July 25, 2019 / 9:53 AM / 4 months ago

Indonesian capital city to invest $5 billion in MRT extension

JAKARTA (Reuters) - The operator of the Indonesian capital’s mass rapid transit system said on Thursday it plans to extend the track over the next seven years, estimating a total investment of 75.5 trillion rupiah ($5.40 billion).

A security guard stands as he patrols at a station during Mass Rapid Transit (MRT) full trial run in Jakarta, Indonesia, March 12, 2019.REUTERS/Willy Kurniawan

Jakarta suffers from some of the worst traffic jams in the world and its governor has pledged to invest more than $40 billion in the next 10 years to upgrade its transportation and other infrastructure.

The city’s first $3 billion MRT system opened in March, running 8 kilometers (5 miles) partially underground from the south to central Jakarta along main thoroughfares.

This will be extended by 38 km, William Syahbandar, chief executive of municipally owned PT MRT Jakarta, told a news briefing.

The company plans to borrow from lenders like the Japan International Cooperation Agency, the Asian Development Bank and China-backed Asian Infrastructure Investment Bank, as well as getting funding from the government and private sector loans, Syahbandar said.

PT MRT Jakarta is expected to announce the winner of a tender to build the second line, a 7-km stretch that runs underground from downtown to north of the city, after an August deadline for proposal submission is passed, according to its invitation for bids.

The second line is expected for completion by 2025, Syahbandar said.

The third line, a 31-km track connecting the eastern part of the city to the west, will begin construction next year and is expected to be operational by 2026, he added.

A consortium of Indonesian and Japanese firms won the tender for the first phase.

Jakarta is home to more than 10 million people, but around three times that many people live in the surrounding towns adding to the area’s severe congestion.

President Joko Widodo in April decided to move the capital from Jakarta, which is on the main island of Java, to Borneo island. If everything goes to plan, the first stage of relocation will take place in 2024, officials have said.

Reporting by Jessica Damiana; Writing by Gayatri Suroyo; Editing by Nick Macfie

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