ASEAN KEY DESTINATIONS
Jakarta finally goes ahead with MRT plan
In his speech during a plenary meeting at the City Council yesterday, Jakarta Governor Joko “Jokowi” Widodo listed the MRT project as one of his administration’s priority programmes for 2013. The governor submitted the 2013 budget draft during the plenary session.
“The MRT construction will include land procurement, road widening and construction of the MRT by PT MRT Jakarta,” Jokowi said.
The governor said that next year’s work on the MRT would be funded by a grant totalling 3.8 trillion rupiah (US$393.6 million) from the central government. “We will coordinate [with the central government] on the disbursement of the MRT funds,” he said.
Over the past few weeks, Jokowi’s comments appeared to leave the project in limbo, as he voiced doubts as to whether the project was feasible enough to proceed.
Jokowi’s predecessor, Fauzi Bowo, scheduled the MRT project to start before the end of the year, after years of studies and discussions involving transportation experts and officials from both the city administration and the central government.
The massive project is believed to be crucial in addressing the city’s traffic problems, with the MRT poised to serve as a backbone of urban development after it begins operations in 2016.
The cost for the first phase of the 15.7-kilometre-long MRT system has been estimated at 144 billion yen ($1.71 billion), which is to be funded in part by a 120-billion yen soft loan from the Japan International Cooperation Agency.
Jokowi demanded a change in the contract, pushing the central government to repay a larger portion of the loan and to provide subsidies to cover the MRT’s operations. He wants the central government to cover 70 per cent of loan payments, up from 42 per cent under the present arrangement.
Responding to his demand, the Finance Ministry has said that the governor’s proposal to change the structure of loan payments would be considered.
Jokowi is planning to meet Coordinating Economic Minister Hatta Rajasa to discuss the MRT system in the coming days.
Earlier this week, Hatta promised that he would meet with Jokowi to discuss the ideal cost-sharing structure to avoid burdening the Jakarta administration and its citizens.
“We will look for the best solution,” the minister said as quoted by kompas.com.
The MRT’s first phase — a 15.5-kilometre-long route connecting Lebak Bulus in South Jakarta and the Hotel Indonesia traffic circle in Central Jakarta — is planned to serve around 173,420 passengers per day in its first year, rising to 233,035 passengers per day by its 10th year of operations.
Ticket prices are estimated to be between 10,000 and 15,000 rupiah, leaving the administration to provide a hefty subsidy to close the gap with the actual ticket price — estimated to be around 38,000 rupiah. Jokowi wants the ticket price to be less than 10,000 rupiah.
The governor also wants to renegotiate clauses in existing contracts that hold the city administration fully responsible for any mishaps affecting the project.
Jokowi said that city-owned enterprise PT MRT Jakarta, which was established to implement the project, should be accountable for building the MRT system.
The central government has insisted that all the analyses and agreements for the project had been completed and that the decision to take a loan from JICA was made based upon the consideration of the Office of the Coordinating Economic Minister, the National Development Planning Board (Bappenas) and the Transportation and Finance Ministries.
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