Three foreign investors eyeing Tanah Abang

Damar Harsanto, Jakarta

City-owned developer PD Sarana Jaya revealed on Tuesday that three investors from Singapore, Malaysia and China had been looking into the possibility of investing in the project to transform the old Tanah Abang textile market into a modern business complex.

"The Malaysians and Singaporeans understood that investors would be obliged to build homes for locals, whose land would be taken for the project. They are also required to give residents shares in the project," the developer's president director Tebyan A'maari said at City Hall.

Tebyan said the investors claimed that a similar scheme had been integral to several projects in Singapore and Malaysia.

"However, the Chinese investors were slow to understand; in China, land is owned by the state," he added.

He refused to name the investors, arguing that they were still considering their participation in the project, which is estimated to cost up to Rp 6 trillion (US$666.7 million).

According to Tebyan, a total of 2,085 families, or around 60,000 people, would lose their homes and would be entitled to units in the 24-story apartment buildings that would stand in the center of the 12-hectare compound.

"In addition, they would also be allocated space on the lower- ground and first floors of the trade center, besides shares in the property," he said.

In its proposal, PD Sarana Jaya estimated that the land acquisition would cost around Rp 360 billion, with the estimated compensation given to land owners hovering at around Rp 3 million per square meter. The taxable value of the property (NJOP) in the area is around Rp 1.2 million per square meter. The market value is usually higher than the NJOP.

"We estimate that the construction will cost up to Rp 4.5 trillion and will be completed in 2008," Tebyan said.

The business complex -- stretching from the Tanah Abang textile market to the Tanah Abang railway station -- will comprise a wholesale market, trade center, office buildings, three-star hotels for traders, and low-cost apartments.

The design of the complex integrates business sites with the existing railway station, the planned monorail station and water transportation terminal.

Tanah Abang, the largest textile market in Southeast Asia, is notorious for its crowded, dirty and run-down condition, as well as its "omnipresent" thugs.

The project, which was first planned in 1998, was delayed due to strong opposition from locals.

Urban planning experts also said the project was not feasible as it would destroy businesses in the area, mostly small and medium enterprises.