Sutiyoso wants in cheap for big transportation projects
Sutiyoso wants in cheap for big transportation projects
The Jakarta Post, Jakarta
Amid pressure for better transportation and infrastructure in the
capital, Governor Sutiyoso suggested on Wednesday that the
estimated expense of the ongoing monorail project and the planned
mass rapid transit project were too high.
He said it was necessary to reduce the cost of both projects.
"I'm not sure about the estimated total cost ... but the cost
should be lower, there is no floor price to it," he said after
meeting with Vice President Jusuf Kalla, Minister of
Transportation Hatta Radjasa and State Minister of State
Enterprises Sugiharto.
The meeting was held to discuss Jakarta's infrastructure
budget, including funds for the monorail, the mass rapid transit
(MRT) and the Jakarta New Port projects.
The monorail, construction of which began last year and is
expected to be completed in 2007, is valued at US$650 million.
It is being built by a consortium of investors grouped in PT
Jakarta Monorail.
Sutiyoso argued that the Japanese technology used in the
construction had inflated the cost.
"We'll review whether we can apply Chinese technology ...
cheaper is better so we can resume construction."
If the administration decides to terminate the agreement, it
will be the second such failure in the last 13 months. Early last
year, it scrapped an agreement with Malaysian firm MTrans
Holding.
The project has been stalled since a groundbreaking ceremony
last year that was officiated by then president Megawati
Soekarnoputri.
The city administration failed to the acquire land in the
initial planned path of the project, causing the developer to
change the blueprint a number of times.
When the Sutiyoso administration decided to expedite the
deadline to 2006, the consortium had difficulty in securing soft
loans from foreign investors Hitachi and the Japan Bank for
International Cooperation.
Instead the developer offered the government an equity sharing
scheme, which required the latter to provide $60 million, or 30
percent of the initial capital outlay.
"The central government, the Jakarta administration, state
enterprises and private investors will be invited to participate
in the scheme," Sutiyoso remarked, expressing hope that the
financial matter could be settled this year.
He also revealed that the central government would soon
complete all paperwork on the MRT, the construction of which is
expected to start early next year.
Sutiyoso said that the government had offered soft loans from
Japan with an interest of 1 percent per year.
"Still, the value of the project is considered high at Rp 500
billion for each kilometer of MRT track," he complained.
The MRT will stretch from Lebak Bulus in South Jakarta to
Dukuh Atas in Central Jakarta, with underground stations at Ratu
Plaza in Senayan and Dukuh Atas, a distance of approximately 3.5
kilometers.