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Jakarta Post

Building of Sunda Strait Bridge to be left to next administration

  • Nadya Natahadibrata

    The Jakarta Post

Jakarta   /   Thu, February 27, 2014   /  11:57 am

The government has decided that construction of the Sunda Strait Bridge connecting Java and Sumatra will be left to the next administration and that no state money will be spent on the mega project.

Coordinating Economic Minister Hatta Rajasa said on Wednesday that a coordinating meeting attended by the National Development Agency, Public Works Ministry and Transportation Ministry had agreed that state-owned construction companies would take part in the construction along with PT Graha Banten Lampung Sejahtera, a consortium led by tycoon Tomy Winata, the initiator of the project.

'€œNo state money will be spent on the construction. We will let state-owned enterprises [taking part in the construction] and the initiator discuss [the financing],'€ Hatta said.

Separately, the National Development Agency'€™s deputy for infrastructure Dedy S. Priatna said that before handing over the project to the next administration, the current administration of President Susilo Bambang Yudhoyono would outline the construction mechanism, including its legal basis and financing.

Dedy said he was confident the next administration, due to assume office in October, would continue the project as several investors had invested funds totaling Rp 1.5 trillion (US$129 million) in the project'€™s feasibility study.

Public Works Minister Djoko Kirmanto meanwhile said that the government would set up an agency tasked with ensuring continuation of the project. The agency, under the supervision of the coordinating economic minister, will facilitate both the state-owned enterprises and Graha Banten.

Djoko said that the agency would not deal with technical problems, but rather bring together prospective investors.

'€œThe Sunda Strait Bridge project must go on as it is part of the MP3EI,'€ Djoko said, referring to the master plan for the acceleration and expansion of Indonesian economic development. '€œThe agency will bring together the initiator and the state-owned enterprises, so they can further calculate the project investment,'€ he continued.

As the project would begin under the next administration, the current Cabinet would carefully prepare the cooperation foundation between the initiator and state-owned enterprises, he said.

Yudhoyono signed a presidential decree on the construction of the bridge in December 2011. Under the decree, Graha Banten was given the right to bid 10 percent higher than the lowest bid received for the project, if no state money was required.

Former finance minister Agus Martowardojo, who is now Bank Indonesia governor, however, wanted the government to have a role in financing the bridge to ensure good governance in the project while Hatta wanted the bridge to be fully financed by private parties. Construction of the bridge has long been delayed due to this difference of opinion between Hatta and Agus.

Another major infrastructure project that is currently on hold is the Trans Sumatra highway, as state-run construction company Hutama Karya, appointed to carry out the project, is still awaiting the necessary presidential decree.

Djoko said that the government should also financially support the project even though it would be carried out by a state-owned enterprise. However, the government did not allocate funding for the highway project in the 2014 state budget.

Dedy said that the Public Works Ministry was tasked with revising the draft presidential decree in order to ensure that the project would be carried out transparently, adding that the funding to construct the toll road would be allocated in the 2014 revised state budget if the decree was issued before the end of March this year.