Sutiyoso seeks loans for Texmaco to make buses

Sutiyoso seeks loans for Texmaco to make buses

JAKARTA (JP): The city administration is seeking soft loans to
be channeled to Texmaco to enable the conglomerate to manufacture
buses that will be purchased by the government as part of its
public transportation rejuvenation program.

Governor Sutiyoso told reporters at city hall on Friday that
he would soon meet the Minister of Industry and Trade, Luhut
Binsar Pandjaitan, to discuss the possibility that the government
would provide soft loans for the program.

The rejuvenation program is estimated to cost Rp 1.56 trillion
(US$141,818).

Under the program, the city administration plans to purchase
some 2,000 Perkasa buses made by Texmaco, an integrated textile
and engineering conglomerate.

However, the company had earlier announced that it wouldn't be
able to even start manufacturing the buses because no banks were
willing to provide loans.

The city has 5,411 large buses and 4,981 medium buses that are
currently operated by 14 bus companies.

It plans to replace 3,181 buses, which have been in operation
for the past nine years, while another 1,286 buses, which have
been in operation for the past seven years, would be replaced
next year.

The city administration had earlier planned to import buses
from China with prices ranging from Rp 160 million to Rp 250
million each, excluding 60 percent import tax.

The governor demanded the lowering of the import tax because
it would be difficult for local bus companies to buy the buses.

The central government announced that it could lower the tax
to 20 percent if the buses could be assembled by local companies.
But many doubted that local companies would be able to assemble
them due to the large number.

The administration then canceled the plan to import the
Chinese buses, earlier this year it turned to Texmaco, which
claimed to have the capability to manufacture the buses.

Sutiyoso said that the rejuvenation program seemed to have got
stuck as the plan to buy buses from PT Texmaco had to be halted
due to loan problems.

He said that the program should soon be materialized, because
otherwise, in the next two years, the city public transportation
would become "paralyzed" as it will have to impound thousands of
old buses due to their road unworthiness.

Public transportation companies have also found it difficult
to obtain bank loans to purchase new buses.

The City's Land Transportation Owners Association (Organda)
said banks refused to provide loans as they were afraid that
companies would not be able to return the loans due to the
current low bus fares, which start from Rp 300 to Rp 2,700.

The city administration earlier received an offer to buy
public buses from Korea, but no deal has been made so far.

Texmaco sought loans from Bank Mandiri last year amounting to
some $60 million to finance the procurement of materials and
components for buses and trucks ordered by the government for
military and civilian use.

The request, however, was turned down, apparently as Texmaco
still owed around Rp 19 trillion to the Indonesian Bank
Restructuring Agency (IBRA).

There was also an allegation that Texmaco had misappropriated
loans and that President Abdurrahman Wahid had ordered the
Attorney General Office not to investigate the case. (jun)