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SMI, banks to join LRT financing bandwagon
State Owned banks and an infrastructure financing firm are gearing up to provide financing for the capital’s light rail transit (LRT) project amid a lack of state funds
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tate Owned banks and an infrastructure financing firm are gearing up to provide financing for the capital’s light rail transit (LRT) project amid a lack of state funds.
State-Owned Enterprises Minister Rini Soemarno recently said the ministry had talked with PT Sarana Multi Infrastruktur (SMI) about the funding issue.
“So [SMI], along with state lenders, will fund the LRT,” she said, adding that the funding requirement would be divided equally between SMI and the banks.
The state lenders will comprise Bank Mandiri, Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI).
SMI and the three banks will be responsible for providing Rp 18.5 trillion (US$1.38 billion) in loans — equal to around two-thirds of the total Rp 27.5 trillion funding needed — to state railway operator PT Kereta Api Indonesia (KAI) for the project.
KAI was recently assigned as the project’s investor, while state construction firm PT Adhi Karya has been appointed to carry out the construction work.
The government is planning to seek approval from the House of Representatives to inject additional state capital worth Rp 5.6 trillion to KAI to partially cover the remaining Rp 9 trillion needed.
The rest of the funding will be calculated from an earlier Rp 2 trillion in state capital to the railway firm in 2015 and Rp 1.4 trillion in state capital to Adhi Karya in 2016.
As previously reported, the LRT construction has been divided into two phases.
The first phase will see the construction of 43.3 kilometers of track from Cibubur-Cawang, Bekasi Timur-Cawang and Cawang-Dukuh Atas to connect Bogor in West Java with Jakarta.
The first phase is slated to being operations in 2019.
Meanwhile, under the second phase, a 38.5-kilometer track will be constructed from Cibubur-Bogor, Dukuh Atas-Palmerah-Senayan to Palmerah-Grogol.
BNI president director Achmad Baiquni said the lender was ready to allocate up to Rp 6 trillion for the expected syndicated loan between the three banks, and possibly with SMI as well.
“We usually just divide it evenly. We can also offer the funding scheme to [province-owned] Bank Pembangunan DKI because the construction is occurring here [in Jakarta],” he said.
Government officials and KAI executives said they were still waiting for the issuance of a revised presidential regulation on the LRT, which officially named KAI as the project’s investor.
“We already have the [revision] format, it’s just a matter of wording,” Transportation Minister Budi Karya Sumadi said recently.
KAI president director Edi Sukmoro declined to comment, saying he would wait until the revision was issued.
Work on the revision was initially scheduled for completion last week.
