Dubai companies to invest in South Sumatra`s energy sector

Antara News, Saturday, October 23, 2010 16:08 WIB

London (ANTARA News) - Two Dubai companies, Salam Investments and Mas ClearSight Investment Bank, plan to invest in the energy sector in South Sumatra, an Indonesian official said.

"The two companies from Dubai are interested in investing in coal mining and power generation and prepared to sink about 0.5 billion US dollars in eventual projects ," Mansyur Pangeran, Indonesian consul general in Dubai, told ANTARA here on Saturday.

Pangeran said he had accompanied Abdelhakim Mosleh of Salam Investments and Senior Vice President of Mas Clear Sight Investment Bank, Mujitaba Sarfaraz, on a business mission to the capital city of South Sumatra province, Palembang , recently.

In Palembang, they met with the head of the province`s regional coordinating agency for investment (BKPMD) as well as with officials representing coal mining and power plant sectors. The two Dubai businessmen got comprehensive information on those sectors, including aspects related to permit issuance, locations for coal mining and power plant and the supporting infrastructures.

Pangeran said after the visit to Palembang they also met with officials of the central investment coordinating agency (BKPM) and Indonesia power company PT PLN in Jakarta for further talks on their plan to invest in South Sumatra.

In accordance with the regulation for foreign investments, Pangeran added, the two Dubai businessmen sought data on Indonesian companies, state-owned or provincial government-owned companies, that will be made partners in the investments.

The business visit of the two Dubai businessmen to South Sumatra province was facilitated by the Indonesian consulate general in Dubai, Ministry of Foreign Affairs and South Sumatra provincial government (Pemprov Sumsel).

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Ras Al Khaimah Plans $5 Billion Indonesia Venture

Ras Al Khaimah Plans $5 Billion Indonesia Venture

Jakarta Globe, Bambang Djanuarto | October 19, 2010

The Argo Gajayana passing through Malang in East Java. Ras Al Khaimah, one of the sheikhdoms of the United Arab Emirates, and Trimex Group plan to invest $5 billion in Indonesian construction projects, including a 130 kilometer railway on Kalimantan. (JG Photo/Afriadi Hikmal)

Jakarta. Ras Al Khaimah, one of the sheikhdoms of the United Arab Emirates, plans to invest $5 billion in Indonesian construction projects as part of a joint venture with Trimex Group.

MEC Holdings, the venture overseeing all of Ras Al Khaimah and Dubai-based Trimex’s Indonesian projects, will spend $1 billion to build 130 kilometers (81 miles) of railway on Indonesia’s part of Borneo island, executive vice chairman Madhu Koneru said on Tuesday. The link will be able to transport as much as 64 million metric tons of coal a year, he said.

“Construction will start in 2012 and we expect to complete the project in 2014,” Koneru said in an interview in Jakarta after meeting Alwi Shihab, Indonesia’s special envoy to the Middle East.

Indonesia, Southeast Asia’s largest economy, is trying to attract investment in infrastructure as President Susilo Bambang Yudhoyono seeks to deliver average growth of 6.6 percent over the remainder of his second and final term ending in 2014.

MEC Holdings will also invest $500 million to develop a coal mine in Muara Wahau, East Kalimantan province, and build a port with an annual capacity up to 34 million tons, Koneru said.

The venture will team up with National Aluminum Co. to build a 500,000-ton aluminum smelter and power plant in East Kalimantan, according to Koneru. That investment may total as much as $3.5 billion, he said.

Bloomberg

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UAE Firms Launch $5b Projects in Indonesia

Lombok Resort Still on Track: Emaar

Govt gives Emaar the boot, looks for new funds

Lombok Resort Still on Track: Emaar

Jakarta Globe, July 26, 2010

Jakarta. Dubai-based property developer Emaar Properties has again been forced to deny it has pulled out of a $600 million resort project on the island of Lombok, which has been idle for years.

The property developer said it had “responded on time and with total commitment to the proposals of [joint developer] the Bali Tourism Development Corporation for the project.”

The statement came in response to comments from the Indonesian government, published by the local media last week, which said that officials were to retender the project after Emaar pulled out.

Emaar said it had provided recommendations on how it intended to proceed with the development, adding: “Emaar has strong financial fundamentals and will undertake all strategic projects across its key markets.” Emaar did not disclose the current status of the project.

