Councilors question Rp 411b for Marunda

Tifa Asrianti , The Jakarta Post , Jakarta | Tue, 11/11/2008 10:58 AM | City

City councilors questioned the administration's plan to shell out Rp 411 billion (US$39 million) to buy more stakes in PT Kawasan Berikat Nusantara (KBN) in Marunda, North Jakarta.

Out of seven factions four are questioning the plan: the Democratic Party, the United Development Party (PPP), the National Mandate Party (PAN) and the Golkar Party.

Siti Sofiah, a Democratic Party councilor, said Monday that her faction did not agree to the equity participation plan as the administration had yet to hold a feasibility study on it.

"We think such a huge amount of funds would be better allocated to programs that correspond with public needs, such as flood mitigation or the prevention of dengue fever that is likely to happen during the rainy season," she said during Monday's plenary session.

The 2009 draft budget allocated Rp 185 billion for cultural programs and Rp 244 billion for manpower.

Agus Darmawan, a National Mandate Party (PAN) councilor, said that executives should study how much return it would gain from the investment in KBN.

"Equity participation does not automatically generate city revenues. In some cases, it incurs loss. We want to know the reasons for the decision," Agus said.

Equity participation in KBN requires Rp 411 billion. To finance the investment the city administration plans to allocate Rp 395 billion from 2009's budget and Rp 16 billion from the divestment of six city-owned companies.

The city administration currently holds an 11.3 percent stake in KBN; the rest of the shares belong to the central government. The equity participation is expected to raise the administration's ownership to 51 percent.

Nuraini Syaifullah, a councilor from the PPP faction, said her party wanted to know more about the planned construction of a new trading port in Marunda.

"We see the port development plan as being similar to the Special Economic Zone in Batam island. We want to know more about it," she said.

Inggard Joshua, a councilor from the Golkar Party, said that his party wondered why the administration initially announced that the equity participation required only Rp 100 billion but then asked for Rp 411 billion in the 2009 budget plan.

City Secretary Muhayat previously said that his administration only temporarily allocated Rp 100 billion for the equity participation in 2009 draft budget.

"If we could carry out the plan and the due diligent process had ended, we would allocate the exact budget needed with the council on the budget revision process," he said.

According to a data from the governor's 2007 budget report, KBN recorded Rp 1 billion in total revenue, falling short of the targeted Rp 1.1 billion.

Besides increasing equity participation in KBN, the city administration will also buy a bigger stake in subway operator PT Mass Rapid Transit Jakarta (PT MRTJ) with Rp 105 billion and complete its equity in PT Jakarta Tourisindo with Rp 2.63 billion in investment.

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