T

he City Council has signalled it will give the Jakarta administration the go-ahead to sign an agreement with the government for US$450 million for the construction of the Mass Rapid Transit (MRT) project.

Syamsidar Siregar, from the council's Commission A on governance, said the council would scrutinize the agreement before making a formal decision.

"We basically agree with the project, but we should be careful about receiving the loan. We want to know the details," she told The Jakarta Post on Thursday.

"We want to know whether the loan might affect the city budget or not."

She added councilors were afraid the government would renege on its responsibility to pay back the loan, thus putting the burden on the city administration instead.

"We have learned from the past. There have been cases like that, and so we demand transparency on this project," she said.

"We just want to make sure *the agreement* does not affect the city budget," said Syamsidar, adding the council would announce its decision this month.

The development of the MRT in the capital will be funded by a four-loan package worth a total of 118 billion yen ($1.1 billion) from the Japanese government.

The city administration will sign an agreement with the government to receive $450 million, which will be the second package in the loan deal.

Some 4 billion yen of the 48.15 billion yen fund will be used to hire consultants, while the remainder will go toward construction, which is targeted to start in 2011.

PT MRT Jakarta (MRTJ) corporate director Eddi Santosa said construction work was initially scheduled to start in the fourth quarter of 2010.

"We hope to sign the $450 million loan agreement with the government by the end of March. But we first need the city council's approval to sign the agreement," he said.

"The Transportation Ministry is working on the basic design, which will take about 12 months to complete.

"Soon after the basic design is ready, we will hold a bidding process, which will take another five to six months."

The 14.5-kilometer MRT route - linking Lebak Bulus in South Jakarta to Dukuh Atas in Central Jakarta - is targeted to be completed within five years after the start of construction.

The route will start at Lebak Bulus, pass through Jl. Fatmawati, Jl. Cipete Raya, Jl. Haji Nawi, Blok M, Jl. Sisingamangaraja, Senayan, Istora and Bendungan Hilir, and end at Setiabudi.

Some 4 hectares of land will have to be acquired for the depot in Lebak Bulus.

The administration has already allocated Rp 40 billion from its 2009 budget to acquire the land this year and to start construction work on the depot.