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JM told to settle debt before reviving monorail project

After failing to bring PT Jakarta Monorail (JM) and state-owned construction firm PT Adhi Karya together in his bid to revive the monorail project, Governor Joko “Jokowi” Widodo is asking JM to settle its debt before moving forward as the lead developer of the project

Andreas D. Arditya (The Jakarta Post)
Jakarta
Thu, January 10, 2013

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JM told to settle debt before reviving monorail project

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fter failing to bring PT Jakarta Monorail (JM) and state-owned construction firm PT Adhi Karya together in his bid to revive the monorail project, Governor Joko “Jokowi” Widodo is asking JM to settle its debt before moving forward as the lead developer of the project.

Jokowi asked JM to settle the debt it had incurred while cooperating with Adhi Karya on the previous unsuccessful monorail project, including paying the construction firm for the concrete columns it had built prior to the project’s failure.

Adhi Karya used to hold a 7.5 percent stake in the JM consortium. The monorail project began in 2004 but was halted four years as the consortium experienced legal and financial problems.

The initial construction left rows of support pillars along the roads in Senayan, Central Jakarta, and Kuningan in South Jakarta, which were part of the planned first line of a 14.3-kilometer route connecting Kuningan and Semanggi in Central Jakarta.

“The columns belong to Adhi Karya. I am ordering JM to pay to Adhi Karya for them, so the project can continue on a clean slate,” Jokowi told reporters at City Hall.

The JM consortium had demanded Rp 600 billion (US$62.3 million) in compensation — including to cover the concrete columns’ construction — from the city administration for the failed monorail project.

Former governor Fauzi Bowo’s administration had refused to pay the consortium, arguing that the Development Finance Comptroller (BPKP) only recommended the administration to pay a maximum Rp 204 billion.

Separately, JM spokesperson Bovananto said the consortium was ready to pay its debt to Adhi Karya. The spokesperson said that according to the BPKP’s calculation, JM had to pay Rp 120 billion to Adhi Karya for the columns.

“However, we will ask Adhi Karya to lower the number,” Bovananto said. The JM spokesperson said the firm would conduct another audit to determine its counteroffer.

Earlier, Adhi Karya withdrew its bid to take part in the monorail’s revival, leaving JM as the sole bidder just a month after the governor asked both companies to work together to speed up the project.

Adhi Karya declined to team up with JM because it had formed a new consortium with other state-owned companies while JM had partnered with other private companies.

Jokowi lamented the decision, saying JM had a big opportunity to continue the project. “If we have to select a new consortium, the process will be more complicated. We are afraid that the project won’t be completed on time,” he said.

The governor said he was assured that JM would not withdraw because the company had secured solid funding.

Jokowi also said that Adhi Karya would submit a proposal for the monorail project in the other side of the city.

Adhi Karya has offered to build two initial monorail lines, one connecting East Bekasi in West Java to Cawang in East Jakarta, and the other connecting Cibubur to Cawang, both in East Jakarta, via a total of 90.65 kilometers of track.

The state-owned construction company is collaborating with state toll road operator PT Jasa Marga, state electricity firm PT PLN, state-owned Bank Mandiri, state train builder PT Inka, electronic components maker PT LEN Industry and state-owned telecommunications firm PT Telkom.

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