Subway project's new proposal submitted
JAKARTA (JP): The consortium wanting to build the long-awaited subway project has submitted a new financial proposal after the municipality turned down its previous one in March.
Deputy Governor of Economic and Development Affairs Tb.M. Rais told The Jakarta Post yesterday that the submission of the new proposal was aimed at helping solve the project's financial constraints, long-accepted as the main cause of the project's delay.
"The new proposal has been given to me, but no decision can be made at the moment because it has to be presented to the governor first," Rais said.
The consortium in charge of the project, IJEG, consists of Indonesian, Japanese and European companies. An agreement to build the project was signed by the consortium and the municipality in August 1995.
The Japanese companies are led by Itochu Corp., while Germany's Ferrostaal AG heads the European firms.
The Indonesian investors, led by businessman Aburizal Bakrie, are PT Bakrie Investindo, a subsidiary of the Bakrie Group; PT Pembangunan Jaya; PT Lippo; PT Bukaka/PT Kuda Perkasa; PT Suthamthabie and PT Steady Safe.
Rais declined to give further details of the proposed financial scheme.
On Tuesday afternoon, consortium member Bambang Yoga Sugama, met Rais to report to the municipality on the project's progress. The meeting was also attended by the head of the City's Development Planning Board, Budihardjo Soekmadi.
Bambang Yoga officially joined the consortium after signing a memorandum of understanding in April along with Bambang Trihatmodjo -- one of President Soeharto's sons, and businessman Djoko Ramiadji.
The consortium's chairman, Aburizal Bakrie, told the Post in Bangkok last month that the government had disagreed with some aspects of the previous financial proposal.
He also attributed the delay of further talks on the project's financial problems to the absence of a negotiating partner representing interdepartmental interests.
Among the groups the partner would represent, he said, were the Ministry of Finance, the Ministry of Transportation and the National Development Planning Board (Bappenas).
Rais said yesterday, however, "the consortium can at the moment negotiate with the project's management unit," he said.
The consortium and the city administration agreed in April to extend the management unit's duty from handling the subway's basic design into covering its commercial aspects as well.
The 14.5-kilometer project connecting Blok M in South Jakarta and downtown Kota was initially scheduled to start in April and was then delayed until June.
No one can say now when work will begin on the US$2.3 billion project.
Bakrie denied that the consortium's proposed fares were the reason behind the delay in the project.
The municipality wanted to set the fares at Rp 1,800 (69 U.S. cents), far below the consortium's proposal of Rp 5,000.
The consortium has agreed to provide 100 percent of the project's funding: 70 percent from soft loans and 30 percent from the consortium members.
The 17-station subway is an initial step in a long-term plan to ease the city's chaotic traffic problems. (ste)