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Jakarta Post

New revenue formula?

  • Editorial Board

    The Jakarta Post

Jakarta   /   Sat, February 15, 2020   /   08:59 am
New revenue formula? The atmosphere of the National Monument area, Jakarta on Tuesday, February 11. 2020. The provincial government of DKI Jakarta plans to hold a Jakarta Formula E race in the National Monument area on June 6. 2020. (JP/Wendra Ajistyatama )

The Jakarta administration has discovered a new formula to boost tourism in the city and hence increase regional revenues. For five years running, starting this year, Jakarta will play host to one stop of the 13-leg world electric car championship series, or Formula E, an alternative to the more prestigious and lucrative Formula One.

Preparations have been under way since Governor Anies Baswedan announced last September the world auto racing body’s (FIA) decision to award the capital the right to organize the all-electric car street race. However, Jakarta has had to steer quite a few twists and turns in its race to the finish line of staging the first-ever Formula E race in the country on June 6.

The Jakarta e-Prix has been fraught with controversy over the race venue in the vicinity of the National Monument (Monas), an area dedicated to cultural-heritage preservation. Jakarta administration secretary Saefullah said on Tuesday the organizing committee had obtained approval from the State Secretariat to use the entire Medan Merdeka area as the race track. The 2.6 kilometer circuit will run from Jl. Silang Merdeka Barat Daya to Jl. Medan Merdeka Selatan and from Jl. Silang Monas Tenggara to Jl. Tugu Monas.

Previously, the central government had objected to the proposed track, citing concerns over the adverse impact of the race on cultural assets. Apart from the iconic Monas, the cultural heritage and strategic sites around the gold flame-topped obelisk are the State Palace, Merdeka Palace, City Hall, the Defense Ministry, the Army’s Strategic Reserves Command headquarters, the Pertamina building and Immanuel Church, according to Gubernatorial Decree No. 475/1993.

Further, on Thursday, the head of the Jakarta Cultural Heritage expert team Mundardjito denied Anies’ claim that the team had endorsed the proposed circuit. Mundardjito furthermore said that he had never been involved in the decision-making.

To make matters worse, the controversy has transformed into a political struggle as evident in the visit of City Council Speaker Edi Prasetio of the Indonesian Democratic Party of Struggle (PDI-P), an adversary of Anies, to the State Secretariat just after the central government gave the nod to the race track. Political controversy looms around the bend for the Formula E, especially after Anies’ controversial Monas revitalization project, which included the removal of hundreds of trees from the monument’s grounds.

The protracted political rivalry aside, Jakarta seems to be ill-prepared for the race. The polemic over the race track only shows the Jakarta government did not involve as many stakeholders as possible in the decision making. As an old saying goes, two heads are better than one.

But more importantly, the city administration has not come up with mitigation measures should the event not pay off. Such a risk should have been anticipated as the electric-powered racing series has never booked a profit since the first race in 2014. Last year, its pretax loss reportedly widened by 26.7 percent to 22.6 million pounds (US$29.47 million), giving it combined losses of 142.2 million pounds.

Mitigation matters because taxpayers will fully cover the June race, which will cost Rp 1.6 trillion ($116.86 million), almost 2 percent of the city budget for 2020.