Council passes MRT bylaws after month of talks

Mustaqim Adamrah ,  The Jakarta Post ,  Jakarta   |  Wed, 06/11/2008 10:37 AM  |  City

The City Council on Tuesday approved two ordinances that will become the legal basis for the development of the city's Mass Rapid Transit (MRT) system.

Following month-long deliberations, the council's seven main parties agreed in a plenary session on the establishment of PT MRT Jakarta -- a city-owned company -- and the city's investment in it.

The ordinances were initially scheduled for approval in early May but were delayed because of opposition from the Prosperous Justice Party, the United Development Party and the National Mandate Party.

The parties had claimed they did not fully understand the administration's explanation of the project's technical aspects, and requested clarifications.

The first of the two ordinances states MRT Jakarta will be responsible for the construction, operation and maintenance of the MRT, as well as providing high quality service, and will be eligible for subsidies provided in the city budget. It will have shareholders, commissioners and a board of directors.

The ordinance also stipulates MRT Jakarta will receive Rp 200 billion (US$21.41 million) in basic capital, with Rp 198 billion from the city administration and the remaining Rp 2 billion from PD Pasar Jaya. The latter is the city-owned operator of traditional markets, and also a future partner of MRT Jakarta.

Of this money, Rp 50 billion will be working capital, with Rp 49.5 billion provided by the administration and Rp 500 million by Pasar Jaya.

The working capital will be allocated in the revised 2008 budget, the second ordinance stipulates.

Governor Fauzi Bowo said the administration was determined to see the project through to completion.

"City Secretary Muhayat already has a concept for the company's establishment," he said at City Hall after the plenary session.

He said the company would be managed by an acting commissioner and director until "the second phase of the loan agreement" was secured, at which time the company would then begin recruiting permanent employees.

The US$800 million project is part of a joint effort by the administration and the government to address Jakarta's abysmal traffic conditions. About 85 percent of the funding (Rp 8.3 trillion) will come from loans from the Japan Bank for International Cooperation (JBIC).

The government will pay for 42 percent of the loans at an annual interest rate of 0.4 percent. The administration will cover the remainder.

The project's first phase, estimated to cost Rp 200 billion, consists of feasibility studies, the establishment of MRT Jakarta and the construction of a 14.3 kilometer line from Lebak Bulus in South Jakarta to Dukuh Atas in Central Jakarta.

The MRT is expected to be in operation by 2015.

The second phase of development will be the construction of a line from Dukuh Atas to Kota in West Jakarta.

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