It's just ten days away for Indonesia government to decide, whether to accept Japan's offer to finance the long-awaited mass rapid transportation system (MRT) to be built in super-crowded Jakarta. March 31 is the deadline as Japan will start the new fiscal year.
Japan Bank for International Cooperation (JIBC) has repeatedly offer low-interest rate loans, this time 0.4% over 40 years of payment and 10 years of grace period. I would say the offer is lot better than the recently issued US$1 billion global bonds which bears 7.75% interest per annum.
Jakarta Governor Sutiyoso seems want to close his 10-year tenure (next year) with something spectaculer to remember.
So he wrote president Susilo Bambang Yudhoyono recently asking government's decision on the MRT project. (This one is probably more important than Sutiyoso's proposal to create a Megapolitan Administration)
He doubted the plan of some state-owned enterprises to takeover the project. "Even we can't build good schools building," he said with cynism.
That's not the first statement of Sutiyoso. I remember back in 2001, Sutiyoso once claimed the construction of MRT project to be started that year at the cost of US$1.75 billion and would absorb 60,000 workers. He should make this happen now.
Three years ago, JBIC agreed to provide US$767.66 million funding for the MRT system at higher interest rate of 0.95%. So, if Sutiyoso was right with the latest offer of 0.4%, this one could significantly cut almost half the interest payments over 30 years time.
I wonder if government could make decision this time. But to my surprise,
government rejected Japan's offer on disagreement over terms of the loans (tied loans) and Indonesia's demand to have 75% local content in the project.
Fourteen years ago, when I was a reporter for technology beat, then minister for research and technology BJ Habibie (former president) was the one who heavily supported the country's long-awaited mass rapid transport system. I wrote many articles about the subway system many times only to be upset over and over. Even some of them with exact timetable that the MRT would be in operation by 2000.
I agree 100% with the MRT system, probably due to personal experience with Underground in London, UK or Bay Area Rapid Transport (BART) in Bay Area, San Francisco, USA. That's why I never fed up imagining Jakarta would have such system some day.
But, my goodness, 30 years have passed, we're keep talking about it. That's why Jakartans love to call MRT as a
Masih Rapat Terus (Still Under Discussion) project.
Imagine that, the idea was first floated in the 1970s and later during the administration of governor Surjadi Soedirdja, was last postponed after the financial crisis in 1997.
Transportation experts have repeatedly said that the MRT was one of the most effective solutions to tackling chronic traffic congestion in the capital, although they also said it would be extremely expensive.
Other observers say the city's messy underground sewer, power and telecommunications networks, its unstable soil structure and its recurrent flooding problems could turn any underground project into an engineering nightmare. The engineering fears are real given that Jakarta is basically a flood plain but Bangkok has been able to do it.
Imagine the congestion in the capital when the construction starts. But I think people would not mind at all, say for three years, as long as they know exactly MRT could make their life better off.
So what's the problem then?
Well, back in 1994, Habibie signed a memorandum of understanding with two Japanese companies, Sumitomo and Itochu, to build the MRT.
In 1995, when Surjadi was the governor, he signed the MoU with Japan European Group which consisted of PT Citra Lamtorogung (controlled by Siti Hardiyanti Rukmana, former president Soeharto's eldest daughter), PT Bakrie Investindo (controlled by Aburizal Bakrie, currently the coordinating minister for people's welfare),Itochu, and Ferrostaal (Germany).
Other investors worth mentioned are Ciputra Group, Lippo Group, Bukaka Group (partly owned by VP Jusuf Kalla's family) and Suthamtabie (a company owned by the family of Habibie).
I guess, as long as government can't settle the issue of who would be the investors in this project, we should wait few more decades, or even it will never come.
This time, government turned down Japan's offer for funding on local content issue, in which Indonesia government demanded 75% of the value of the project should be provided by local companies. It means that we have to wait 30 more years to really have MRT in place.
Others said intensive lobby from automotive producers may also block the MRT project. But if they book lower car sales in Jakarta, like in the last three months, blame the traffic!
