US$1.5b earmarked for subway project

JAKARTA (JP): City Governor Sutiyoso said on Friday that a fund of 200 billion Japanese yen (US$1.5 billion) in central government's coffers was available for the construction of the Fatmawati-Kota subway project.

"The 200 billion yen was part of a 600 billion yen loan that has not been used (by the central government). We could use the 200 billion loan for the subway project," Sutiyoso told reporters at City Hall.

He did not say when the 600 billion yen loan disbursement had been made but it was understood that the Japanese government provided Indonesia with the so-termed Japanese yen packet loan to help it overcome its economic crisis.

The governor's statement came one day after Deputy Governor Budihardjo Sukmadi revealed that central government had given the city administration the green light to proceed with the long- delayed project. A memorandum of understanding for the project was signed in 1995.

Sutiyoso said city administrators hoped the central government would allocate the 200 billion yen for the construction of the 15-kilometer subway stretching from the Fatmawati area in South Jakarta to the downtown Kota area in West Jakarta.

The city administration, he said, would prepare a subsidy scheme to pay back the loan.

"With the subsidy, train tickets sales and rent from shops in the subway's stations, I think we could repay the loan," Sutiyoso said.

With the establishment of the new government, he said, he was sure the economic situation in the future would improve.

Sutiyoso said the administration would soon give a presentation to the Ministry of Communications and the Ministry of Finance about the feasibility of the project.

Afterwards, the administration would explain the project to the city council.

On Wednesday, Sutiyoso met executives of Japan's Itochu Corporation.

Itochu led a 1995 Japanese consortium when a memorandum of understanding about the project was signed. The project was postponed in 1997 due to the prolonged economic crisis.

Deputy governor Budihardjo Sukmadi, who accompanied Sutiyoso during the meeting, said the city could fully bear the loan, which had a grace period of 10 years and maturity of 40 years, with installments of Rp 300 billion a year.

Budihardjo hoped the construction of the project could be started next year, saying that its basic design has long been completed by the Itochu Corporation.(jun/hbk)