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November 2008

Jakarta Monorail warned for sluggish progress
Governor Sutiyoso chided PT Jakarta Monorail (JM) on Monday over its sluggish progress in the construction of two monorail lines in the capital, which are scheduled to be completed in the middle of 2007. (The Jakarta Post)

He said JM should immediately complete its financial closing by securing investors or face termination of its agreement with the city administration.

"PT Jakarta Monorail has promised that the financing of the two lines of the monorail construction would be concluded in September, but until now we have not received any report about the progress," Sutiyoso said on Monday.

"We have ordered the city secretary to send a 'love' (warning) letter to the company so that it can immediately complete the financial closing. Otherwise, we will find other companies to build the monorail in the city."

According to JM director Sukmawaty Syukur, the company was in the final stages of the financial closing. She added that JM would report the progress to the governor on Wednesday.

Sukmawaty said JM would carry out a shareholders meeting on Friday to try to end the internal rift between its supporting companies -- PT Indonesia Transit Central (ITC) and Omnico Singapore, Pte. Ltd.

ITC owns 55 percent of JM shares, while Omnico owns the remaining 45 percent.

According to her, several local and foreign financial institutions had expressed interest in financing the monorail project, but she added that further process could not be made as long as JM could not resolve its internal problems.

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, which was rejected by Omnico, which preferred to assign South Korea's Rotem.

ICMI is supported by Bukaka Group, whose shares are partly owned by the family of Vice President Jusuf Kalla, Madiun-based state rolling stock maker PT INKA and Bandung-based state electronics firm PT LEN Industry.

It is also supported by Hong Kong-based Mass Transit Railway Cooperation. The consortium submitted a proposal estimate of $496 million for the project.

Meanwhile, Rotem's Maglev technology would cost $540 million, excluding bank and consultants' fees, which the ITC claims would bring the total investment to $826 million.

Sukmawaty said Friday's meeting would, among others, decide whether Omnico would still stay with JM by increasing its shares to or leave JM to be replaced by another company.

JM and the administration had previously terminated a contract valued at $540 million for the same project with a Malaysian company, MTrans Holding Bhd, due to financing problems.

The monorail project was started in June last year and was projected to finish in 2007.

When up and running, the monorail will cater to transportation needs in the prime business areas 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: The Jakarta Post

Jakarta Monorail
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