TEMPO.CO, Jakarta - It was seen as one solution to the congestion in the capital, but work on the JakartaBogorDepokBekasi light railway is facing the threat of stagnation. The problem: no funding for the Rp23 trillion megaproject. The initial payment scheme could not be implemented because the state-owned company appointed to manage it has insufficient capital.
There have been problems with the project since President Jokowi Widodo gave Adhi Karya the authority through Presidential Regulation No. 98/2015 on the Acceleration of the Light Rail Transit (LRT) in September 2015. It used funds injected from State Budget, but there was no decision about the time frame and repayment scheme.
The state capital injected funds (PMN) came from the State Budget, but how it was granted to Adhi Karya for this project was rather strange. As project manager, Adhi Karya received Rp1.4 trillion as capital, despite the government having clearly stated that PMNs were only to be given to state-owned enterprises for investment purposes.
There were also questions asked about the feasibility study. According to Jakarta Propertindo, the Jakarta government-owned company to build the LRT in the city, its feasibility study concluded that it would be impossible for the LRT developer to make a profit and sell cheap tickets if it also built the LRT overpass. Strangely, Adhi Karya said it was feasible.
With all these problems, it was no surprise when Adhi Karya threw in the towel. Although it had already spent Rp2 trillion, the company had only completed 12 percent of the first phase, from Cibubur-Cawang, Cawang-East Bekasi, and Cawang-Dukuh Atas. And the target date for completion has also slipped from the 2018 Asian Games to 2019.
Similarly, or even more complex, problems have cropped up with the JakartaBandung fast rail link. This project was targeted for completion in 2018, but funds from China have not materialized because the acquisition of the necessary land is far from completed. The consortium of state-owned companies managing the project has also run out of funds to complete the Rp 80 trillion project.
The fact that several infrastructure projects have ground to a halt should make the government reevaluate these large ticketsscale undertakings. For example, the fast rail and light rail projects were clearly forced through. Even power station projects have stagnated.
The main problems with almost all these infrastructure problems are land acquisition and payment. The government would not be wrong if it delayed less important programs at this time of economic difficulties and below target tax revenues. Finance Minister Sri Mulyani was right to halt the TransPapua and TransSulawesi projects.
The light rail project, if it comes into operation, will reduce the burden on the roads in and out of the capital. Although its passenger capacity is far less than the commuter trains that have long been in operation, it will play a significant role as an alternative means of transport. The government has appointed state-owned railroad company Kereta Api Indonesia as a project investor. This decision should have been accompanied with a revision of the presidential regulation that regulates payment schemes and better guarantees on the viability of projects. The chaotic experience of the monorail must not be repeated. (*)
Read the full story in this week's edition of Tempo English Magazine
