US$1.5b earmarked for subway project

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)