City Submits Regional Regulation Draft about PT JIEP and PT MRT Jakarta

Jakarta Provincial Government is encouraging PT Jakarta Industrial Estate Pulogadung (JIEP) and PT MRT Jakarta to become Regional Companies (Perseroda) in order to expand business expansion and improve capital structure. It was conveyed by Jakarta Regional Secretary Joko Agus Setyono in his speech representing Acting Governor Teguh Setyabudi at the Plenary Meeting, Jakarta City Council Building, Kebon Sirih, Central Jakarta.

to support institutional transformation

"The realization is to support institutional transformation through increasing agility, business development, and supporting future business potential," said Joko, as quoted from Jakarta Provincial Government's press release, Thursday (11/7).

Legislative-Executive to Discuss PT JIEP Majority Share Ownership

Joko then explained about the Regional Regulation Draft (Raperda) of PT JIEP (Perseroda) establishment. It is necessary to adjust the legal status of PT JIEP to become a Regional Company (Perseroda) as it is based on Government Regulation No 54/2017 about Regional-Owned Enterprises (BUMD).

"The establishment of PT JIEP is expected to have a significant impact on the development of Pulogadung industrial area, increase regional tax revenue, produce a multiplier effect on land value around the area, and improve community welfare through the labor absorption," Joko added.

Joko continued, Regional Regulation Draft on Regional Capital Participation of PT JIEP (Perseroda) to achieve a minimum share ownership of 51 percent by the Regional Government. It is aimed to secure land assets that have not been certified and improve the capital structure that will support future business expansion.

"We hope that the legal status change of PT JIEP into a Regional Company along with the increase in the company's capital as conveyed through this Regional Regulation Draft can be approved by the Council Meeting," Joko continued.

Moreover, Joko also delivered the Regional Regulation Draft on Amendments to Regional Regulation No 9/2018 about PT MRT Jakarta (Perseroda). Joko said that Jakarta Provincial Government continues to commit in encouraging the public transportation system development that supports the mobility and activities of residents, as well as driving the city's economic growth in supporting Jakarta's transformation as a global city.

"Constructing Mass Rapid Transit (MRT) as an integrated and sustainable public transportation infrastructure is one of the efforts made. As the operator, PT MRT Jakarta needs to improve its functions, duties, authorities, and operational area coverage, both through expansion and optimization of business activities outside the Jakarta area," Joko said.

In order to support the institutional transformation of PT MRT Jakarta, Joko assessed that it is necessary to amend the Regional Regulation No 9/2018. It is aimed to increase the agility for business development and capture future business potential. The Regional Regulation Draft is also intended to increase authorized capital and update the total value of Company's placed capital, that includes;

a. Additional fund for Phase 2A;

b. Additional Fund for Phase 2B;

c. Funding the MRT Jakarta's East-West Phase 1 Stage 1;

d. Additional Operational Working Capital (Association Funds) for MRT Jakarta's East-West Phase 1 Stage 1 and parts of Phase 2B constructions; and

e. additional capital expenditure and/or operational working capital in business development.

"We hope that PT MRT Jakarta will become a system integrator to realize an integrated mass public transportation system in Jakarta area and the Bodetabek agglomeration area, including integration of physical facilities, schedules, routes or networks, transaction systems, fares, and institutional management without eliminating its function and role as an operator," Joko stated.