The Jakarta Monorail was meant to have two routes servicing a combined 29 kilometers connecting various parts of the city. Failed attempts at the project have led the Jakarta governor to put it on hold indefinitely in favor of a privately funded light rail system. ( JG Photo/Safir Makki)

Monorail Projects Hit Obstacles

BY :INVESTOR DAILY

JANUARY 12, 2015

Jakarta. The development of two major monorail projects in Indonesia — one in Jakarta and one in Bandung, West Java — could be facing serious constraints over difficulties in terms of financing and poor business feasibility.

On Monday, Jakarta Governor Basuki Tjahaja Purnama said he would inform the developer of the city’s monorail project, the Jakarta Monorail consortium, about the city administration’s intention to scrap the project.

“I’ve asked [the Jakarta administration] to draft a letter that says we will not allow JM to build a monorail in Jakarta with such route,” Basuki said at City Hall on Monday.

The project broke ground in October 2013, which was witnessed by the former governor, Joko Widodo.

The renewed project was estimated to cost $900 million to build two routes — the green line, a 15-kilometer monorail line with 15 stations connecting Kuningan, Senayan and Dukuh Atas, and a blue line spanning 14 kilometers and connect Kampung Melayu and Tanah Abang.

The Jakarta administration allowed JM to resume the project after stalling in 2011.

JM and its Singapore-based parent company, Ortus Holdings, initially planned to build the monorail with a number of contractors, including China’s Changchun Railway Vehicles and China Communications Construction Company (CCCC).

But since October 2013, development did not go smoothly. The project continued to face problems such as the contractor failing to show the required bank statements and spatial planning issues.

Basuki said Jakarta will find a legal gap to abolish the appointment of JM. Last year, Basuki put forward a Rp 7 trillion ($553 million) proposal to build Indonesia’s first light rail transit system to replace the monorail project.

Bandung The other major monorail project planned in Bandung also faces serious problems.

The $1.8 billion project may miss its June deadline to begin construction, as the rupiah’s depreciation forces contractors to recalculate their costs.

Endi Roswendi, director of Jabar Moda Transportasi, said that the company is now targeting a feasibility study to be completed by June to take into account the rise in expenses stemming from the weak rupiah.

The rupiah trades at around 12,600 against the US dollar, compared to around 11,000 when the monorail’s initial plan was drawn up.

“A lot of factors need to be recalculated,” Endi said over the weekend.

He did not say when construction would start. Jabar Moda Transportasi is a joint venture between Jasa Sarana, a West Java government-owned enterprise, and Sarana Infrastructure Indonesia, a unit of the Bandung-based property group Panhegar.

Jasa Sarana owns 80 percent of the joint venture.

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