The central government will bear the burden of ensuring 49 percent of project financing Mass Rapid Transit (MRT) or a mass rapid transit system worth Rp15, 7 trillion

Hatta Rajasa

The central government will bear the burden of ensuring 49 percent of project financing Mass Rapid Transit (MRT) or a mass rapid transit system worth Rp15, 7 trillion



The central government will bear the burden of ensuring 49 percent of project financing Mass Rapid Transit (MRT) or a mass rapid transit system worth Rp15, 7 trillion, while reducing loan financing obligations of the city administration.

"Jakarta necessary means of transport and for it to be considered for increasing the share of the central government share to 49 percent, because the provision Viability Gap Fund (VGF) should remain below 50 percent," said Coordinating Minister for the Economy Hatta Rajasa on Wednesday.

With the decision, the scheme costs loan from the Japan International Cooperation Agency (JICA) will assign 49 percent for grants to the Government of Jakarta and 51 percent allocated as loans forwarding.

According to Hatta, this decision is the best solution related to the financing MRT, previously questioned by Jakarta Governor Joko Widodo, as operator of the means of mass transportation is the city administration.

"This is something the first time to a central government scheme to provide a large enough portion to it. I have submitted a letter to Mr. Jokowi," he said.

Through this decision, the Hatta ensure that the MRT project will be continued, and the expected development of the corridor Lebak Bulus-Indonesia Hotel along the 15.7 kilometer can be started and completed in 2015.

Meanwhile, Finance Minister Agus Martowardojo have to recalculate the latest MRT financing scheme and the decision to change the burden of the loan scheme, still in accordance with the portion of loans and grants in the budget.

"The impact of fiscal we can see and it's managed," he said.

Infrastructure Deputy Ministry for National Development Planning / Bappenas Dedy Priatna said the central government to share the burden of the MRT project because the city administration has limited funds to underwrite the financing of large infrastructure projects.

However, the central government is a minority person in the load, as it is stated in the Regulation of the Minister of Finance related to the provision of financing infrastructure projects through VGF scheme.

"Naturally, if the government must spend the funds. But there is a rule that the VGF's finance minister, if the majority may not support that the central government should be a minority," he said.

Previously, the scheme costs loan from the Japan International Cooperation Agency (JICA) has been agreed in 2005, set a 42 per cent grant to the Government of Jakarta and 58 percent allocated as loans forwarding.

However, Jakarta Governor Joko Widodo propose a new cost burden reduction scheme, which is 40 percent allocated as loans and 60 percent of forwarding a grant to the city administration.

This is done Jokowi, because the old financing scheme subsidy would burden the city administration and the burden on society of mass transport users with high ticket prices.