Govt offered stake in Sunda Bridge initiator
Paper Edition | Page: 14
The initiator of the Sunda Strait Bridge project, PT Graha Banten Lampung Sejahtera (GBLS), has offered the central government the opportunity to acquire a majority stake in the company in a bid to secure the smooth execution of the plan to connect Sumatra and Java.
In a copy of a letter sent by the company to Coordinating Economic Minister Hatta Rajasa, GBLS president director Agung Prabowo said the shares of existing owners could be “reduced to the lowest possible level”.
GBLS is a business consortium controlled directly by Tommy Winata’s Artha Graha Network and the provincial governments of Banten and Lampung.
In exchange, the company is asking the government not to revise Presidential Regulation No. 86/2011, which serves as the legal basis for the construction of the Sunda Strait Bridge project.
“We, as the project initiator, will not demand anything that burdens the government over the cost so long as the government upholds the authority of the presidential institution and the administration by complying fully with the mandate of the presidential regulation,” Agung said.
A revision to the presidential regulation is sought by Finance Minister Agus Martowardojo, who objected to several provisions such as the special right given to the project initiator to match offers made by project bidders and the right of the project developer to manage two economic zones that will be established at each end of the bridge, one in Banten and the other in Lampung.
The minister also requested the right to conduct the feasibility study be handed over from the initiator to the state, under the supervision of the Public Works Ministry.
Agus argued that the current stipulations of the presidential regulation could pose a serious risk to state finances, as the central government is required to give a blanket guarantee should the project be deemed unfit after the feasibility study.
The study is estimated to cost between Rp 2 trillion (US$212 million) and Rp 3 trillion. The construction itself, which will include a 26-kilometer long bridge with six lanes and a double-track railway, is estimated to cost between $10 billion and $20 billion.
Proponents of the presidential regulations included many economic ministers in the President’s Cabinet, in particular Hatta, who argued that the separation of the bridge construction and the right to manage the economic zones would render the project unattractive to investors.
To analyze Agus’ proposal, Hatta established a team consisting of seven ministers, including the finance minister, to determine whether the revision on the regulation was needed or not.
Agus said he could not yet comment on the letter sent by the project initiator because the team still needed more discussion to settle the debate over the regulation.
Hatta acknowledged that he had received the letter and would like to study it and receive final recommendations on Agus’ proposal from the team before commenting.
A high level official at the Public Works Ministry, who requested anonymity, told The Jakarta Post that a draft for the revision of the presidential regulation had been completed, involving only “minor changes”.