Last week, the head of the Indonesian Investment Coordinating Board, Gita Wirjawan, said potential investors from Abu Dhabi, Qatar, the United Arab Emirates and India had expressed interest and could be ready to replace Emaar.

This is not the first time that Emaar has denied pulling out of the project.

In March, the Jakarta Globe reported that Emaar said it was still planning to proceed and was awaiting a response from an expression of interest it had submitted to the Bali tourism authority.

The comment in March was made after the Indonesian ambassador to the United Arab Emirates, Mohammad Supriyadi, said that Emaar had abandoned the project.

MEC Eyes Expanded Kalimantan Coal-Rail Project

Jakarta Globe, Reuters & Irvan Tisnabudi, April 15, 2010

MEC Holdings said on Thursday it is interested in expanding its planned railway project in East Kalimantan and wants to find more domestic buyers for its coal.

Based in the United Arab Emirates, MEC plans to invest $5.2 billion in infrastructure, including a smelter, railway and power plant, to support its coal mine.

MEC executive vice chairman Madhu Koneru said there was potential to expand the planned 130 kilometer railway, perhaps to 1,000 km.

“We are focusing on the [current] railway project, and that is long-time construction,” Koneru said, speaking on the sidelines of an infrastructure conference in Jakarta. “Technically, yes, there is potential [to extend the railway]. Commercially, yes, there is potential. We have planned for expanding the railway if it makes logical sense going forward.”

MEC has a license for a 5,000-hectare coal mine in East Kalimantan and has already finished exploration, Koneru said. The mine has nearly 2 billion tons of reserves and about 30 percent of production will go to the domestic market. The rest will be exported to India and China. Koneru said production would start about six to eight months before the railway begins operating.

The main customer for the domestic coal supply will be the planned joint-venture power plant between MEC and Indian state aluminum maker NALCO, which will supply power to their joint-venture alumina smelter, both near the coal mine. The power plant will cost $1.2 billion, with a capacity of 1,400 megawatts.

MEC’s mine is in an undeveloped part of East Kalimantan, with no road or river connections to a port. It will transport its coal by rail.

The $1 billion railway will have a capacity of 70 million tons a year of coal and will connect MEC’s mine to the coastal port in Bengalon, for export of the coal and import of other raw materials, Koneru said. MEC expects the railway to be operational and ready to deliver coal in 2011.

MEC, along with NALCO, also plans to invest $2 billion in the aluminum smelter, producing 500,000 tons a year, according to Mashael Al Naimi, MEC’s head of corporate communications.

NALCO will own 76 percent stake in smelter and MEC will hold the remaining.

Noeleen Heyzer, executive secretary of the UN’s Economic and Social Commission for Asia and the Pacific, said a public-private partnership (PPP) was the key to achieving MEC’s East Kalimantan project.

“PPP is key because the government can’t do it alone, and MEC certainly can’t do it either, so both parties need to cooperate for the good of the people,” she said.

Dubai Group Ready to Start $1b Rail Project in Indonesia

Jakarta Globe, Dion Bisara, March 25, 2010

Vice President Boediono calling for more private-sector investment in infrastructure in Jakarta on Thursday. (JG Photo/Yudhi Sukma Wijaya)

MEC Holdings, a subsidiary of the Dubai-based Trimex Group, said on Thursday that it had completed acquiring land for its $1 billion railway project in East Kalimantan and is ready to begin construction in the first half of this year.

The 130-kilometer railway is part of MEC’s plan to invest a total of $5.2 billion in the province, including in a coal terminal, an aluminum smelter and a power plant.

The projects will be developed by a joint venture with the Ras Al Khaimah Investment Authority and India’s largest aluminum producer, National Aluminium, MEC said in December.

The railway project will be run and operated by MEC Infra, a joint venture between MEC and Ras Al Khaimah. MEC Infra has obtained Indonesia’s first private railway license to develop a 130km integrated freight corridor from a mine site in Muara Wahau to a port in Bengalon, East Kalimantan.

Mashael Al Naimi, head of corporate communications at MEC, said in an e-mail to the Jakarta Globe that the major land acquisitions had been completed, with construction planned to start by the end of the first half.

MEC has said it expects the first commission of a cargo train in 2011.

Although many foreign developers have complained about the complex land-acquisition process and the frequent difficulties with local villagers, Madhu Koneru, the chief executive of MEC Holdings, said he did not find these traditional hurdles so severe.

