Sutiyoso backs ITC's bid in monorail deadlock
Damar Harsanto, The Jakarta Post/Jakarta
Governor Sutiyoso said on Friday that his administration agreed with PT Indonesia Transit Central (ITC)'s decision to pick local companies to supply trains for the monorail project.
"It means cheaper monorail tickets, no investment burden to be shouldered by the administration, and benefits for local industry as well," he argued.
He was referring to a proposal made by the Indonesia Consortium of Monorail Industries (ICMI), led by the Bukaka Group.
The local consortium will use Siemens technology, which it says is cheaper compared to the magnetic levitation (Maglev) technology offered by South Korea's Rotem.
ICMI, which also includes state rolling stock maker PT INKA and state electronics firm PT LEN Industry, has proposed Siemens technology at an estimated cost of $496 million, while Rotem's Maglev technology would cost $540 million, excluding bank and consultants' fees, which the ITC claims would bring the total investment required to a mammoth $826 million.
Sutiyoso admitted that ITC's partner, Omnico Pte Ltd of Singapore, had recommended the use of the sophisticated but costly Maglev technology provided by Rotem, and that Omnico had also managed to convince a leading bank in South Korea to underwrite the development of the monorail.
"But, it (the bank) requires too much, such as additional space for property developments and revenue from the implementation of electronic road pricing (ERP). Of course, we could not entertain such demands," he said.
He added that the requirements would only burden the administration and taxpayers, with the administration having to provide development space and residents having to pay higher ticket prices.
ITC director Sukmawaty Syukur said that Omnico had targeted obtaining additional revenue from property development of up to Rp 1.5 trillion annually aside from the revenue generated by ticket sales.
It also targeted securing 60 percent of the revenue from ERP, totaling $100 million per year.
Separately, Bovanantoo, the monorail's chief project officer, said that property consultants Jones Lang LaSalle estimated that the commercial developments connected to the monorail, like retail outlets and advertising at stations and pedestrian bridges, would only generate Rp 80 billion per year.
"Additional income from commercial developments is vital as the revenue we obtain from ticket sales will only cover 20 percent of total operating costs," he said.
Construction of the monorail commenced in June last year and is expected to be finished in 2007.
The monorail will cater to transportation needs in prime commercial areas through a 14.3-kilometer line, and another 13.5- kilometer line from Kampung Melayu in East Jakarta to Taman Anggrek Mall in West Jakarta.