T

he city administration is offering private entities the chance to get involved in the second phase of the mass rapid transit (MRT) project.

The second MRT line will connect the Hotel Indonesia traffic circle in Central Jakarta to Kampung Bandan in North Jakarta.

President director of city-owned PT MRT Jakarta, the company handling the first phase, Dono Boestami said on Thursday that his company and the administration were open to any interested parties.

'€œI have received some offers, especially from foreign banks, to fund the MRT. We are still discussing the possibilities,'€ he said on the sidelines of a discussion on formulating infrastructure development in Jakarta.

Dono said that the decision by the administration to reach out to other investors had nothing to do the project'€™s cost of around US$1.5 billion.

'€œI think the city can fund the project by itself as it only costs Rp 3 trillion [US$250 million] per year. However, it is better if the budget is used for other programs like education and heath,'€ he said.

This year the city budget was Rp 72 trillion.

Public-Private partnerships (PPP) have advantages and weakness, Dono explained. '€œPPP is the best practice for infrastructure development in many countries, however, different understandings of the program by stakeholders can be a problem,'€ he said.

The president director said his company would start feasibility studies in the near future.

'€œWe will conduct a bidding process for consultants next year,'€ he said, adding that the consultant fee would be around Rp 150 billion and it was funded by the Japan International Cooperation Agency (JICA).

According to Dono, the second phase of the MRT line will extend 8.1 kilometers and have eight stations and one depot.

Private firms interested in the project, Dono said, had been informed that the process would take years.

'€œIt takes at least two to five years to conduct the feasibility study, financial closing and tender processes. Add to that, another five to 10 years for construction preparation, which includes utility relocation and traffic engineering,'€ he said.

Dono said it would take around 15 to 30 years to see a return on investment.

Acting governor Basuki '€œAhok'€ Tjahaja Purnama said the PPP project would speed up the project'€™s execution.

Ahok said the city welcomed cooperation: '€œOur principle is that it is better if the development does not have to use our money'€.

Assistant to the governor for economic and administrative affairs, Hasan Basri Saleh, said the city needed around Rp 450 trillion to ensure sufficient infrastructure.

'€œIt is impossible to completely fund this ourselves. So we need private entities to chip in,'€ he said.