Ministry to open agribusiness markets in 34 provinces

Jakarta (ANTARA News) - The Agriculture Ministry is ready to develop agribusiness markets in 34 provinces in 2008 to make it easier for farmers to sell their products in urban centers directly, its chief said.

Speaking at the inauguration of a weekend market at Jakarta`s Monas Park here Saturday, Agriculture Minister Anton Apriyantono said his ministry had already earmarked funds for the program.

The system would allow farmers to improve their bargaining position and increase their earnings by 23 percent, he said adding that the system had already been implemented in developed countries and even in Malaysia for the past 10 years.

Meanwhile, agricultural product management and marketing director general Djoko Said Damardjati said the Agriculture Ministry would allocate Rp100 million to Rp150 million for the development of each agribusiness market whose physical structures would be set up using the knock-down method.

He said at the beginning the ministry would finance transportation to carry the farmers` agricultural products from rural areas to urban markets for one year.

"Afterwards the farmers will pay for the transportation by themselves as selling goods at the agribusiness markets is a profitable business," he said.

The weekend market in Jakarta has 50 stands which are selling fresh fruit, vegetables, flowers, husbandry products and other processed products. The agricultural products come from the Bogor, Bandung, Cianjur, Depok, Sukabumi, Purwakarta and Banten areas.

Taman Ismail Marzuki gets face-lift

Mustaqim Adamrah, The Jakarta Post, Jakarta

The Jakarta administration announced Friday it was planning to upgrade Taman Ismail Marzuki, a 38-year-old art center in Central Jakarta, and called on aspiring architects to help in the process.

Head of the city's museums and culture agency, Aurora Friday, said the administration would hold an architectural design contest in conjunction with the Indonesian Architects Association.

She said the administration was encouraging people to participate in the contest in order to establish, "what (the public) want the park to look like so it can inspire artists as it did in 1968 when it was first established".

Aurora said the administration initially developed a master plan for the park's expansion back in 1995.

"But so far we have built only the theater. The auditorium has the capacity to hold 1,200 people," she said.

The theater was officially opened earlier this month.

"We still have more work to do on the exterior of the building, and this is expected to be finished by the end of this year," Aurora said.

The chairman of the Jakarta chapter of the architects association, Ahmad Djuhara, said the contest's judges were looking for unique designs.

"It is also a matter of how well participating architects can bring out the spirit of the arts within their designs," he said.

"Their designs must also be comparable to buildings in developed countries. For example, Singapore has many grand theater buildings in line with its mission to become the leader among Southeast Asian countries."

Ahmad said registration for the competition would open next Friday, and only members of the association were eligible to enter.

"This requirement is in compliance with a regulation that stipulates only certified architects can practice. We can assure you that all of the association's architects are legitimate and certified," he said.

The association would submit the entries to a team of seven judges, including urban architects and artists, Ahmad said.

"The judges will deliberate on Nov. 27 and will determine the winner later that day. However, we will officially announce the winner at some stage before Dec. 15," he said.

Ahmad said the winner of the competition would start working with officials on a more detailed master plan next year, with construction set to begin in 2009.

Iran introduces its tourist attractions

Iran is opening tourism information offices in 25 counties in a bid to introduce the country's rich cultural and tourist attractions.

Presstv, Sat, 29 Sep 2007 06:31:00

Iran has so far established five tourism information offices in Sweden, Libya, Qatar, Pakistan and Saudi Arabia, said Deputy Director of the Cultural Heritage and Tourism Organization, Mohammad Sharif Malek Zadeh.

Iran has also signed several Memoranda of understanding on tourism with Indonesia, Saudi Arabia and Syria, the official said.

He said Iran had invited 200 foreign diplomats and their families for a one- week free tour of Iran.

Telecommunications industry wide open for development

Yogyakarta (ANTARA News) - The telecommunications industry in Indonesia is still open to further development, both in terms of technology and public service.

"Many investors are still keenly interested in the development of the telecommunications industry in Indonesia, in view of its still low penetration and teledensity compared to these aspects in other countries, especialy in South East Asia," President Director of Smart Telecom, Sutikno Wijaya said here Friday.

For these reasons, he said during the launching of Smart Telecom, Sinar Mas group expressed interest in doing business in the telecommunications business by providing cellular services.

"In providing its services, Smart is supported by the CDMA 20001X and EVDO-Rev A technology at 1900 MHz. The choice for the technology is based on comprehensive business considerations and calculation," he said.

The application of the technology, he said, is prompted by a wish to provide quality and affordable communications services to the public.

"With the cellular license that we already have, we have opened services in several major cities in Java, including Jakarta, Bandung, Bogor, Cirebon, Surabaya, Malang, Semarang, and Yogyakarta," he said.

In the meantime, Director of Smart Telecom Ubaidillah Fatah said that in providing quality services, Smart planned to build 1,500 BTS facilities at a cost of Rp3 trillion.

"We are trying to act fast to secure one million subscribers this year. For Yogyakarta and environs we are trying to secure 100,000 subscribers," he said.

He also disclosed that for 2008, Smart is drawing up a plan to provide services to Sumatera, Kalimantan, and Sulawesi, and later to Maluku and even Papua," he said.

In the meantime, Deputy CEO of Smart Telecom Djoko Tata Ibrahim said that Smart wished to give a differentiation in setting tariffs as transparent operator, and launch promotions nearer to the market.

"In this context we will offer various bundling handset packages at Rp 300,000 as the cheapest, and this low price is expected a much wider segment of the public will enjoy celluar services," he said.

Yogyakarta to build wildlife park

Yogyakarta (ANTARA News) - The Yogyakarta administration will turn a 634-ha piece of land in the Bunder area of Gunungkidul district into a wildlife park for research and tourism as well as to increase the local people`s welfare, an official said.

"Therefore, the administration will set up a technical implementation unit in 2008 to manage development of the proposed forest," head of the Yogyakarta forestry and plantation office`s program development division, Hardiyanto, said here Thursday.

"Ten percent of the proposed wildlife area will be used by the technical implementation unit to develop supporting facilities," he said.

Bunder conservation forest has so far been managed jointly by Gajahmada University (UGM) and the Yogyakarta administration for a research program.

