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JAKARTA. Transportation Minister Budi Karya Sumadi has announced that the government is inviting private lenders to take part in the construction of light rail transit (LRT) projects in Greater Jakarta through the transit oriented development (TOD) scheme.
Under the scheme, private lenders are allowed to develop properties near LRT stations.
Citing the result of a study by financial consulting firm PricewaterhouseCoopers (PwC), Budi said the TOD scheme would increase LRT passengers and reduce the burden on the state budget because the stations would be developed by private companies.
“We have discussed the involvement of private lenders to build the TOD. We will prepare the terms of reference for the auction," Budi said on Monday after attending a meeting to discuss the LRT project with Maritime Coordinating Minister Luhut Pandjaitan in Jakarta.
Budi said the ticket price for LRT trains would be Rp 12,000 (US 90-cents) per trip with the assumption that the government would subsidize the LRT to the tune of Rp 16 trillion for 12 years and the number of passengers would reach 116,000 per day.
“If the number of passengers grows more than 5 percent, the government will reduce the subsidies,” he said, adding that when the private sector joined the project, LRT lines could be extended to Bogor.
State-owned construction company PT Adhi Karya director Budi Harto said around 50 hectares of land near LRT stations could be developed into commercial areas. The Rp 23.5 trillion (US$1.77 billion) project will connect Cibubur in East Jakarta to the capital city's downtown.
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