“We were dealing with many stakeholders such as ministries in Jakarta, politicians, regional governments and villagers. The biggest concern they talked about was villagers who will not give up their land,” Koneru said.

He was speaking during The Economist’s Indonesia Summit in Jakarta on Thursday, which was attended by hundreds of prominent local and foreign business executives.

“But the truth is villagers are the easiest people to talk to. If you go to them and tell them that your plan will create jobs, they will give you their land,” he said, adding that government also proved especially cooperative in drafting the right policies.

Gita Wirjawan, the chairman of the Investment Coordinating Board (BKPM), said MEC’s experience demonstrated that the usual roadblocks deterring many foreign investors from investing in Indonesia have been reduced.

“Their ability to clear most of the land for the 130km corridor in just a few months goes against the traditional perception that land clearance is nearly impossible to do in Indonesia,” Gita said.

Foreign investors have long complained of the difficulties they face in acquiring and clearing land for large infrastructure projects. Part of the problem is that land owners tend to demand excessive prices for their property once they know that a major developer is interested.

UAE Firms Launch $5b Projects in Indonesia

Khaleej Times, Issac John,15 February 2010

DUBAI — MEC Holdings, part of the Dubai-based Trimex Group, said on Sunday that it has begun work on six major projects in Indonesia involving a total investment of $5 billion in partnership with the Government of Ras Al Khaimah.

The projects — a coal mine, railway, an aluminum smelter, a fertilizer plant, a port terminal and a power plant — are making significant headway, and the flagship $1 billion rail project is on track for commissioning in 2012, said Madhu Koneru, MEC’s Executive Vice-Chairman.

MEC Coal and MEC Infra — two special purpose vehicles set up as a joint venture between the Ras Al Khaimah Investment Authority (Rakia) and MEC Holdings —are spearheading the projects in partnership with India’s National Aluminum Co (Nalco) and Infrastructure Leasing & Financial Service Group (IL&FS), he said.

MEC Coal is developing the coalmine, which has an estimated two billion metric tonnes in coal reserves, while MEC Infra undertakes the 130-kilometer rail project.

Work on the rail track, the first private railway in Indonesia, will begin next month. The rail will link the Muara Wahau coal mine in East Kalimantan’s East Kutai district with the coast, where MEC Holdings is investing $250 million on a new port capable of handling cape-size vessels. “Land acquisition of 250 hectares for the terminal has already been completed. The port will be the region’s first fully integrated facility to load vessels using an automated conveying system,” said Koneru.

Koneru said the mine and railway would be central to a complex of facilities that includes a power plant fuelled by coal, an aluminium smelter, a fertilizer plant and a high capacity port terminal with a total integrated investment valued at $5 billion.

MEC is partnering with global railway and transportation services leader, CANAC for railway and port operations and maintenance.

With equity partner Nalco, an Indian government entity and Asia’s largest integrated aluminium complex, MEC will invest $2 billion in the greenfield aluminium smelter with capacity of 500,000 tonnes per annum. The smelter will depend on bauxite import from India. A further $2 billion investment will build a 1,250 MW coal-fired power plant and other auxiliary facilities for the smelter. Both projects are scheduled for competion in 2013.

ITNL, a subsidiary of IL &FS Group, is providing MEC financing to build the transportation infrastructure, railway network and deep-sea port, said Koneru.

“The land acquisition for all the projects is almost complete and the project is on schedule. In the next five years, MEC’s investments alone will create 5,000 new jobs in East Kalimantan,” said Koneru.

Initially, MEC is looking at a coal production of two million tonnes starting this year from its 12,000-hectare coal concession in East Kutai. Production from this site is expected to reach 32 million metric tonnes annually by 2019.

MEC Holdings’ parent company Trimex Group is a global minerals and metals conglomerate.

issacjohn@khaleejtimes.com

Govt gives Emaar the boot, looks for new funds

Andi Haswidi , The Jakarta Post | Wed, 01/27/2010 3:37 PM

The government has decided to terminate all commitments with Dubai-based Emaar Properties on a plan to build a US$600 million mega-tourism project in Lombok, West Nusa Tenggara.

Investment Coordinating Board (BKPM) chairman Gita Wirjawan said Tuesday that Emaar had failed to meet its share of the bargain in developing the project.

Gita said the government, represented by the West Nusa Tenggara government, had followed through with its commitments, including building an airport - to be completed in June - a 31-kilometer road connecting Mataram to the airport and an 18-kilometer road from the airport to Kuta Beach.