However, there was no information on the amount of funds needed to create the wildlife park.

Bridge project deal to be signed in Oct.

Multa Fidrus, The Jakarta Post, Banten

The Banten and Lampung provincial administrations are expected to sign an agreement with PT Artha Graha Network early next month on the construction of a bridge spanning the Sunda Strait separating Java and Sumatra.

Banten Governor Ratu Atut Chosiah said Thursday a precise date for the signing had not been set because they were still waiting for confirmation from the Transportation Ministry.

Atut earlier said the signing was scheduled for Oct. 3 but the ministry requested another date because Transportation Minister Jusman Safei Djamal was scheduled to attend a Cabinet meeting the same day.

The governor said Minister Jusman wanted to be in attendance when the agreement was signed on the long-awaited bridge connecting Java and Sumatra.

"We will need to coordinate with all related parties to discuss a convenient time for all of us. The Transportation Ministry has a great interest in this project. This inter-province infrastructure project is under the ministry's authority," she said.

Representatives from the National Development Planning Board are also expected to witness the signing of the agreement, the governor said.

Banten Council Speaker Adi Suryadharma said every governor and provincial council speaker from Java and Sumatra islands would attend the signing.

It is hoped construction on the US$10 billion bridge can begin in 2009 and be completed within five years.

PT Artha Graha Network, owned by Tommy Winata, is the only company that showed interest in investing in the Rp 94 trillion project.

The bridge will cross over several small islands, including Ular, Sanghyang and Prajurit, and will have six lanes for vehicles and a lane for pedestrians.

Local firms win power transmission contracts

Ika Krismantari, The Jakarta Post, Jakarta

State power company PLN awarded six contracts worth Rp 913 billion (approximately US$99.7 million) in total to local companies Thursday for the construction of power transmission networks.

Speaking to reporters following the signing of the contracts, PLN transmission and distribution director Herman Darnel Ibrahim said five of the contracts were for the construction of transmission facilities for new coal-fired power plants to be built under the 1,000 megawatt power crash program.

A total of 33 transmission facilities will be built as part of the project.

"We want to make sure the power connections will be ready as soon as the construction of the power plants is completed," he said.

The five contracts were awarded to Modaco Enersys, Modern Jaya Cons, Tehate Putra Tunggal, a consortium of PR Citicon, Adhinugraha and Kencana Alam Putra and a consortium of Meta Epsi and Dalima Raya.

Modaco Enersys won a contract worth Rp 18.86 billion to build a transmission facility for the 600-megawatt Suralaya Baru power plant in Banten, West Java.

The consortium of Meta Epsi and Dalima Arya will build a power grid worth Rp 247.8 billion for the 900-megawatt Indramayu power plant in West Java, while Tehate Putra Tunggal will build a power connection valued Rp 216.9 billion for the 1,050-megawatt Pelabuhan Ratu power plant in West Java.

The consortium made up of Citicon Adhinugraha and Kencana Alam Putra were awarded a contract worth Rp 141.26 billion to build a transmission network for a 600-megawatt power plant in Rembang, Central Java, while Modern Surya Java Kons was awarded a contract worth Rp 79.49 billion to build a power transmission grid for the Tanjung Awar-Awar power plant in Tuban, East Java.

Herman said the construction of the power grids was expected to be completed six months before the power plants started operating in April 2009.

"Another seven contracts related to power transmission projects will be signed in October, and a further 21 contracts will be signed by November," Herman said.

He said the company would need at least Rp 18 trillion to complete the transmission projects.

Aside from projects related to the crash program, PLN also signed Thursday a contract worth Rp 209.8 billion for the construction of a power grid spanning 3 kilometers connecting Madura Island and Java.

The grid will be built by Centra Multi Elektrikindo and is expected to be completed within 16 months.

PLN president director Eddie Widiono said the crash program could be completed by the end of 2009 as scheduled, despite the fact 14 power projects outside Java had to be re-tendered due to a lack of bidders.

Under the program, PLN will build 10 coal-fired power plants with a total capacity of 6,900 megawatts in Java and 25 power plants outside Java with a total capacity of 3,100 megawatts. Construction of some of the projects has already commenced.

PLN to build 9,000 MW electricity for Sumatera

Jambi (ANTARA News) - The government is planning to build 10,000 MW steam-powered electricity plants (PLTU), of which 9,000 MW will be designed for Sumatra, President Director of state-owned electricity company (PLN), Edi Widiyono said.

Edi Widiyono made the remarks after a meeting with Jambi Deputy Governor H Antony Zeidra Abidin here on Wednesday. He said that the remaining 1,000 MW would be provided for other regions in Indonesia.

The PLN president director said that it was a great challenge for the government to build PLTU`s with a combined capacity of 10,000 MW.

"But we are convinced that the government would be able to build 10,000 megawatts to cover the shortages of electricity supplies in the country," he said.

He said that the target would be achieved as long as there was good cooperation with the central government, regional governments and investors.

Edi said that the challenges the government was facing in the development of 10,000 MW electricity included land clearance for transmission lines.

He said that at least 120 companies had proposed applications for taking part in the tender of the PLTUs development projects.

The government has plans to launch 25 packages of tender for the development of PLTUs in Java and outside Java. Of the 25 packages, eight packages for Java and eight others for regions outside Java had been held.

For Sumatra, PLTUs of 2x600 MW will be built in Bangka Tengah district in the near future, 2x600 MW in the Bukit Asam and Musi Rawas districts (South Sumatra) and 2x600 MW in Riau province.

Wi-MAX of Indonesian Version to be Launched May 2008

Tuesday, 25 September, 2007 | 17:44 WIB

TEMPO Interactive, Jakarta: The government will launch the Indonesian version of the worldwide interoperability for microwave access (Wi-MAX) in May next year on the same day with National Awakening Day on May 28.

Information and Communication Minister, Muhammad Nuh, said that the Indonesian version of Wi-MAX technology is needed to lower the dependency on foreign technology.

Nuh said that more than half of the national telecommunication’s budget, reaching between Rp40 trillion and Rp50 trillion, is used for buying the imported technology product.

Thus, he said, now several universities and companies in the information technology sector in Indonesia are conducting research to complete creating the Wi-MAX.

