipality and the consortium funding the subway project should immediately seek common ground to avoid dragging out the start of the long-awaited project, a councilor said.

Lukman F. Mokoginta of the Indonesian Democratic Party said yesterday that neither party should let financial problems, including projected fares, halt the project.

He was responding to Governor Surjadi Soedirdja's announcement Monday, that the consortium headed by Aburizal Bakrie would reject the city's offer to extend the project's concession period to more than 30 years.

Surjadi was quoted by the Antara news agency as saying the consortium would reject the offer if the train fares were set at Rp 1,800 (78 U.S. cents), instead of Rp 5,000.

At a city chapter of the Indonesian Chamber of Commerce function Surjadi said the private firms in the Indonesia, Japan and European Group (IJEG) felt they would have to wait too long for a profit if the period was more than 30 years at fares of Rp 1,800.

The Governor had earlier refused to disclose proposed fares. He had said financial negotiations were delaying the project, initially to begin in June. Financial negotiations would affect the fares, he said.

"We want affordable fares for the public," he said Monday.

Antara also quoted Surjadi as saying the city's offer to extend the concession period was coupled with a proposal to subsidize the subway's operation costs.

"The administration is prepared to subsidize the subway's operation just like Paris, London, Tokyo, and Seoul subsidize their subways," Surjadi said.

The cost of the 14.5-kilometer subway from Blok M, South Jakarta to downtown Kota is estimated at US$2.2 billion.

"The city administration wants the subway fare to be affordable to the public," he said.

He did not say how the city would subsidize the project. Earlier Surjadi announced that Rp 60 billion would be allotted from the 1997/1998 city budget to the subway project.

Initial proposals said the city was to raise $25 million a year for five years as its equity in the project, and another $35 million a year for 25 years to pay back loans.

The consortium's chairman, Aburizal Bakrie, said earlier that the consortium had agreed to provide 100 percent of the finance, 30 percent from consortium members and 70 percent from loans.

The 17-station subway is expected to ease traffic congestion.

The city and the consortium, which includes local companies PT Bakrie Investindo, PT Pembangunan Jaya, Lippo Group, PT Bukaka Corporindo and PT Steady Safe, and firms from France, Canada, Japan, the United States, Germany, and Australia, signed a memorandum of understanding in August 1995.

One of Soeharto's sons, Bambang Trihatmodjo, joined the consortium last July. (ste)