Govt pays Rp1 trillion in installment for LRT projects

Jakarta (ANTARA News) – The government has paid two contractors Rp1 trillion each for the construction of light rail transit (LRT) projects in Jabodetabek (Jakarta-Bogor, Depok, Tangerang and Bekasi) and Palembang, South Sumatra.

The two contractors are PT Adhi Karya for the Jabodetabek project and PT Waskita Karya for the Palembang project.

“The government has paid the contractors Rp1 trillion each for the Jabodetabek and Palembang projects,” Transportation Minister Budi Karya Sumadi declared after attending a coordination meeting at the office of the coordinating minister for Maritime Affairs in Jakarta, Wednesday.

The government is still discussing how to reimburse the contractors, who are still bearing the construction cost of the project, he revealed.

“Regarding the installment, we will discuss it with the finance minister this week to seek a solution for the funding system, whether it would be through banking loans, sukuk bonds or others. It will be decided by the finance minister,” Sumadi said.

Based on Presidential Regulation (Perpres) No. 55/2016 on the amendment of Perpres No. 116/2015, concerning the acceleration of the development of LRT in South Sumatra and Perpres 65/2016 on the amendment of Perpres 98/2015, concerning the acceleration of the development of LRT in Jakarta, Bogor, Depok and Bakasi, the funds for the construction of the LRT projects are to be allotted from the state budget.

On the same occasion, PT Adhi Karya President Director Budi Harto stated the reimbursement for the project construction cost would be done in gradual stages at a total cost of Rp23.5 trillion.

Although, this year, a reimbursement payment of Rp1 trilion has been made, Sumadi acknowledged that no decision had been made yet on the period for the repayment, as it has to be discussed with the finance minister.

“It has not been decided whether it will be until 2014 or later. It will be studied by the minister of finance,” he added.

However, he admitted that up to now, the company has spent Rp2 trillion for early development. “For this year, we set a budget of Rp7 trillion for the LRT project construction,” Harto said.

In order to meet the funding need, the company will issue bonds. However, he claimed to be still considering other options, including banking loans.

“We are also studying how much is the value in the composition of the funding system,” he stated.

Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan promised there would be no problems with the funding for the LRT projects, including the provision for the state capital participation, amounting to Rp2 trillion.

“We have just discussed with the transportation and finance ministers about the continuity of the projects, so that they could be finished in 2019. We will check what is the best funding options; whether through the issuance of suku bonds or others. We will probably have a clearer picture next week,” he explained.(*)

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