Panghegar Group plans to develop a monorail in Bandung, the capital of West Java province, in a move aimed at easing traffic congestion in the city.
The Bandung-based business group focusing on hotel management and property will work with China National Machinery Import & Export Corporation on the project.
Cecep Rukmana Ruhyat, the patriarch of the group, disclosed the plan to the Jakarta Globe on Tuesday. The planned investment for the project, which will be developed in five phases, is estimated at more than Rp 20 trillion ($1.76 billion).
“If we don’t upgrade the public transportation network in Bandung, then in the next five years the situation will be worse than Jakarta,” Cecep, who is also an urban planning engineer from the Bandung Institute Technology (ITB), said on Tuesday.
Cecep added that the regional government wanted to push groundbreaking for the mega project in August, but said the project was still in the feasibility study stage.
Around 30 percent of the project financing is expected to come from equity from the two investors and the remainder from bank loans.
Panghegar Group and CMC signed a memorandum of understanding for cooperation in the multi-billion-dollar project in October last year during the Asia-Pacific Economic Cooperation (APEC) summit in Bali.
President Susilo Bambang Yudhoyono and Chinese President Xi Jinping witnessed the MoU signing ceremony.
According to its master plan, there will be five monorail corridors: from the Leuwi Panjang bus terminal to Tanjungsari (29.7 kilometers); from Leuwi Panjang to Soreang (13.3 kilometers); along the Sungai Cikapundung artery (10.2 kilometers); from Leuwi Panjang to Ngamprah subdistrict (18.6 kilometers); and from the Gedebage railway station to Majalaya subdistrict (12 kilometers).
Cecep said the monorail development would be part of a bigger master plan to develop Bandung. The plan involves developing major infrastructure facilities like a monorail and satellite cities on the outskirts of the city.
“A monorail is a loss-making project. It should be developed by the government, but the government doesn’t have any money and if it is subsidized it is also too costly.
The solution is to involve the private sector and compensate for its losses with property projects that will be connected to the monorail,” Cecep said.
He added that the monorail would connect to the planned six satellite cities.
“One satellite city needs around 1,000 hectares,” Cecep said, adding that with this plan, Panghegar Group would be focusing more on its property business.
“We can build real estate in the satellite city and with the monorail we can create an environment that will be comfortable for living and commuting,” he said.
Panghegar Group has been transforming its business from previously hotel owner and operator into property developer.
Its main asset, Hotel Panghegar, known for its Sundanese touch, has been transformed into a mixed-used property offering apartments, a convention center, offices and a commercial center. (JakartaGlobe)