Indonesian capital seeks more funds, strategic partners for rail expansion

[JAKARTA] The operator of the Indonesian capital's mass rapid transport network is seeking 10 trillion rupiah (S$972.8 million) in extra funds to complete a second line, and hopes to find strategic partners for a third and fourth line, a senior executive said.

Municipally owned MRT Jakarta is seeking more funding from the Japan International Cooperation Agency (JICA) to complete its 12km, second-phase development, and combine that with financing from local investors, its president, William Sabandar, told Reuters

"What we are suggesting is to have a blended financing in which on top of government-to-government lending, we are also looking for a strategic partner to build some transit-oriented-development," Mr Sabandar said in an interview.

MRT Jakarta would generate extra revenue by offering rights to build around the metro stations, with talks underway for such licences in three areas, starting this year, he added.

The MRT opened last year after two decades in the making and was developed with Japanese expertise and 38.5 trillion rupiah in JICA loans. It is the centrepiece of President Joko Widodo's infrastructure ambitions, which aim to alleviate some of the world's worst traffic congestion.

Tens of billions of dollars have been pledged over the next 10 years to modernise Jakarta's transportation.

Restrictions to control coronavirus infections have hurt MRT Jakarta's revenues, Mr Sabandar said, with average daily passengers slumping from a high of 90,000 a day to about 4,000 in April and May. That has since picked up to about 23,000 daily passengers.

MRT Jakarta is exploring new alternative funding for its third and fourth phase development east and west Jakarta, from corporate and municipal bonds to strategic partnerships with multilateral lenders such as Germany's KfW and the China-backed Asian Infrastructure Investment Bank.

"We still see the possibility of having investors partner up with MRT to build the next lines," he said.

REUTERS