US Investors Interested in Funding Jabodetabek LRT Project

INDUSTRY.co.id - Jakarta - Coordinating Minister for the Ministry of Marine Affairs, Luhut Binsar Pandjaitan, said that the minimal structure of the Jakarta-Bogor-Depok-Bekasi light railway using the State Budget has attracted investment from the United States Blackrock to invest.

Luhut when reviewing the Jabodebek LRT project on Jagorawi Toll Road side in Cibubur area, Jakarta, Friday (4/8/2017) said the funding structure of the project is attractive thanks to the mature calculation with high return on investment (IRR).

"I would like to inform you, Blackrock, one of the world's 5 trillion dollar finance managers who wants to come here, wants to finance this project because it is very interesting," he said.

The former Coordinating Minister for Political, Legal and Security said the funding structure with high IRR was derived from the use of signaling "block" signaling technology that allowed the train to carry more passengers. He even mentioned that adding passengers could save total cost up to Rp6 trillion.

"The 'fixed block' converted into 'moving block' adds passengers from 260 thousands per day to 475 thousand people per day, resulting in savings made here and there by the team, so this team I see could save Rp6 trillion," he said.

Existing efficiency is also considered to make the project highly commercial plus the involvement of commercial banks and government guarantees.

Nevertheless, Luhut admitted Blackrock is still reviewing to be included in the project financing. He also said the company could go into any project because it means the government could reduce projects that use the state budget.

"They are (entry) anywhere as long as they see the government for business model like this.We own happy because we have very much use the state budget. This way the state budget can be reduced and we can can 'leverage financing' outside," he said.

The project with minimal funding structure of the State Budget is expected to be applied to similar projects in densely populated areas such as Bandung, Surabaya, Makassar, Semarang, or Medan.

"No need to rely too much on the state budget again, this is successful, people have been looking," he said.

The Jabodebek LRT project is done by Adhi Karya as a contractor and PT KAI (Persero) as an investor and operator. Funds required for the project amount to Rp26.7 trillion consisting of the state budget through state equity participation (PMN) and banking credit.

The government covers around Rp9 trillion and the rest comes from bank loans from Bank Mandiri, BRI, BNI, CIMB Niaga and BCA.