"*Emaar* failed to reciprocate in kind. We have taken this decision to ensure fairness and we will look for other possibilities," Gita said.

The mega-tourism project has been marked by finger-pointing since Emaar signed a joint venture agreement with the Bali Tourism Development Corporation (BTDC) in March 2008. The agreement included establishing a joint venture company called Emaar Lombok.

Emaar claimed last year that the Indonesian government had failed to follow through with some of its promises, citing in particular the clearance of a 1,200-hectare area of land required for construction.

In October, Alwi Shihab, Indonesia's special envoy to the Middle East, who also worked extensively on the project, said the land dispute was solved and that the project would follow through.

Further development showed that around 1,000 hectares had been set aside by the government for the project but still required certification from the National Land Agency (BPN), while the remainder still belonged to local residents.

A disagreement surrounding the company's investment contributions and ownership in the joint venture has also overshadowed the project.

State SOE Minister Mustafa Abubakar said earlier this month the deal with Emaar had expired, but the company would be given a chance to sign a new deal.

Both parties had agreed to a Dec. 31 deadline to solve the numerous problems plaguing the project. Mustafa said the deadline would not be extended but said he was willing to have fresh talks with Emaar about restarting the much-delayed project.

Gita hinted that the decision to kick Emaar out of Lombok was also in the interest of the property company as it was currently struggling from the impact of the financial crisis.

"Dubai World has been heavily affected by the financial crisis. They have to restructure $59 billion in debt. This will have repercussions on Emaar, which is based in Dubai.

"The company also embarked on massive projects in Saudi Arabia and the United Arab Emirates. There are a financial limitation. Secondly, they prefer to focus on settling their problems in the Middle East," Gita said.

No Emaar official was available for comment Tuesday.

Gita said his office had been in talks with investors interested in replacing Emaar.

"We have met with interested investors. One from the Middle East and another from outside the region," he said, refusing to elaborate further.

West Nusa Tenggara province, located just east of Bali, has become the central focus of the ministry's tourism programs, with a specific program aiming to draw one million tourists to the province by 2012.

The province is rich in marine life and will be developed as the center for the pearl trade and ecotourism. Famous Lombok tourist sites include Senggigi Beach, the three Gili islands, Mt. Rinjani and Lake Segara Anak.

Tourist spots in the more secluded Sumbawa Island include Mt. Tambora, Moyo Island, Jelenga Beach and Maluk Beach.

Indonesia warns state firms on Dubai fallout

www.chinaview.cn 2009-12-01 12:01:52

JAKARTA, Dec.1 (Xinhua) -- Indonesian State Enterprises Ministry has warned state firms engaging in business in Dubai to watch out for developments in the Dubai World's debt crisis and its impacts, before investing further, a paper said here Tuesday.

Global markets are tumbling after Dubai World, the conglomerate that has long been the chief engine behind Dubai's explosive growth, last Wednesday announced it needed at least a six-month reprieve from paying its debts.

Secretary to the State Minister for the ministry Said Didu quoted by the Jakarta Post as saying that several Indonesia's state construction firms, such as Adhi Karya, and Wijaya Karya have been working on infrastructure projects there.

"State construction companies should stop or postpone their plans to expand their businesses in Middle-East countries," Didu said in a hearing with lawmakers.

State firms, including construction firms PT Adhi Karya and PT Wijaya Karya, may have to temporarily put a brake on their expansion in the Middle East as it is feared the fallout of the Dubai World default could trigger a knock-on effect.

Adhi Karya, for instance, has just completed the construction of a 35-floor apartment at Al-Burj in Dubai, the world's highest tower complex.

It is eying several other projects in the region, including an 106 million U.S. dollars project in Oman, in cooperation with a local company, Adhi Oman.

Meanwhile, Wijaya Karya has two new projects that should be started by the end of the year. One of them is the construction of two power plants each having the capacity of 2 x 500 megawatts in Saudi Arabia.

Meanwhile, the development of a resort project in Lombok, West Nusa Tenggara of Indonesia, to be largely financed by Dubai-based real estate developer Emaar Properties seems to have hit a snag with the Indonesian government now questioning the firms's commitment to the project.

Emaar, a subsidiary of Dubai World, signed a joint venture agreement with the Bali Tourism Development Corporation in 2008, under which it is committed to investing 600 million U.S. dollars to build a resort.

