Jakarta Governor Joko “Jokowi” Widodo has said that he would proceed with the plan to build the mass rapid transit (MRT) system, but only if the central government is willing to pay more for the project.
The governor said he would negotiate with the central government in the hope that it would pay a bigger portion of the US$1.5 billion loan from the Japan International Cooperation Agency (JICA) and provide subsidies to help cover the MRT’s operational costs. “I will meet the minister on Tuesday,” Jokowi said on Sunday.
The city administration expected the government to pay 70 percent of the loan so that the city would only have to pay the remaining 30 percent. Based on the current repayment scheme, the government should pay 42 percent of the loan, while the city administration has to pay the remaining 58 percent.
“The government should pay the bigger share, so it will not burden the city’s coffers too much,” he said.
The cost of the MRT project is estimated to top ¥144 billion ($1.8 billion) and will be mostly covered by a ¥120 billion soft loan from JICA. The project’s current price tag is Rp 1 trillion ($104.2 million) per kilometer.
PT MRT president director Tribudi previously said that the loan was tied to the Special Terms for Economic Partnership (STEP) with a loan tenure of 40 years, a grace period of 10 years and an interest rate of 0.2 percent per year.
The administration also wants the government to contribute to subsidizing the MRT’s operational costs so that the ticket price for each passenger, which is estimated to be around Rp 38,000, could be reduced to between Rp 9,000 and Rp 10,000, the price level that people are said to be willing to pay.
The governor said he would make a firm decision before the year ended and added that he was aware of the consequences of his position.
Though Jokowi has not met with Finance Minister Agus Martowardojo, he was quoted by Antara news agency saying that the government did not have the money to grant Jokowi’s wishes. “There is no subsidy for public transportation, but we will support it through grants,” Agus said.
He added that the government would show support through its efforts in, among others, gasoline-to-gas conversion programs and other renewable energies. He added that the administration should use its own budget to cover the subsidy for public transportation.
“Otherwise, other city administrations will not see that public transportation is their responsibility,” Agus said.
Last week, Jokowi was due to give his final word on the future of the project during a meeting with PT MRT Jakarta officials. He failed to do so because he remained unconvinced.