The internal rift in monorail construction consortium PT Jakarta Monorail has (JM) been mended, easing the way for it to finalize financial backing for the project.

JM president director Ruslan Diwirjo told The Jakarta Post at the weekend that PT Indonesia Transit Central (ITC) now controlled 98 percent of the shares in the company, leaving partner Omnico Singapore, Pte. Ltd. with 2 percent from its initial 45 percent.

"With the new configuration of shares, we will sort out the financial details of the project as soon as possible," he said.

Ruslan said the new configuration of shares was decided in a shareholders' meeting on Dec. 9 attended by representatives of ITC and Omnico. The configuration, he said, had been approved on Dec. 20 by the Ministry of Justice and Human Rights.

Ruslan revealed Omnico lost its shares in JM because it did not provide more capital.

The rift between ITC and Omnico was sparked by the assignment of the Indonesia Consortium of Monorail Industries (ICMI) by ITC as a rolling stock supplier for the project. The move was rejected by Omnico, which preferred South Korea's Rotem.

The ITC was firm in its decision to pick the local consortium as it will employ cheaper wheels-on-rails technology at $496 million, instead of the magnetic levitation (Maglev) technology of Rotem, valued at $826 million.

Omnico has questioned the suitability of the technology offered by ICMI, which, according to the ITC, has its own funding companies.

The ICMI is led by PT Bukaka Trans System, whose shares are partly owned by the family of Vice President Jusuf Kalla. Also in the consortium are Madiun-based state rolling stock maker PT INKA and Bandung-based state electronics firm PT LEN Industry.

According to the JM's weekend press release, the company signed an agreement on Nov. 30 with local and foreign investors to finance the construction of two monorail lines, the first phase of which was originally scheduled to open in late 2007.

Ruslan refused to disclose the identities of the investors, saying names would be given upon the completion of the "financial closing", to be signed by the end of January.

The JM had agreed to sort out the financial details of the project before Jan. 31.

"Our investors would prefer their names not be published until we complete our financial closing," he added.

Ruslan said the JM had signed contracts with a number of companies including state-owned PT Adhi Karya for civil work, PT Bukaka Trans System for rolling stocks, MTRC Hong Kong for project management and services integration and Mac Donald for Independent engineers.

When up and running, the monorail will serve the business districts of the city through a 14.3-kilometer line as well as a 13.5-kilometer line from Kampung Melayu in East Jakarta to Taman Anggrek Mall in West Jakarta.

Source: Jakarta Post