Subway cut in length and delayed again

Subway cut in length and delayed again

JAKARTA (JP): The capital's repeatedly delayed subway project,
scheduled to begin next year, will be postponed again until the
year 2000, deputy governor for development affairs Budiardjo
Soekmadi said yesterday.

Budiardjo gave no specific reasons for the new delay and said
the budget for the project had been substantially cut, along with
the length of the planned construction.

The subway, which was originally supposed to cover a 14.5
kilometer stretch between Blok M in South Jakarta and Kota in
West Jakarta, has been cut to 12 kilometers in length.

Under the new plan, the subway will stretch from Jl. Fatmawati
in South Jakarta to the National Monument park in Central
Jakarta.

This will allow the budget to be cut from US$1.5 billion to
US$1.2 billion.

Itochu Corp. of Japan will still undertake construction work
on the project, despite the significant changes which have been
made.

"The central government has agreed to the project in principle
but it will be discussed further by a joint team from the city
administration and the transportation ministry which will be set
up as soon as possible," Budiardjo told the media after a meeting
with Itochu representatives and central government officials at
the City Hall.

The meeting was also attended by Minister of Communications
Giri Suseno Hadihardjono.

Last month, upon his return from a controversial trip to
Manila, Governor Sutiyoso announced that the project would start
next year with Itochu as the main developer. The Japanese company
replaced a consortium of Indonesian, Japanese and German
companies called the Indonesia Japan Europe Group (IJEG).

Sutiyoso said IJEG's proposal for the project cost "too much
money and used too much high-tech equipment".

He chose Itochu because they came in with a bid of $1.5
billion to do the work. IJEG submitted a proposal with a budget
of $2.4 billion.

The cooperative agreement between the city administration and
IJEG, in which Itochu led the Japanese companies, was signed in
August 1995.

The project was initially scheduled to start in April last
year but was delayed because of the monetary crisis.

Budiardjo said that the project would be financed by a soft
loan from Itochu and the Japanese government at an interest rate
of 0.75 percent per annum with an option to repay it over 40
years.

He said the central government would help to pay back the
loan. (ind)