Sutiyoso sets conditions for city to buy central government bonds

Ahmad Junaidi, The Jakarta Post, Jakarta

City administration officials have no objection to purchasing central government bonds to help offset the 2002 state budget deficit in return for the handing over of several state assets to the city.

"We are willing to buy the bonds but the government should apply the autonomy program in full by handing over their authority on the assets," City Governor Sutiyoso told reporters from City Hall.

Tanjung Priok harbor in North Jakarta, now under the auspices of the Ministry of Communication, was cited by the governor as one of the assets which should be handed over to the city administration.

Other assets include the now-defunct Kemayoran airport and Bung Karno sports stadium in Central Jakarta which are still managed by the State Secretariat.

He also demanded that the administration be involved in the management of the city toll roads which are currently managed by state-owned highway company PT Jasa Marga.

"If the central government wants to hand over the assets, we would buy the bonds," Sutiyoso said.

Sutiyoso has repeatedly asked the government to hand over assets which are located here to comply with the spirit of the regional autonomy program.

Technically, Jakarta city is a province and entitled to the benefits of the regional autonomy program.

So far the city had only secured a small amount of income from the assets such as public lighting taxes from the toll roads and property taxes from land in Kemayoran and Senayan.

The central government earlier planned to sell bonds to rich provincial governments, which have a surplus in their budgets, to cover the national deficit which was predicted to reach 2.5 percent of next year's Rp 344 trillion budget.

The bonds are actually intended to support poorer provinces.

At least four rich provinces, including Riau, East Kalimantan, South Kalimantan and Jakarta, were expected to buy the bonds. Resource-rich Riau has reportedly rejected the purchase of the bonds.

Jakarta has had a surplus of Rp 400 billion (US$40 million) over the past two years. This year's city budget was predicted to have a similar amount of surplus.

Only Rp 700 billion, 8.7 percent of this year's city budget, which amounts to Rp 8.1 trillion, came from the state budget.

The Rp 700 billion fund was mostly used to pay the salaries of the 50,000 central government employees who were handed over to the city administration following the implementation of the autonomy program this year.

Most of the city's revenue is obtained from taxes, such as vehicle taxes, and the profits from city-owned firms.