“I forgot the names of the involved companies,” said Nuh. Yet, the universities that are involved include the Sepuluh Nopember Technology Institute, Bandung Institute of Technology, University of Indonesia, Gadjah Mada University and Hasanuddin University. Nuh did not remember the budget for the technology research either.

In the meantime, Director General of Post and Telecommunication at the Information and Communication Department, Basuki Yusuf Iskandar, said that the Indonesian version of Wi-MAX technology can be used in providing communication and information access service in rural areas or universal service obligation (USO).

Wi-MAX is a technology that makes it possible to provide wireless broadband communication access. This technology is adjusted with the Institute of Electrical and Electronics Engineers (IEEE) 802.16 standard.

Wi-MAX technology can be applied as the last mile connection in broadband network. In addition, Wi-MAX—which can reach a 50 kilometers radius—can be used for hotspots and cellular network backup.This electricity project is currently being carried out and is targeted to be completed in 2009 and 2010

Seven countries to invest in South Kalimantan

Banjarmasin, South Kalimantan (ANTARA News) - At least nine investors from seven countries have expressed readiness to invest US$7,247,000 in various sectors in South Kalimantan, local Regional Investment Coordinating Board (BKPMD) spokesman Thalib said here on Wednesday.

He pointed out the investors, expected to absorb at least 515 local workers, are from Malaysia, Singapore, South Korea, Australia, South Africa, the Netherlands, and Qatar.

Thalib said conducive security and political climate at home had made it possible for so many countries to invest in South Kalimantan province which is rich in its natural resources.

"Regional security situation at present is the most important factor for the foreign investors to invest in the province," Thalib said.

Of nine companies which had obtained foreign investment approvals (SP-PMA), six are active in mining and export businesses.

The six companies are PT Balangan Energy and Environ Mental Resources of Australia in Balangan district, PT Coal Trans Jaya of South Korea in Banjar Baru town, PT Gunung Harang Trading of Malaysia in Kotabaru district, PT Chindoz Berkat Mineral Technologies of Singapore in Tanah Laut district, PT IOL Indonesia of the Netherlands in Banjarbaru town, and PT Midline Mineral and Energy Resources of Qatar in Banjarbaru town.

Three other companies are PT Borneo Adventure Cruises of South Africa, PT Agro Harapan Lestari of Malaysia, and PT Illuva Mining Technology of Singapore.

New players may get to sell subsidized fuels

Ika Krismantari, The Jakarta Post, Jakarta

Downstream oil and gas regulator BPH Migas may allow Dutch-based oil giant Shell and Malaysia's Petronas to join state-owned oil and gas firm Pertamina in selling subsidized fuels.

BPH Migas representative Adhi Subagio Subono told The Jakarta Post on Tuesday that the designation of Shell and Petronas as subsidized fuel distributors, despite their lack of storage facilities, would benefit consumers as the increased competition would force Pertamina, currently the sole distributor of subsidized fuels, to provide better services and reduce prices.

"New players could establish joint storage facilities, or if Pertamina agreed, they could share Pertamina facilities to overcome their lack of space," Adhi said.

Pertamina still holds the exclusive right to distribute subsidized fuels, despite the partial liberalization of the country's retail fuel market in 2005.

The government has said that the exclusive right continued to be awarded to Pertamina as no other operators had been able to meet the requirements, such as having sufficient distribution networks and storage facilities.

As a result, the newcomers, including Shell and Petronas, have only been able to sell non-subsidized high-octane gasoline in Indonesia.

BPH Migas has not decided whether to hold a tender or to resort to the direct appointment mechanism to select the distributors of subsidized fuels for next year.

As a result, the appointment of distributors, which should have been announced in August, has been delayed.

A committee made up of BPH Migas, the Finance Ministry and the Energy and Mineral Resources Ministry is still discussing a number of contentious issues, which are reported to include policy changes so as to allow more players to become involved in the distribution of subsidized fuels.

Adhi said that the other mechanism being discussed involved a competitive tender under which the winners would be selected based on the price margin offered and the scope of their distribution areas.

Only those bidders that offered lower price margins and wider distribution areas would be allowed to sell the subsidized fuels, he added.

Pertamina marketing and trading director Ahmad Faisal said Tuesday that his company had sent a letter to BPH Migas to express its readiness to serve as the distributor of subsidized fuels next year.

Indonesia, with a population of some 220 million people, represents an attractive market for gas retailers as motor vehicles account for almost half of national fuel consumption, which currently stands at some 60 million kiloliters per year.

A number of oil giants, such as U.S.-based Chevron and French oil firm Total, have been lining up to enter the country's retail fuel market, but are still waiting for the government's latest decision on subsidized fuels, which account for 95 percent of Indonesia's fuel market.

Tangerang regency to build cargo port

The Jakarta Post

TANGERANG: The Tangerang administration says it will build a cargo port in Teluk Naga district to boost economic development in the regency.

Regent Ismet Iskandar said the National Development and Planning Board had responded positively to the plan.

"We are promoting this plan to some investors interested in being part of this project," Ismet said as quoted by news portal Tempointeraktif on Monday.

Ismet said the cargo port in Teluk Naga would cut the currently long distribution lines to and from Tangerang.

He said, for example, a shipment of cows from outside Java to Tangerang first had to go through Tanjung Priok Port in North Jakarta before being sent to Tangerang by land.

"If Teluk Naga has a proper port, commodities can be directly shipped to the port," Ismet said.

CNOOC Ltd. announces start-up of gas project in Indonesia

Tradingmarkets.com, Monday, September 24, 2007; Posted: 07:45 PM

BEIJING, Sept 25, 2007 (Xinhua via COMTEX) China National Offshore Oil Company Limited (CNOOC Limited) announced on Monday that the phase two of the Southeast Sumatra (SES) gas project has started production.

The contractual gas delivery rate of the phase two of the project would be 78.4 million cubic feet (approximately 2.22 million cubic meters) per day, but the company did not state the current daily output.

The project is located about 120 kilometers offshore West Java in Indonesia, with an average water depth of 30 meters.

The development facilities in phase two include a production and processing platform, a gas plant, a gas compression and processing platform and three sub-sea pipelines.

