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)