April 01, 2005

Monorail Companies Pressing for Contracts in Asian Cities

In the last few months, monorail companies have been heavily marketing their projects in Indonesia, China, and India. There are two main monorail manufacturers pushing projects: Hitachi of Japan and MTrans Holding of Malaysia. New monorails were built recently in Chengdu, China, and in Kuala Lumpur. In India, MetRail of Switzerland and Fraser Nash of Great Britain have been promoting monorail projects for Hyderabad, old Delhi, and other cities. In Jakarta, PT Jakarta Monorail, with ties to MTrans, continues to push the city to invest in expansion of the system.

The project is farthest along in Jakarta. There, two corridors were identified by DKI Jakarta as eligible for monorail construction, and the company PT Jakarta Monorail began construction. Construction stopped after the company requested over $20 million annually in operating subsidies for seven years and an additional government equity investment of $60 million. It is not clear at the moment if DKI Jakarta will approve this. One proposal mooted recently in the Jakarta Post was to finance these subsidies by implementing electronic road pricing (ERP) along roads parallel to the planned 27 kilometer monorail.

While many experts in Indonesia support the used of ERP to finance mass transit, they question why government revenue from ERP should be earmarked to a single private company for a project that has not been subjected to competitive bidding. Expanding the existing TransJakarta BRT system to serve the proposed monorail corridors would be much less expensive and provide a much cheaper and better integrated service.

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