Palapa Ring Project Not Viable

Friday, 15 December, 2006 | 15:23 WIB

TEMPO Interactive, Jakarta: The Palapa Ring project, a fiber optic network construction connecting all areas in Indonesia that is worth US$1.517 billion, is not viable. Spokesman of the Directorate General of Post and Telecommunication at the Information and Communication Department, Gatot S. Dewa Broto, said investors regard Indonesia as not having a clear format in developing the telecommunication industry.

“They (investors) question the numerous telecommunication regulations that are not consistent,” he said at the Aston Hotel. Jakarta, yesterday (14/12). Investors also consider the Palapa Ring project is not reasonable to sell because telecommunication usage in Indonesia is low and the investment cost is large.

The government plans to hold a Palapa Ring project auction in October 2007. Palapa Ring is one of the infrastructure projects offered in the Indonesia Infrastructure Summit in Jakarta from November 1 to 3. In the project's blueprint, the Palapa Ring contains seven fiber optic rings which cover Sumatra, Java, Kalimantan, Nusa Tenggara, Sulawesi, Maluku and Papua plus one network that connects all the rings.

The length of the network totals 30,000 kilometer, connecting 33 provinces and 440 regents/cities. According to the Director General of Post and Telecommunication, Basuki Yusuf Iskandar, some time ago, the auction preparation is only up to feasibility assessment in June 2007. The construction starts early 2008 for three years until 2011.

According to Gatot, the government is analyzing making a road map so that regulation on telecommunication has a clear aim and the telecommunication industry can grow. This project will be offered again in the Indonesian Telecommunication Infrastructure summit in mid-2007

Eko Nopiansyah