UAE advises Indonesia to sign FTA with GCC

Abu Dhabi (ANTARA News) - The United Arrab Emirates (UAE) has proposed to Indonesia to enter into a Free Trade Agreement (FTA) with the Gulf Cooperation Council (GCC), Indonesian Ambassador to the UAE M Wahid Supriyadi said.

"Singapore already has an FTA with the six-nation GCC and Malaysia is in the process of establishing the link with GCC," Supriyadi told Indonensian journalists in Abu Dhabi on Thursday.

He said the UAE had made the proposal through its foreign trade minister, Sheikh Lubna Al Qarini, at a meeting with Indonesian Trade Minister Mari E Pangestu in Dubai early this week.

The UAE had made the same proposal to ASEAN member countries when their finance ministers, including Indonesia`s Sri Mulyani, held a roadshow in the Middle East recently, he said.

The GCC groups six Gulf countries, namely UAE, Oman, Saudi Arabia, Kuwait, Qatar and Bahrain. The six countries have a combined population of 40 million.

"Since the onset of the global financial crisis, Gulf countries have become interested in doing business with and investing capital in Asia. Indonesia should use this opportunity," said Supriyadi who has been in UAE post for 11 months.

Speaking about the prospects of widening the market of Inonesian goods in the Middle East in general, the envoy said an "Indonesian Festival" was held in the UAE and other Middle Eastern countries in cooperation with Lulu Hypermarket, the largest hypermarket chain in the UAE which also had 74 branches in the Middle Eastern region.

Supriyadi said the GCC had also concluded an FTA with India and was negotiating another FTA with Europe.

He said during her one-day visit to Dubai earlier this week, Indonesian Trade Minister Mari E Pangestu met with her Somalian counterpart, Abdi Rashid Mohamed Abdi, to discuss efforts to step up trade relations between their two countries.

Lombok Int'l Airport should complete this year : VP Kalla

The Jakarta Post, Jakarta | Sun, 03/29/2009 4:30 PM

The construction of the Lombok International Airport in Tana Awu village, Central Lombok, West Nusa Tenggara is targetted to complete by October this year, state officials said Sunday.

In a coordinating meeting between Vice President Jusuf Kalla, Transportation Minister Jusman Syafeii Djamal and State Enterprises Minister Sofyan Djalil in Mataram,

Kalla emphasized the importance of the rapid completion of the airport project in order to support the Dubai Emaar Properties investment project on the island.

It is expected that the completion of the airport would go in hand with the completion of the planned tourist resort, he said.

The construction of the airport, which so far has costed Rp 802 billion, is expected to complete by the end of 2009 for operation in 2010.

Kompas.com reported that up to 69.91 percent of the airport runway infrastructure were done, while 64.77 percent of the passenger terminal and parking area construction needed to be completed. (amr)

100 UEA investors to visit Padang

Padang (ANTARA News) - Some 100 investors from the United Arab Emirates (UEA) are expected to visit here late June to explore the possibility of investment, an official said.

They would come to West Sumatra to see for themselves small islands off the provincial capital Padang, Padang Mayor Fauzi Bahar said here on Friday.

They were expected to develop the islands into tourist resorts, he said.

The mayor said the UAE investors expressed their wish to visit Padang during his visit to Dubai early this month.

He said the local administration would continue its effort to attract investors in line with the Indonesian president`s call for each regional government to open as many investment opportunities as possible.

XL seeks to refinance debts, targets 4m new subscribers

The Jakarta Post, JAKARTA | Fri, 03/20/2009 12:28 PM

Having suffered losses last year in part because of foreign exchange losses, PT Excelcomindo Pratama (XL) — the country’s third largest mobile phone operator — is seeking US$400 million worth of loans this year to help refinance its debts.

The plan, by which most of the new loans would be rupiah denominated while the debts to be refinanced are mostly dollar debts, was approved by the company’s shareholders meeting Thursday, said finance director Willem Lucas Timmersmans.

He said the new loans would be used to pay up $130 million in debt due to mature throughout this year, while “the remaining proceeds would be used to accelerate debt payments” in the following years.

Beyond 2009, the publicly listed company has loans of $300 million maturing in 2010 and 2011.

The refinancing program is part of XL’s strategy to lower its debt-to-equity ratio, which stood at the level of 4.1 percent by the end of last year.

The company was hit last year by higher spending on network expansion and on dollar-debt servicing as the local currency weakened, slumping to post a Rp 15 billion ($1.26 million) loss as against Rp 251 billion in net profits a year earlier.

