Deal struck, moving ahead with Jakarta monorail project
JM president director Sukmawati Syukur said on Wednesday that Adhi Karya had sold its entire shares to JM.
When the consortium was established, Adhi Karya directly controlled 7.5 per cent of JM shares, and controlled more JM shares through PT Indonesia Transit Central (ITC), which was 20 per cent owned by Adhi Karya.
ITC, one of the consortium’s founders, had 91 per cent of JM shares at that time.
Sukmawati said that the consortium was now 10 per cent controlled by ITC and 90 per cent controlled by the Singapore-based Ortus Group, which JM decided to engage earlier this year in exchange for US$300 million in capital from Ortus.
The Ortus Group is controlled by tycoon Edward Soeryadjaya, who media reports say funded then governor candidate Joko Widodo’s campaign.
JM’s decision to include the Ortus Group in the consortium has forced the Hadji Kalla Group, a conglomeration affiliated to former vice president Jusuf Kalla, to relinquish its ambition to take over JM.
Adhi Karya president director Kiswodarmawan said on Wednesday that JM had agreed to pay 190 billion rupiah (US$19.5 million) to acquire support pillars built by Adhi Karya when it held 7.5 per cent of JM shares.
The figure, which is in accordance with the present value, is slightly lower than the 193 billion rupiah initially demanded by Adhi Karya.
“It’s business anyway, there must be a deal,” Kiswodarmawan told The Jakarta Post, commenting on the lower value of the deal.
Adhi Karya, the project’s subcontractor, built rows of support pillars along roads in Senayan, Central Jakarta, and Kuningan, South Jakarta between 2004 and 2007.
The pillars were part of the planned first phase of a 14.3 kilometre route connecting Kuningan and Semanggi in Central Jakarta. However, the construction stalled as JM failed to pay Adhi Karya for the work.
Adhi Karya recently appointed a public auditor to assess the value of the support pillars.
The auditors announced that the pillars were worth 193.66 billion rupiah as of January 31, far above the 130 billion rupiah JM had initially offered to pay based on an evaluation conducted by the Development Finance Controller (BPKP).
According to Adhi Karya corporate secretary Amrozi Hamidi, the pillars were worth 120 billion rupiah in 2007, based on a Supreme Audit Agency (BPK) audit, on top of 26 billion rupiah, including value-added tax, that JM owed to the state company.
“We hope [JM can pay its construction debt] by April 5,” Amrozi said.
Governor Joko Widodo said he had been informed of the deal and that he was now waiting for the documents before giving the go-ahead for the US$725.59 million project.
“I can give my approval and the work can start as soon as the day after I receive and examine [the documents],” he told reporters at City Hall.
JM had previously said it aimed to begin working on the construction in April, following the deadline set by the governor for the monorail’s launch early next year.
The consortium is proposing to build two lines: The green line, with 16 stations, will extend 14.27 kilometres from Komdak (the city police headquarters) to Satria Mandala Museum, both in South Jakarta; and the blue line will stretch 9.72 km from Kampung Melayu in East Jakarta to Roxy in West Jakarta, with 11 stations.
Sukmawati said the company had officially submitted the required documents to the city administration and would resume construction immediately after securing the governor’s approval.
She also said the company was preparing a tender to find a new contractor that would replace Adhi Karya.