The Minister of Finance (MoF) has issued Regulation No. 30/PMK.02/2007 to facilitate the implementation of Presidential Regulation No. 103 of 2006, particularly as it relates to the guidelines for implementing the government’s guarantee for additional borrowings by the government of Jakarta to ensure the completion of the Jakarta monorail project.
The provision of the guarantee is conditional on the fulfillment of certain conditions. The first of these conditions is that the guarantee must be approved by the House of Representatives (DPR) and will be accounted for in the State budget. The Jakarta Regional House of Representatives (DPRD) must approve the agreed guarantee, make provisions in the Regional budget for the agreed guarantee, and produce a verifiable report relating to the daily capacity of the monorail project.
The guarantee will cover passenger shortfall to an agreed maximum expenditure. The passenger shortfall in dollar terms cannot exceed USD 11.25 million per annum over a five-year period. It must also be noted that the Central Government’s shortfall obligations only kick-in after the Jakarta Government has made their proportional payments on the agreed shortfall level.
The Closing Provisions of the Regulation are explicit in stating that within 36 months of this Regulation being signed the monorail project must be in commercial operation with a capacity of 270,000 passengers per day. This is a critical provision because any failure to be in commercial operation within 3 years will render the guarantee void.
This Regulation has been in force since 15 March 2007.
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