“The idea is to reduce exposure to dollar debts and replace them with rupiah debts,” Hasnul said.

Previous reports stated that XL’s outstanding debts stood at around $1 billion by the end of 2008, about 90 percent of which was dollar denominated.

This year, the company plans to spend up to Rp 700 billion in capital expenditure, lower than the Rp 1.25 billion it spent on capital in 2008.

In relation to a planned rights issue, Hasnul said no decision had been taken as yet, pending the company’s next shareholders meeting later on this month.

The company previously said it was considering a rights issue to partly finance its capital expenditure, following the scrapping of its plan to raise funds from the sale of its 7,000 transmission towers.

With lower capital expenditure, and a predicted slower economic growth amid the global recession, the company has set a conservative target to add 4 million customers to its existing 26 million subscribers.

In 2008, it increased the number of its subscribers by 67 percent.

Thursday’s shareholders meeting also retained Hasnul as XL’s president director until 2011.

XL is 83.8 percent owned by Malaysia’s TM International Bhd through Indocel Holding Sdn Bhd, 16 percent by Emirates Telecommunications Corporation International Indonesia Ltd. and 0.2 percent by investing public.

Government Insists Lombok Deal Not Dead

The Jakarta Globe, Janeman Latul, March 17, 2009

High-ranking Indonesian government officials and Emaar International PJSC have denied that the Dubai-based development company has killed its massive $600 million project to turn a major portion of Lombok Island into another Bali.

“The government of Indonesia and Emaar have extended a delayed joint venture agreement to get the project underway for another three months,” an Emaar spokesman said in an e-mail from Dubai. The spokesman asked that his name not be used.

“Emaar has met its contractual obligations and the Indonesia Investment Coordinating Board [BKPM] has now asked Emaar for an extension of time to meet their obligations under the joint venture agreement,” the e-mail said.

Emaar closed its Jakarta offices on Friday and will coordinate further activities from Dubai, the spokesman said.

“Initially, Emaar set up its Jakarta office to establish a ground presence to drive the project forward and meet the JV obligations, leading to the finalization of negotiations with BKPM.”

However, Emaar does appear to be facing serious financial difficulties amid the global financial crisis, and is closing projects across the globe. The company suffered a 2008 fourth-quarter loss of $481.9 million, and its share price has fallen dramatically.

It was also reported from Dubai on Thursday that the company canceled its annual general meeting without giving a reason

Alwi Shihab, the presidential envoy to the Middle East region, told the Jakarta Globe by telephone from Taipei that the government received verbal confirmation on Friday from Emaar’s chairman, Muhammad Alabbar, that the project would be extended for another three months, although no written confirmation had yet been received.

“We could not get confirmation for the three-month extension until last Friday, when the UAE deputy prime minister and UAE Chamber of Commerce chairman met with the Indonesian task force,” Shihab said. “The chairman called Emaar’s chairman and asked him about the project. According to him, they agreed to extend the time for another three months,” he said.

Winarno Sujas, the Tourism Ministry’s director for business and investment, told the Jakarta Globe on Friday that Vice President Jusuf Kalla would summon related ministries for a meeting today in a bid to save the project.

Correction

On the Monday, March 16 edition of the Jakarta Globe, we reported that Dubai state-owned Emaar Properties PJSC had “announced” it was canceling a $600 million plan to develop a stretch of beach on the island of Lombok into a resort.

Later in the article, we attributed comments about the company’s problems dealing with Indonesian officials to Emaar Indonesia.

None of these comments came from an official spokesperson for the company.

They were all made by Emaar officials.

Neither Emaar Indonesia nor its parent company have made an announcement that they are quitting Indonesia.

We regret the error.

Indonesia's Excelcom says aims for rights issue in Q2

Reuters, Tue Mar 17, 2009 8:05am EDT  

JAKARTA, March 17 (Reuters) - Indonesia's third-largest mobile phone operator, PT Excelcomindo Pratama Tbk (EXCL.JK), said on Tuesday it is considering a rights issue in the second quarter to help finance its capital expenditure. 

"The rights issue is expected in the second quarter but details will be decided during the shareholders meeting on Thursday," Hasnul Suhaimi, the president director, told reporters. 

The firm said on Sept. 3 it may sell between 10-15 percent of its share capital to the public. But it has not released further details, while the Indonesian market has been hit by the global financial crisis. 