The natural gas produced will mainly be supplied to the power plant of the state utility company PT Perusahaan Listrik Negara (PLN).

Liu Jian, executive vice president of the CNOOC Ltd., said the successful start-up of SES phase two would not only boost CNOOC's overseas gas production, but also supply more clean energy to the local people.

CNOOC Ltd. holds 65.5 percent interest of Southeast Sumatra production sharing contract (PSC) and acts as the operator. The PSC partners include Japan's INPEX Sumatra, Ltd., KNOC Sumatra Ltd., Orchard Energy Sumatra BV, Fortuna Resources (Sunda) Ltd., Talisman UK (Southeast Sumatra) Ltd. and Talisman Resources (Bahamas) Ltd..

Indonesia`s Tuban Petro to invest US$400 mln for capacity expansion

Jakarta (ANTARA News/Asia Pulse) - Tuban Petrochemical Industry (Tuban Petro) plans to invest US$400 million to expand the capacity of the aromatic factory of its subsidiary PT Trans Pacific Petrochemical Indotama (TPPI) starting next year.

The expansion is needed to meet growing demand in the country for aromatic products especially paraxylene to feed purified terephthalic acid (PTA) industry, chief commissioner of Tuban Petro Amir Sambodo said Monday.

TPPI, which came on line in 2006, has operated at 120 per cent of its installed capacity of 500,000 tons of paraxylene.

M`sian company to build thermal power plant in Aceh

Banda Aceh (ANTARA News) - A Malaysian company is to build a thermal power plant in Aceh Besar district and several hydro power plants in a number of areas in Aceh under an accord signed here Tuesday.

A memorandum of understanding (MoU) on the Malaysia company`s intention was signed by Aceh Deputy Governor Muhammad Nazar and Moh. Zaini bin Abdullah, general manager of Malaysian private company SPM (System Protection and Maintenance) here Tuesday.

The power plants would be set up to meet energy needs in Aceh, especially for economic activities which are expected to bring about welfare for the people.

Zaini said his company would invest US$200 million in the establishment of the thermal power plants with a capacity of 2x200 megawatts, and 30-40 million Malaysian ringgit for the establishment of the hydropower plants with the capacity of 5-15 megawatts.

He said the thermal power plant in Aceh Besar was expected to be built within 30-36 months and the establishment of the hydropower plants in Gayo Lues district and two hydropower plants in Nagan Raya would be completed within 30 months.

"We hope the Aceh administration willd fully support the project so that they will be no difficulties in setting up the power plants," he said.

Meanwhile, Nazar said Aceh offered investment opportunities to any party including investors dealing with electricity which is badly needed by industries and infrastructure development in Aceh.

He said as the situation in Aceh is safe following the signing of MoU (between the Indonesian government and the now-defunct Free Aceh Movement in Helsinki), 18 investors were interested to sink their capital in the electricity sector but only three has signed MoUs.

"The three investors are Media Group which is setting up a thermal power plant in Nagan Raya, the Malaysian company and PT Bumi Power Energy, he said.

Currently, Aceh is in need of 220 megawatts of electricity while the Indonesian electricity company PLN is only able to supply 60 megawatts and in the next 10 years, the province would need 400 megawatts for daily activities.(

RI, Canada sign US$19 million project to improve social services

The Jakarta Post

JAKARTA (Antara): Canadian Ambassador to Indonesia John Holmes and Indonesian Minister of Home Affairs Mardiyanto on Tuesday signed an agreement on an important bilateral project worth C$19.4 million (US$19.3million) aimed at supporting the Indonesian government to improve the quality of decentralized social services in an equitable and gender sensitive manner.

"This six-year project represents a significant commitment on the part of Canada to continue its support for the Government of Indonesia in the implementation of decentralization and the strengthening of local governance institutions," Holmes said in a press statement.

The project called the Better Approaches to Service Provision through Increased Capacities in Sulawesi (BASICS) is funded by the Canadian International Development Agency (CIDA) and will be implemented in the Indonesian island of Sulawesi.

"The BASICS project is specifically designed to strengthen the capacities of local governments in planning and budgeting processes that lead to greater transparency and improved social service provision for citizens in the island," he said.

The new project is part of CIDA's current five-year country development programming framework for 2005 to 2009 which has a regional focus on Sulawesi.

CIDA's programming focuses on three priority sectors: improved local governance for enhanced public service delivery; growth of the small business sector to create jobs; and sustainable use of natural resources to generate income and improve livelihood for the rural poor.

Indonesia`s Indofood to spend US$933 mln to acquire Lonsum

Jakarta (ANTARA News/Asia Pulse) - The country's food giant PT Indofood Sukses Makmur (JSX:INDF) will spend Rp8.4 trillion (US$933 million) to acquire about a third of PT London Sumatra Plantations (Lonsum).

Indofood's subsidiaries PT Salim Ivomas Pratama and Indofood Agri Resources Ltd will pay Rp5.7 trillion for a 36.6 per cent stake from First Durango Singapore Pte Ltd and Ashmore Funds.

Santos launches production from Indonesian site

Jakarta (ANTARA News/Asia Pulse) - Australia's Santos Ltd says that first oil production from the Oyong project in Indonesia has started, with an investment decision for gas production from the operation expected before the end of the year.

The project, located offshore East Java in Indonesia, is expected to produce between 8,000 and 10,000 barrels of oil per day. A sales agreement has been signed with PT Indonesia Power and first gas production is expected in the first half of 2009.

Muladi consortium wins US$9.4 mln gas pipeline deal in Indonesia

Jakarta (ANTARA News/Asia Pulse) - State-owned electricity company PLN has declared the consortium of PT Muladi the winner of a tender to build a pipeline to transport gas from Muara Bekasi to its power plant in Muara Tawar.

The consortium, which also includes PT Wali Nusa and state-owned steel maker PT Krakatau Steel, would build the 7.2km pipeline at a price of Rp85 billion (US$9.4 million), PLN executive Tonny Agus M. said.

