VP agrees on capital's costly subway project

VP agrees on capital's costly subway project

JAKARTA (JP): Vice President Megawati Soekarnoputri has given
her approval to the city's US$1.5 billion Fatmawati-Kota subway
project, a city official said on Wednesday.

City administration Spokesman Muhayat said the vice
president's approval was obtained during a visit of Governor
Sutiyoso to Megawati's residence in the Kebagusan subdistrict,
South Jakarta, on Tuesday evening.

"Vice President Megawati agreed on the need to have a subway
system in the city.

"She promised Governor Sutiyoso that she would bring the
proposal to the next government-to-government talks with the
Japanese government," Muhayat said at City Hall on Wednesday.

He said the project was badly needed by the city to overcome
problems of traffic congestion, which could not be settled only
through the construction of flyovers and the city's Jabotabek
trains.

Muhayat said the traffic jams had caused the city to suffer
losses of US$900 million every year while gasoline consumption
had significantly increased over the past 10 years.

Head of the city office of the Ministry of Transportation,
Iskandar Abubakar, said separately on Wednesday that the
construction of the prestigious Fatmawati-Kota subway project
would likely start in 2001 after being postponed due to the
prolonged economic crisis.

He said the project was expected to be financed by a special
yen loan, with a 7.5 percent annual interest rate, from the
Japanese government.

"Japanese and German consortia are interested in taking part
in the project. We are sure that many local firms would also be
interested," Iskandar said during a break in a seminar on the
City's Mass Rapid Transit (MRT) held by the Indonesian
Transportation Society (MTI) at Hotel Aryaduta in Central
Jakarta.

He said the project was expected to start in 2001 since its
original design -- although in need small adjustments -- had been
completed in 1996.

He said the Japanese government had shown a commitment to give
the loan which has a maturity period of 40 years, including a
grace period of 10 years.

The first-phase construction of the 15-kilometer project would
begin from Fatmawati in South Jakarta to the National Monument
(Monas) park in Central Jakarta, with 13 stations before it
continued to downtown Kota in West Jakarta, he said.

Present at the seminar were Deputy Governor Budihardjo
Sukmadi, head of the City Development Planning Agency Bambang
Sungkono and city councillors.

Most of the seminar participants supported the proposal and
urged the central government to make the MRT project a national
priority.

"The central government should be involved in the MRT
project," MTI chairman Suyono Dikun said, while citing examples
of other countries which have developed similar subway systems.

Suyono suggested the infrastructure of the project should be
financed by the government, while the operational costs by
private investors.

An executive of the National Development Planning Board
(Bappenas) Ali Imron said former president B.J. Habibie had
agreed to continue the project and had asked the Japanese
government to disburse the loan.

"But the World Bank later sent a letter signed by its country
director Dennis de Tray, expressing their disagreement and asked
the Indonesian government to review the project," Imron said.

The memorandum of understanding (MOU) of the project was
signed in 1995 between the central government, the city
administration and an Indonesian-Japanese-European consortium.

The consortium includes Japanese companies led by the Itochu
Corp., European firms led by Ferrostaal AG of Germany and
Indonesian firms led by PT Citra Lamtorogung, PT Bukaka Teknik
Utama, PT Bakrie Investindo, PT Pembangunan Jaya, PT Lippo, PT
Suhamthabie and PT Steady Safe. (jun)