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Deputy Governor Ahok wary of Jakarta Monorail financial ability
The city administration has voiced doubt over the financial ability of PT Jakarta Monorail in carrying out the monorail project as no progress has been made since the groundbreaking ceremony in October 2013
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The city administration has voiced doubt over the financial ability of PT Jakarta Monorail in carrying out the monorail project as no progress has been made since the groundbreaking ceremony in October 2013.
Deputy Governor Basuki 'Ahok' Tjahaja Purnama said he was suspicious as the company had made no significant progress in the project, possibly because it was facing financial difficulties.
'We were suspicious of the company's financial ability early on but did not cancel the project to avoid being taken to court. In the absence of a clear vision and mission, the company, which secured the permit to develop the monorail ages ago, may have speculated that it would receive an injection from the city administration if it faced financial constraints in carrying out the project. But we will not fall into such a trap,' he said at City Hall on Monday.
Ahok said the city would revoke the construction permit if Jakarta Monorail failed to meet the deadline set by the Jakarta Development Planning Board (Bappeda).
The project, which began in 2004 but was suspended in 2007 because of financial constraints, is scheduled for completion in 2018
Separately, Jakarta Governor Joko 'Jokowi' Widodo revealed that he had yet to sign the contract of work between the city administration and PT Jakarta Monorail (JM) because the latter had not fulfilled three main requirements.
'The requirements include payment to state-owned PT Adhi Karya for existing pillars and the company's financial closing,' he said, adding that the city administration had no connection with the pillars.
According to Adhi Karya's consulting company, JM must pay Rp 193 billion (US$16.4 million) for the pillars, while according to the Development Finance Comptroller (BPKP), the pillars in Kuningan and Senayan are worth Rp 130 billion.
JM previously vowed that it would pay Rp 130 billion for the pillars in December.
Jokowi said he was optimistic about the project. 'I want to be optimistic about the project. They just have to meet the remaining requirements,' he said.
Former acting Bappeda head Sarwo 'Yani' Handayani said finalizing the corporation agreement took time.
'The new contract needs to be revised. We have a new provision that the project will no longer be guaranteed by the city administration,' she said.
Yani said JM had studied the document and had conveyed its response to the city administration. 'We will meet again to further discuss the agreement this week,' she said, adding that the regional secretary was currently studying the spatial plan of the stations and the depot.
The monorail will have two lines: a green line with 16 stations, extending 14.3 kilometers from the city police headquarters (Komdak) to the Satria Mandala Museum, both in South Jakarta; and a blue line stretching 13.7 km from Kampung Melayu in East Jakarta to Grogol in West Jakarta, with 14 stations.
Yani, who is the deputy governor for spatial planning, said the company had fulfilled 15 requirements of the governor, adding that it was time to execute the cooperation agreement.
She said the company was facing no financial difficulties while payment for the pillars would be made once the BPKP finished determining the price.
John Aryananda of PT Jakarta Monorail denied that his company was facing financial difficulties.
'The agreement has not been signed not because of financial issues, at least as of today,' he said.
John, also the managing partner of Singapore-based Ortus Holdings, which has the biggest stake in the venture, said his company had met all the requirements set by the government in November.
'One of the terms in the requirements is Ortus has assets of how many trillion and we have submitted the proof,' he said.
'We have secured $1.5 billion from the China Communications Construction Corporation Ltd. [CCCC] to fund the construction, transit-oriented development improvement and construction of the monorail assembly factory,' he said.
Regarding its obligation to Adhi Karya, John said both parties were waiting for the report from the BPKP.
'We agreed to pay Rp 130 billion for the pillars, but Adhi Karya rejected it. The company asked the BPKP to re-examine the price of the pillars,' he said.
John said the company was making minor preparations for the construction, including soil investigation, before the governor signed the cooperation agreement.
He said that although JM had expected to sign the agreement in December, the project was still on schedule.