The gas is supplied from South Sumatra through a submarine pipeline owned by state-owned gas distributor PT PGN. Construction would take six months and by March 2008, the project is expected to be operational

Indonesia, HK near deal on ill-gotten funds : report

Hong Kong (ANTARA News) - Hong Kong and Jakarta are close to signing an agreement that would allow Indonesia to pursue misappropriated money that was stashed in bank accounts in Hong Kong, the South China Morning Post reported on Sunday.

The newspaper said Indonesia and Hong Kong will sign a mutual legal agreement (MLA) on criminal matters at a conference scheduled for November in Bali.

"There are many, many cases and we are waiting for the support of the MLA to pursue them," Yan Genmarengga of the Indonesian Attorney-General's Office, who is based in Hong Kong, was quoted in the newspaper as saying.

"We have some general cases involving hundreds of millions of (U.S.) dollars. The MLA will make it easier for Hong Kong and Indonesia to pursue the money," he was quoted as saying.

Yan could not be reached for comment on Sunday.

A spokesman for the Department of Justice in Hong Kong told Reuters, "the agreement is still in process", but did not give a timetable.

Indonesian President Susilo Bambang Yudhoyono has promised to clamp down on graft in a country that is regularly rated one of the world's most corrupt, and has been pursuing the recovery of illegally obtained funds.

The newspaper said a likely target would be an estimated US$800 million in funds in Hong Kong that were held by Hendra Rahardja, the late chief of now-defunct Bank Harapan Sentosa, who was convicted in 2002 and sentenced to life in a graft scandal involving the disbursement of an emergency loan by Indonesia's central bank.

Last week, the United Nations and the World Bank launched an initiative to make it easier for governments in developing countries to recover stolen assets stashed in overseas by corrupt leaders.

The World Bank estimates that the cross-border flow of global proceeds from criminal activities, corruption and tax evasion is between $1 trillion and $1.6 trillion.

New South Wales, Jakarta agree to promote economic relations

The Jakarta Post, Jakarta

The administrations of Jakarta and the state of New South Wales (NSW) in Australia are seeking to enhance their sister state-province relationship, with NSW sending a delegation of businesspeople to Indonesia this week.

"We hope our visit promotes the relationship between Jakarta and NSW, which have been sister cities since 1994," Vice Chairman of the Australia Indonesia Business Council (AIBC) John Murray told The Jakarta Post on Thursday.

Murray, who was speaker at the NSW Parliament between 1995 and 2003, said the delegation was interested in several projects, especially in the areas of water purification and cattle breeding.

Murray said that aside from holding discussions with Jakarta officials, the delegation also met with several Indonesian businesspeople. They were scheduled to visit Yogyakarta on Saturday to set up three water filter units in earthquake affected areas manufactured by the NSW-based Sky Juice Foundation.

David Hughes from Sky Juice Foundation, a non-profit organization aiming to provide low-cost pure water for children, said various parties had been consulted in relation to the project.

"We will set up the units in ... earthquake-afflicted areas, cooperating with the Sultan (Hamengku Buwono X), Australian Aid International and CHF International," he said.

He said the foundation also installed a water filter Wednesday in Jakarta's Kramat Jati area, which was badly hit by flooding in the capital in February.

"The water filter unit at Kramat Jati was established in cooperation with the Subud and Susila Dharma spiritual organizations, who provided the location so that the community could benefit from clean water," he said.

Hughes said his foundation sold water filtering equipment to other NGOs for installment in schools, hospitals, clinics and refugee camps. He said one unit, priced at around US$3,500, could provide clean water for up to 1,000 people per day.

He said Sky Juice had distributed over 300 units in cooperation with NGOs and government agencies worldwide, including in East Timor, India, Indonesia, Kenya, Nepal, Oman, Pakistan, Sri Lanka and Thailand,.

The organization set up 300 water filters in Sri Lanka and one in Aceh after the 2004 tsunami, Hughes said.

"Sri Lanka got more units because it has better NGOs. We are looking for partnerships with Indonesian NGOs to provide portable water to communities here," he said.

AIBC delegation member Welly Salim from Oceanic Cattle Stations said his company provided Indonesian markets with Brahman Cross and Droughtmaster cattle.

Salim, an Indonesian who gained Australian citizenship in 1978, said his company would ship 16-month old cattle to Indonesia for fattening in three months.

"Our cattle shipments reached 860,000 (head of cattle) in the first eight months of 2007, indicating a 20 percent increase from the same period last year," he said.

Advisor to the Jakarta Investment Board, Budihardjo Sukmadi, said the Jakarta administration would send a delegation to NSW in October.

He said during the visit, the Jakarta delegation would discuss several projects, including a $3 billion sewerage project.

"The sewerage project will help improve city planning and ground water quality," he said, adding that the project required a seven-year investment period and a 30-year concession period.

Leading players to join oil and gas auction in October

Ika Krismantari, The Jakarta Post, Jakarta

A number of oil and gas giants including U.S.-based Chevron, Exxon and ConocoPhillips, France-based Total and British-based Shell and BP, are set to submit their bids in the government's next tender for oil and gas exploration projects in the country, an official says.

Even though the auction will likely be opened in October, R. Priyono, the energy ministry's director for the upstream oil and gas industry, said Friday the big companies had submitted initial proposals, showing their interest in particular blocks located in the deep seas of eastern Indonesia.

Priyono said the most sought after block was the Semai block offshore Papua, which had attracted several major oil companies such as Chevron, Exxon, BP and Shell.

It is reported the block has a total potential reserve of 1 billion barrels of oil equivalent.

Aside from placing bids under a regular tender mechanism, the companies will also offer bids through a direct-offer mechanism.

Under such a mechanism, companies will first identify the blocks they wish to develop and then the government will advertise it to see if there are any rival bids.

Of the total 25 oil and gas blocks to be put on the table, 11 blocks will be offered through a regular tender while the remaining 14 will be under a direct-offer mechanism.

The companies that will go with the direct-offer mechanism include Total, U.S.-based Hess and China's CNOOC, which are eyeing blocks in the eastern part of Indonesia.

Energy and Mineral Resources Minister Purnomo Yusgiantoro has said the government would consider providing a better production split to encourage more investors to take part in the tender, realizing that many of the blocks are located in remote areas.

The proposed production-sharing scheme would allow investors to gain as much as 50 percent of the total revenue, he said.