The company has said it wants to spend about $600-$700 million on capital expenditure this year, compared with 14 trillion rupiah ($1.17 billion) in 2008. 

Suhaimi also the firm is aiming to reach 30 million subscribers this year, up from 26 million in 2008 when subscriber growth was 68 percent. 

Malaysia's TM International (TMIT.KL) controls 83.79 percent of Excelcom while Emirates Telecommunications Corp (ETEL.AD) holds a 15.97 percent stake in the Indonesian company. ($1= 11,965 rupiah) (Reporting by Andreas Ismar; Editing by Sara Webb)

$600m Lombok Resorts Scrapped

The Jakarta Globe,  Janeman Latul, March 14, 2009 

Citing governmental paralysis and hinting that too many officials had their hands out, Dubai’s state-owned Emaar Properties PJSC has cancelled its massive $600 million property project that was to turn the pristine island of Lombok into another Bali. 

“We have closed our office in Jakarta starting Friday,” said Elly Savitri, Emmar Indonesia’s human resources manager. “Emaar has pulled out of its operations in Indonesia because the government cannot comply with the terms of the agreement with our joint venture company. 

“There have been too many delays on the realization of the project and the company just could not wait any more.” 

Elly also said Emaar had spent Rp 50 billion ($4.2 million) in consultancy fees on master plans. 

Winarno Sujas, the Tourism Ministry’s director for businesses and investment, told the Jakarta Globe on Friday that Vice President Jusuf Kalla had summoned the related ministries for a meeting this coming Wednesday in a bid to save the project. 

The cancellation of the project — announced with great fanfare in May 2007 by Kalla — is an enormous black eye for the Indonesian government and the local government of Lombok, West Nusa Tenggara Province. 

“Indonesia is our 16th global market and the Lombok development will scale up our property portfolio to a wider Southeast Asian region,” Muhammad Ali Al Abbar, Emaar Properties chairman, said at the project signing. 

The announcement of the failure of the project follows the recent pullout of the Saudi Binladin Group from a project to invest as much as $4.3 billion in developing rice crops in Merauke, Papua Province. 

The joint venture between Emaar and the state-owned Bali Tourism Development Corp. envisioned development of 1,200 hectares along seven kilometers of natural beachfront that would have transformed central Lombok’s Kuta and Tanjung An beaches over the next 12 years into a world-class resort and residential community consisting of 10,000 luxury villas, eight hotels and two 18-hole golf courses. 

Emaar’s Elly said the agreement stipulated that the government would provide a detailed master plan by last November to support infrastructure including an international airport, an access road to the property and finalizations of land acquisitions. The finalizations, however, never materialized. 

A plethora of government agencies failed to complete their part of the bargain and asked for an extension until this month. When Indonesian officials asked for another extension until June, Emaar called off its investment. 

“You understand the Indonesian government,” said an Emaar executive who asked not to be named, in a veiled reference to allegations of corruption in the local and central governments. 

Sumaryanto Widayatin, a special adviser to the Public Works Ministry, blamed unprofessionalism for the tangled negotiations. 

“I think it’s because the Ministry of Finance was worried about selling the land cheaply to Emaar,” he said, adding that the global economic crisis had also cut into the company’s liquidity. 

He said every large project in this country attracted officials who had their hands out. 

“Where in Indonesia do we not have the problem of corruption?” he asked.

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Emaar Hospitality has The Address for expansion

UAE to invest $700 billion in East Asia

Philstar.com, March 12, 2009 05:34 PM 

JAKARTA (Xinhua) -- The United Arab Emirates (UAE) plans to invest up to $700 billion in East Asia as the country had huge profits from soaring oil prices in recent years, an official said here today. 

Muhammad Lutfi, head of the Indonesian Capital Investment Coordinating Board, said the UAE has been looking for alternative places to invest. 

A delegation led by Sheikh Hamdan bin Zayed, UAE Deputy Prime Minister, met with Indonesian Vice President Jusuf Kalla at the latter’s office here to talk about the opportunity to invest in Southeast Asia's largest economy. 

Luffi said that among the sectors for possible investment discussed by the two leaders are energy, agriculture, tourism and food security. 

"They have money and now they are looking for alternatives for investment, they want to go to the East. Their policy, after the economic crisis, is to step up trade and investment in the East, including Indonesia, China and Japan," Luffi added.

