LRT to Welcome Private Funding

Indonesia 22 Jan 2015
LRT to Welcome Private Funding

Jakarta Governor Basuki Tjahaja Purnama plans to proceed with the light rail transit system

Jakarta is expediting plans for the construction of Indonesia’s first light rail transit system despite an earlier rejection by the City Council.

Jakarta Governor Basuki Tjahaja Purnama confirmed that because the council had vetoed against using funds from the capital’s 2015 budget for the LRT project, the city administration had been looking for alternative sources of funding.

The council will only allocate Rp 1 billion ($ 79,400) for the government to conduct a feasibility study before deciding whether the capital should move forward with the rail system, instead of earmarking Rp 20 trillion as originally proposed.

In response, Basuki said he planned to offer the project to private investors, including property owners and developers. Should the governor succeed in raising funds and proceeding with construction,  these investors will see the price of their respective properties skyrocket.

The Jakarta administration appointed two city-owned contractors, Pembangunan Jaya and Jaya Konstruksi, to conduct the necessary studies for the project.

The two companies have already submitted the plans for seven LRT lines, Basuki said.

Among these is a 21.6-kilometer line connecting Kebayoran Lama in South Jakarta to Kelapa Gading in North Jakarta;

a 17.6-km line from Tanah Abang, Central Jakarta, to Pulo Mas, East Jakarta; and an 11-km route from Joglo, West Jakarta, to Tanah Abang.

The contractors also proposed a line that would connect the city center to Soekarno-Hatta airport.

It is unclear, however, which route the city will focus on first and when construction is set to begin, if at all.

The decision to build the LRT came after the city considered shutting down the troubled monorail project, which had been in limbo for years.

The previous administration had already erected hundreds of columns for the rail line, which now lay idle.

Despite efforts from the government to revive the plan, Basuki said that Jakarta Monorail, the consortium of companies in charge of building the elevated transport system, had made no moves to continue with the construction.

State firm Adhi Karya has expressed interest in taking over the project, but is proposing two new lines instead of utilizing the existing columns.

The governor met with officials from Adhi Karya on Tuesday.

The state-owned developer has proposed connecting South Jakarta’s Kuningan area to the district of Bekasi; and the eastern suburbs of the capital to Cawang in the southeast. In return, Adhi Karya asked to be given the necessary land.

Not wanting to repeat the same mistakes the city made with the Jakarta Monorail consortium, Basuki provided the company with two terms.

“First, if the project — for any reason — stops, any completed structure will be ours. Whether we seize them, dismantle them or repurpose them will be completely up to us,” the governor said.

“Second, if the project is completed and  after some time [Adhi Karya] decides to abandon the business — because, for example, they don’t make as much money as they thought they would — then the city will take over. But we will not compensate the company for anything.

Jakarta Post.

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