Scheduled to be opened in August, the tender was delayed until October, pending a discussion on the cost recovery system used in the country's oil and gas industry, Priyono said.

"We hope there will be results in October, after which we will open the tender as soon as possible," Priyono said.

He said by October the government was expected to be able to issue clearer arrangements on cost recovery assessment, in which costs unrelated to petroleum operations could not be recovered.

"Items such as personal expenses, which are not related to exploration activities, will not be reimbursed by the government," Priyono said. "To make things clearer, we will change the form from positive lists to negative lists, instead of listing the things that are recoverable. Under the new regulation, we will submit the things that can not be recovered."

He said the new regulation would also apply to existing contracts with the government, which would first discuss the new arrangements with oil and gas operators and explain how they will change the cost recovery assessment stated in their contracts.

Energy analysts have urged the government to issue clear-cut rules to ensure the cost recovery system used in the country's oil and gas industry does not cause losses to the state. The analysts have called the existing system vague, saying it has too many gray areas that enable operators to not only recoup all of their exploration and production expenses, but also markup their spending in order to receive bigger reimbursements.

Mideast investment in Indonesia meagre: ex-envoy

The Peninsula, 9/22/2007 0:17:28

Abdul Wahid Maktub

DOHA: Investment from the GCC and the rest of the Middle East in Indonesia, which is the world's most populous Muslim country, is quite low, rues a former Indonesian ambassador to Qatar.

Abdul Wahid Maktub, who left Doha early this year having served as Jakarta's envoy for a little more than three years, was here on a brief private visit.

He told this newspaper in a brief interview late last week: "There are misperceptions in the Middle East about the safety of investments back in our country. The misgivings need to be removed."

Having recovered from the financial crisis of the late 1990s, Indonesia is making rapid economic strides. The economic growth rate has been 6.5 per cent and expected to shortly climb to seven per cent.

Maktub, who is practising as a legal consultant in the Indonesian capital-Jakarta now, said that he was on a visit to the region to attract investments back home, especially in the booming real estate market. "I have been to Saudi Arabia and now I am here," he said.

One of the biggest achievements to his credit has been that Dubai's real estate giant, Emaar, has agreed to make an initial investment of $800m in a massive city project in Lombok island, which is close to Bali. "Emaar has recently set up an office in Jakarta," said Maktub.

Here, he said he met Sheikh Faisal bin Qassem Al Thani, Chairman of the Qatari Businessmen's Association, and urged him to pay a visit to Indonesia to explore avenues of investment. "He has accepted the invitation," said the former envoy.

"When I had met Emaar's chief, I had only requested him to visit Indonesia. When he visited Lombok, the first thing he did was pray and immediately after that he told me that he was going to develop a city on this virgin and breathtakingly beautiful island," said Maktub.

Saudi Arabia's Bin Laden Group, he said, has given sub-contract for a 60-storey building it is developing in Dubai, to an Indonesian construction company and is quite happy with its work.

A lot of western countries are investing in real estate projects in Indonesia, but a disappointing thing is that the investment inflow from the Gulf and the rest of the Middle East is nil or negligible. It is because businessmen here have misperceptions about the country. There is so much idle money here and a lot of business and investment opportunities in Indonesia.

"Ours is a huge country. It takes eight hours to fly from the easternmost point to the west. You can, thus, imagine how big the country is, and so are the possibilities of doing business and making investments," said Maktub.

"We are adopting a practical strategy. We want businessmen here to simply visit Indonesia and the rest would automatically follow."

Also with Maktub was Gunawa Witjaksono, one of the top real estate developers of Indonesia.

Mandala to buy four new Airbus planes

Surabaya, E Java (ANTARA News) - Mandala Airlines will buy four new A-319 and A-320 planes until late this year to replace its Boeing planes that are still operational, the company`s commercial director said.

An A-319 plane with a capacity of 144 seats was delivered by its maker in Hamburg, Germany, to Mandala on Sept 19, Iranda Susilo said during the launch of New Mandala - Lowfarexperience here on Friday.

Mandala was expected to operate the A-319 plane starting Oct 1, he said.

Mandala, which is 51 percent owned by Cardig International and 49 percent by Indigo Partners is the first Indonesian airline company to be operating an A-320 plane.

The airline company is putting an order for 25 Airbus 320 Family planes priced at US$60-70 million each to modernize its fleet as well as to increase its domestic routes to 20.

Posco begins feasibility study on East Kalimantan rail project

The Jakarta Post, Jakarta

A business consortium led by South Korean conglomerate Posco Engineering and Construction Ltd. has begun a feasibility study on the construction of a 350-km railway in East Kalimantan.

The railway, which will be specially designed for the transportation of coal in the province, will require an investment of about Rp 22 trillion (about US$2 billion), Antara reported Wednesday.

Other consortium members are Kenertec Co. Ltd., also of South Korea, and two local firms, PT Nuansa Cipta Coal Investment (NCCI) and PT Kereta Api Indonesia (KAI).

"We are optimistic that the project will prove to be feasible. We only have to wait for the feasibility study results, which will come through in October," representative director of Kenertec, Guang Yil Hong, told reporters after a meeting with the East Kalimantan administration Tuesday.

Guang said that the rail line would be 350 km in length and link East Kalimantan with Central Kalimantan.

Head of accident prevention at KAI, Budi Noviantoro, said that coal had been transported to date in East Kalimantan by barge to Balikpapan.

He said that the rail line would be able to carry 18.5 million tons of coal per year.

He said that according to a 2006 report by Nippon Koe and Marubeni, the Mahakam route was the preferred one as it passed through areas with the biggest reserves of coal in Kalimantan.

"Construction will start from Balikpapan through Kalipapak, Central Kalimantan, and end in Muara Tuhuk, which is projected to become a coal terminal," he said.

NCCI director Makbul Sujudi said that if the project turned out to be feasible, the consortium would start construction work in 2009, with completion expected within three or four years.

PT Freeport asked to set up smelting, refining venture in Papua

The Jakarta Post

JAYAPURA (Antara): Papua's Provincial Legislative Council has asked giant copper and gold mining company PT Freeport Indonesia to set up a venture locally to handle the smelting and refining of waste products from its mining operations in the Tembagapura area in Mimika district, a spokesman said.

