Tug-of-war over MRT

The Jakarta Post , Jakarta | Sat, 04/01/2006 9:11 AM | Opinion

Reports that the Indonesian government has canceled plans to use Japanese loans for the construction of a mass rapid transit (MRT) system in the capital have raised eyebrows. This means the high-profile project, scheduled to start in 2007, will be delayed once again.

This latest holdup is the result of a conflict of interest between Japan and Indonesia. Japan insisted the loan must be tied, meaning there would be no international bidding on the project and Japan would have the final say on all aspects of the construction.

The government previously estimated it would cost US$767.66 million to build a subway running the 14.3 kilometers from Lebak Bulus in South Jakarta to downtown Kota. A total of $521.75 million was expected from foreign loans, with the remaining $245.91 million to come from local funding.

In the early stages of negotiations, Japan was committed to providing 70 percent of the total cost of the project, with the remaining 30 percent to come from the Jakarta administration, in cooperation with private companies.

Later, the Indonesian government proposed the construction should be funded 75 percent locally, in the hope that the project would not exclusively use Japanese technology, but would instead be able to absorb more local workers and materials, as expressed by State Minister for National Development Planning Paskah Suzetta.

As the adage says, ""There's no such thing as a free lunch,"" so the Japanese government turned down the Indonesian proposal.

The delay has apparently upset Jakarta Governor Sutiyoso, who says the central government is responsible for the holdup in the project.

Sutiyoso sees the subway as eventually playing a major role in the capital's overall Macro Transportation Pattern, which would provide hundreds of thousands of people with rapid transportation to and from work.

It is not clear what really transpired that made the Indonesian government make a new proposal on the percentage of local funding for the subway. If the use of local technology and materials was the point, then there must be some powerful interests behind the proposal.

Obviously, the government is obliged to ensure it chooses the best available technology and materials for the MRT, while also making sure it gets the best financial deal. But as with many other past examples, there is suspicion about whether the government's objections to the loan from Japan are based on objective economic reasons or because of a conflict of interest among those who are in power or those close to the project.

It is clear there has been a kind of tug-of-war going on between the Jakarta administration and the central government, which is now looking to state-owned companies to finance the subway. Jakartans, meanwhile, do not care who or what country finances the MRT. Their main concern is that they need a convenient, affordable and safe method of transportation that can get them from their homes to their offices and back.

Conflicting interests between Sutiyoso's administration and the central government have also spiced up the much-delayed monorail project in the capital.

PT Jakarta Monorail, a joint venture between PT Indonesia Transit Central (ITC) and Singapore's Omnico Group, began having troubles after ITC, to the displeasure of Omnico, signed a memorandum of understanding with an Indonesian consortium led by PT Bukaka Teknik Utama, which is partly owned by Vice President Jusuf Kalla, in cooperation with state-owned PT INKA and PT LEN, and PT Siemens Indonesia.

Business interests were likely behind the dispute over the $600 million project.

Like the monorail hubbub, it is not impossible the MRT project dispute was also triggered by conflicting business interests -- in the name of technology and nationalism -- among the big guns in the bureaucracy.

If this is the case, all the officials and businesspeople claiming to promote nationalism in both the monorail and MRT projects are acting like selfish troublemakers, who have failed to address the dire need for affordable and quick transportation.

Given the deplorable traffic situation in Jakarta, which just gets worse by the day, it is time for the central government and the Jakarta administration to -- again -- sit down together and do something fruitful for citizens. Individual interests, shows of force and selfishness should be set aside by officials when discussing public interests, which must be given top priority.

Jakarta, home to about 12 million people, is expected to serve as a model for other provinces and cities, but it cannot solve its problems alone. The central government must provide the necessary assistance to the capital in improving civil society, which includes a safe and humane ground transportation system.

For Governor Sutiyoso, his reputation is at stake. The monorail and MRT systems are a test for the governor and his ability to sell his megacity concept, which he hopes will not simply disappear when his term ends in 2007.

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