Subway finance proposals to get response soon

Subway finance proposals to get response soon

JAKARTA (JP): Within two months the municipality is expected
to announce its response to finance proposals for the Mass Rapid
Transit subway project from Blok M in South Jakarta to Kota in
West Jakarta.

Deputy Governor for Economic and Development Affairs Tb.M.
Rais said yesterday that State Minister of Research and
Technology B.J. Habibie, who heads the project's steering
committee, had requested a report within two months.

"But if possible we hope to report sooner" to speed up the
issuance of a presidential decree, Rais said.

The construction of the Mass Rapid Transit (MRT) project,
estimated to cost US$1.5 billion, cannot begin before a decree is
issued.

Construction is scheduled to begin next year.

The proposals from the subway's project management unit urge
the reactivation of lapsed city taxes, the introduction taxes on
new sources and more existing taxes.

The proposed taxes include a motor vehicle tax and a tax on
traffic during peak times.

The proposals, presented at earlier seminars by the project
management unit, also include the structure of finance for the
government and private investors.

Rais said the municipality would also consider government-to-
government, government-to-private and private-to-private channels
of finance.

The proposed taxes are to help the city raise $25 million a
year for the project over the next five years.

The new tax revenue is also to help pay $35 million a year,
for 25 years, in loan repayments, an executive of the project
management unit, Slamet Soelarno, said at a seminar in April.

Rais also said that Habibie had requested that the
municipality review the proposed site of the MRT workshop in
Kampung Bandar, North Jakarta.

The workshop could also be located in South Jakarta, he said.
(anr)