"Such a smelting company is very important for a less-developed province like Papua as it can create more jobs and improve the local people's welfare," Jan Ayomi, a commission’s chairman at the council said Friday.

By opening a venture, PT Freeport Indonesia – a subsidiary to giant gold and copper mining and exploration company Freeport McMoran -- would be able to utilize its waste products to make feedstock for cement industries, he said.

It would not only contribute to the country's foreign exchange earnings by exporting its products but also create many job opportunities for the local population, Ayomi said.

A similar smelting company already existed in Gresik, East Java, he added.

The idea of asking PT Freeport Indonesia to open a company smelting and refining mining wastes from its Tembagapura mining operations emerged after some members of the council visited PT Smelting in Gresik recently.

Papua's council had also urged PT Freeport Indonesia to revise its work contract and move its Indonesian head office (from Jakarta) to Jayapura, the Papua's provincial capital.

PT Freeport Indonesia operates in two segments: mining and exploration as well as smelting and refining.

A Wright report said the company's mining and exploration segment includes copper and gold mining operations located in the highlands of the Sudirman Mountain Range in Papua or formerly known as Irian Jaya.

The smelting and refining segment includes Atlantic Copper's operations in Spain and PT Freeport Indonesia's equity investment in PT Smelting in Gresik.

The group smelts and refines copper concentrates in Spain and markets the refined copper products, through its wholly owned subsidiary, Atlantic Copper SA.

Japan to provide assistance for RI`s Maritime Security Agency

Jakarta (ANTARA News) - Japan is to donate three patrol boats and US$300 million to Indonesia`s Maritime Security Coordination Agency (Bakorkamla) in support of efforts to maintain security in Indonesia`s maritime territory, the agency`s chief said.

"In addition to the three patrol boats, Japan is also to provide a US$300 million grant for the development and improvement of Bakorkamla," the agency`s chief, Vice Admiral Djoko Sumaryono said on Wednesday after the signing of a maritime security cooperation agreement between Bakorkamla and the North Sulawesi provincial administration.

He said many countries, including Japan and Germany, were prepared to help Bakorkamla in capacity building.

"Although Bakorkamla is not yet functioning as a `coast guard`, other countries are keenly interested in the agency`s existence. They know about us and are committed to assisting us," Djoko said.

Asked about the realization of the Japanese assistance, Djoko said it would be handed over to the Indonesian government in December 2007 while the grant of US$300 million had also been reported to the National Development Planning Board (Bappenas).

Commenting on a report that Japan had cancelled a plan to give 142 patrol boats to Bakorkamla because the agency had yet to operate as a coast guard, Djoko said the report was not true.

"We are going to reconfirm the suspension, but in reality the Japanese government has agreed to give three patrol boats and US$300 million fund to Bakorkamla," Djoko said.

He said that besides Japan, Germany was also ready to help in anti terror training program and the report of maritime danger to Bakorkamla personnel.

"The assistance in anti terror training program will be given by Germany`s antiterror special force SG-9, in addition to providing Bakorkamla with multi-purpose boats," Djoko said.

He added Indonesia was currrently making efforts to have the German assistance plan realized in the near future.

Israeli money likely to see biofuel production in Kupang

Yemris Fointuna, The Jakarta Post, Kupang

Despite strong opposition from circles in Jakarta, Israeli money is set to pour into East Nusa Tenggara after Kupang's administration this week gave the green investment light to the Israeli-based international project development company Merhav Group.

Kupang Regent Ibrahim Agustinus Medah said Tuesday he had discussed the US$700-million business committment with various parties and he had been assured the business venture "had nothing to do with diplomatic relations between two countries".

"Like Taiwan, for example ... it has no diplomatic relations with Indonesia, but its investments are nearly everywhere (in Indonesia)," Medah said.

Medah said he had been told the Israeli company would not operate directly in the field, but would be represented through a company based in Uzbekistan.

The Merhav Group of companies operates on a global scale and through various subsidies is traded on NASDAQ and owns 51 percent of Israel's second largest commercial television station.

"The Kupang regental administration will provide facilities and give principal license to PT Manhattan Capital, a local broker which will cooperate with the Uzbekistan's firm," Medah said.

"But the Kupang regental administration will still ask for permission from the central government (if) it can ahead with the plan."

Medah said Merhav Group would develop jatropha nut plantations for biofuel production. Jatropha oil is extracted from the plant's seeds as a vegetable oil and involves just one stage to convert to biodiesel.

The Israeli group would also develop ornamental plants for export.

The last meeting held between Medah and Merhav Group executive Gideon Weinstein and directors Jacgues Eshel and Yosef Ziv Sudiro was to discuss details of the investment plans.

The two parties agreed to set up a team to manage a feasibility study in five districts for the jatropha plantation.

Medah said the group wanted to develop jatropha plantations on 50,000 hectares in the districts of East, West and South Amarasi, Amarasi and Sulamu, with an initial investment commitment of US$350 million.

If the first stage is successful, the plantations would be expanded to cover 100,000 hectares, with a total investment commitment of $700 million.

Indonesian government awards Rp3.2 trln toll road project to Bakrie

Jakarta (ANTARA News) - Indonesian conglomerate PT Bakrie & Brothers said Tuesday the government has named its consortium the winner in the tender to build a 25-kilometer toll road in east Jakarta at an estimated cost of 3.2 trillion rupiah.

The Bakrie consortium beat the other contender for the project, namely the Thiess-Waskita consortium, Bakrie president Bobby Gafur Umar told Thomson Financial.

He said the Bakrie consortium also includes Global Financindo and Malaysian toll road operator Projek Lebuhraya Utara Selatan Bhd (PLUS), a unit of Khazanah Nasional Bhd, the investment arm of Malaysia's ministry of finance.

Gafur said construction of the project will start in the third quarter 2008 and is targeted to be completed in 2010.

The consortium will be granted a concession period of 35 years during which it will generate revenue from the toll road.

Existing Indonesian law stipulates that toll road fares should be raised every two years. The last hike was just implemented two weeks ago.

