Banks urge city funding for monorail

Adisti Sukma Sawitri, The Jakarta Post, Jakarta

A consortium of local banks wants Jakarta administration to acquire majority ownership of PT Jakarta Monorail to ensure investment in the on-off monorail project.

PT Bank Negara Indonesia (BNI) president director Sigit Pramono said Monday the banks had made the request during discussions with the administration and Jakarta Monorail.

Sigit said a greater role by the administration would reduce the risks banks might face in the future.

"As a part of the public sector, public transportation projects are never profitable without subsidies or support from the central and local governments in any country," he told The Jakarta Post.

The banks and the administration engaged in a series of negotiations to settle financial schemes for the city's monorail projects after Jakarta Monorail, as the operator and constructor of the project, failed to attract foreign investors last year.

BNI, PT Bank Rakyat Indonesia (BRI) and PT Bank Mandiri (Bank Mandiri) are among the local banks that intend to finance the project.

After being entangled in almost a year of negotiations, it has been agreed the banks would provide a US$345 million loan for the project while an additional $144 million would come from Jakarta Monorail's internal equity.

The administration and the City Council have agreed to provide 10 percent of the equity by disbursing $14.4 million.

PT Adhi Karya, an existing stakeholder, has also been asked to increase its ownership from 7 percent to more than 20 percent under a new financing scheme, despite the fact the state-owned construction company also holds a 24-percent share in PT Indonesia Transit Central (ITC).

ITC is the existing main stakeholder which controls 91 percent of Jakarta Monorail's total shares, while PT Omnico Singapore Pty Ltd holds the remaining two-percent share in the company.

Governor Fauzi Bowo said the administration planned to invest in the company, but added the company's mounting debts were a major concern.

"I never said the administration would not take over (the shares of the company), but this kind of decision would be easier if the company was not overburdened with debt," he said at City Hall in Central Jakarta.

ITC president director Sukmawaty Sjukur denied the consortium had ever been in debt.

The monorail project, which is to comprise two separate monorail lines, is part of the city's planned integrated transportation system aimed at overcoming the perennial traffic chaos in the capital.

The monorail's green line will run through South Jakarta's Kuningan business district, along Jl. Sudirman to Tanah Abang in Central Jakarta. The blue line will link Kampung Melayu in East Jakarta with Roxy in West Jakarta.(tif)