Bank Mega to lend Rp 1.3 trillion for infrastructure projects

The Jakarta Post

JAKARTA (Antara): Publicly-listed Bank Mega plans to earmark a syndicated loan worth at least Rp 1.3 trillion (US$145 million) for power plant and toll road development in Indonesia, a spokesman said.

"A syndicated loan of Rp 1 trillion will be set aside for power plant development in East Kalimantan and the rest for turnpike development projects in Jakarta, Bogor, Depok, Tangerang and Bekasi," Bank Mega director for credit affairs Daniel Budirahaju said Monday.

"We hope the syndicated loan can be disbursed late this year," he said.

Daniel said Bank Mega also planned to channel Rp 3 trillion to the small and medium entrepreneur sector until late this year.

The bank had set a target of disbursing credits of Rp 17.6 trillion this year, he said.

Truba, Mitsubishi agree to form consortium to build Muara Karang power plant

The Jakarta Post

JAKARTA (Antara): PT Truba Jaya Engineering and Mitsubishi Heavy Industries Ltd. signed an agreement in Japan over the weekend to form a consortium to build a combined cycle power plant (PLTGU) to replace three units of thermal power plants (PLTU) in Muara Karang, North Jakarta.

"We signed the agreement on Sept 13," Arifin Wiguna, president director of PT Truba Manunggal, the holding company of PT Truba Jaya Engineering, said Monday.

The agreement was a follow up to a contract signed by Mitsubishi Heavy Industries Ltd and state electricity company PLN in July 2007.

The project aims to replace three units of the PLTUwhich had a capacity of 300 megawatts with PLTGU which would have a capacity of 700 megawatts.

The three PLTU units had been operational for more than 30 years.

Poland intends to engage in coal mining sector in Sumatera

Jakarta (ANTARA News) - Polish FAMUR International Trade S.A. firm, has intended to invest US$50 million in a coal mining project in Air Laya area in Bukit Asam district in South Sumatra, Indonesian Ambassador for Poland Hazairin Pohan has said.

Indonesian and Polish officials including FAMUR International Trade S.A. president Rafal Rost had already discussed the plan which was held on the sidelines of SIMEX mining equipment and metallurgy international exhibition in Katowice last week, Pohan said in a statement made available to ANTARA here Monday.

SIMEX Fair 2007 which was participated in by 100 mining equipment producers from German, Britain, Italy, Russia and Poland was one of the Europe`s largest mining industrial expo.

The Air Laya coal mining project was an open pit but now began to be turned into an underground mine where miners had dug the earth down to 100 meters.

Pohan was quoted as saying high calorie coal could expectedly be found 150 meter below the soil.

FAMUR S.A. has so far engaged in Barito Line project in Central Kalimantan where the Polish firm has invested $1 billion to build a new railway system, replacing the 150-year old one.

FAMUR has been preparing a program to develop nickel and copper processing firms in many places in Indonesia. Therefore, FAMUR as well as the Polish and the Indonesian governments had been had been discussing the program to implement the project which would need an investment value amounting to $50 million.

Pohan has encouraged FAMUR to participate in a development project of a 90-km long railway which would connect economic centers to Tanjung Api Api port in South Sumatra.

?If the $350 million worth of railway project is agreed by the Polish government, South Sumatra administration will have a big chance to build an inner seaport in the future,? Pohan was quoted as saying.

Another Polish firm, KOPEX S.A. has also intended to engage in a coal mine project in South Kalimantan.

PLN to turn more to gas, coal next year

Ika Krismantari, The Jakarta Post, Jakarta

State-owned electricity firm PT PLN plans to cut the 2008 consumption of oil-based fuels by its power plants by 22 percent to seven million kiloliters (kl), down from this year's estimate of 9 million kl, as part of its efforts to switch to gas and coal.

President commissioner Alhilal Hamdi told The Jakarta Post recently that the firm hoped to cut its oil consumption as a number of new coal and gas-fired power plants came on line from the start of next year.

This year alone, the company has targeted to cut its fuel costs by Rp 9 trillion (US$957 million) to Rp 42 trillion from last year's Rp 51 trillion with the opening of three new coal and gas-fired power plants.

"We will also cut fuel expenditure by starting to switch to marine fuel oil, which is cheaper to replace than the high speed diesel (HSD) we used to use," PLN president director Eddie Widiono said.

Currently, 24 percent of PLN's power plants are fired by oil-based fuels.

The switch to other alternative fuels is expected to boost the company's profits this year.

PLN has been in the red for the past eight years.

"That's why we have partially switched from oil to coal, which is much cheaper," Alhilal said, adding that PLN's coal purchases would increase to Rp 8 trillion this year from Rp 6.4 trillion last year.

If the trend continues, lower production costs mean PLN is expected to post a Rp 3.8 trillion (US$422 million) net profit this year, Alhilal said.

The company's losses dropped by 58 percent in the fist six months of this year to Rp 967 billion (US$100 million) in the first half of this year, down from Rp 2.26 trillion in the same period last year.

The operation of new coal-fired power plants helped PLN to considerably reduce its losses to Rp 1.08 trillion in 2006, down from Rp 4.92 trillion in 2005.

Under the so-called "crash program", PLN plans to build a number of coal-fired power plants to provide an additional power supply of 10,000 megawatts by the end of 2009.

The operation of more coal-fired power plants is expected to further cut the company's operation costs in coming years.

George Soros to invest in oil palm sector in Aceh

JAKARTA (Jakarta Post): One of the world's best-known fund managers, George Soros, plans to invest in the oil palm plantation sector in the country's westernmost province, Nanggroe Aceh Darussalam, its governor,Irwandi Yusuf, said Thursday after meeting with Soros in New York recently.

"He said that he was interested in developing an oil palm plantation of about 20,000 hectares during the first stage. This kind of investment could feed around 2,500 families in Aceh," Irwandi said as reported Thursday by Antara.

The governor could not put a precise figure on the investment, or the likely timeframe. However, he promised that his administration would work hard to help Soros realize the plan.

"Both sides will immediately get to work on ensuring that this investment plan is realized," Irwandi said.

Soros is best known for his famous bet against sterling as Britain was forced to pull its currency out of the European currency grid in 1992. This eventually earned Soros an estimated US$1.1 billion.(Andi Haswidi)