Pertamina to Diversify Refinery in $1.7bn Deal

The Jakarta Globe, Mita Valina Liem & Janeman Latul, March 3, 2009 

PT Pertamina on Monday signed a $1.7 billion agreement with Star Petro Energy of the United Arab Emirates and Japan’s Itochu Corp. to expand the state-owned energy producer’s product range and capacity at its oil refinery in Balikpapan, East Kalimantan Province, a senior Pertamina official said at the fifth World Islamic Economic Forum in Jakarta on Monday. 

Rukmini Hadihartini, Pertamina’s processing director, signed the memorandum of commitment for the investment plan, which is aimed at expanding refining capacity to include “bottom products” used to produce plastic bags, car parts and other substances. 

The refinery, with the capacity to process 260,000 barrels of oil per day, now produces premium gasoline, kerosene and other top-end products. It ships bottom product residue to Singapore to be processed into other petrochemical products. 

“We plan to process the residue into more valuable products such as petrochemicals,” said Anang Riskani Noor, Pertamina’s vice president of communications. “We have always exported our bottom products because we don’t have the ability to process them here.” 

Anang said the company was still discussing the kinds of goods to be produced. 

He added that the agreement followed a preliminary deal signed in September with Itochu and Star Petro Energy. 

“In this challenging economic environment it makes sense to be as efficient as possible with our investments,” Karen Agustiawan, Pertamina’s president director, said in a statement. 

“We believe cooperation is the solution. We want to build on our positive partnership experiences in Muslim and non-Muslim countries.” 

Star Petro Energy is a diversified company based in the United Arab Emirates with operations in the airline, mining and insurance sectors. 

Itochu imports and exports goods such as textiles, machinery and oil and gas products. 

Sheikh Saud Bin Saqr Al Qasimi, the crown prince and deputy ruler of the Ras Al-Khaimah Emirate, said Star Petro Energy was investing in a state-owned project rather than a private one because it felt that government-backed projects were safer in the current economic climate. 

It chose Indonesia, he said, because of the country’s wealth of natural resources. 

Pertamina has exploration rights to drill for oil and gas in Malaysia, Libya, Qatar and Sudan. 

The company expects to meet domestic fuel demand by improving the efficiency of its refineries, ports and transportation and distribution networks, it said.

ICD moves ahead with plans to acquire BNI's sharia unit

Aditya Suharmoko, The Jakarta Post, JAKARTA | Wed, 03/04/2009 4:05 PM  

Dubai-based Islamic Corporation for the Development of the Private Sector (ICD) says it will go ahead with plans to acquire the sharia unit of Bank Negara Indonesia. 

The ICD said Tuesday it is still committed to executing the plan later on this year, to establish a major sharia bank in Indonesia, despite the global financial crisis. 

"Our intention is (to establish the bank) sometime this year. The crisis hasn't changed our resolve; although the crisis has forced everybody to reasses the situation, we're 100 percent committed to this project," said ICD chief executive officer Khaled M. Al-Aboodi. 

Al-Aboodi said the ICD would bring other investors, especially from the Middle East, to invest in the BNI's sharia unit. 

He added the new sharia bank would focus on "not only retail, but also corporate and investment" banking. "We'll provide a wholesale bank that supports businesses and individuals as well." 

ICD will inject US$450 million in funds to set up the new sharia bank. As BNI's sharia unit has a capital of Rp 500 billion ($41.49 million), the new bank's capital will reach around $500 million. 

"We'd like to make an impact. Small banks cannot make an impact." 

The central bank has announced it would cut the minimum capital requirement for banks seeking to spin off their sharia units to Rp 500 billion from Rp 1 trillion previously. 

BNI president director Gatot Suwondo has said the bank would spin off its sharia unit as soon as the regulations come into effect. 

ICD has so far invested in a number of companies and projects in the country, most of which went to PT Power Telecom (PowerTel) and PT Mandala Multifinance. 

Mandala received $8 million to fund its program for micro and small sized enterprises, and increased its capital base. PowerTel will receive about $50 million in phases for the development of fiber optic projects, said PowerTel deputy president director Temi Efendi. 

PowerTel, owned by the Tjokrosaputro family, has always been in the red since it was established in 2004. 

The Tjokrosaputro family owned Bank Pikko, before it was merged with Bank Century, which was then taken over by the government last year amid financial distress. 

ICD said it was looking at other projects worth $82 million in total. 

"We're interested in the financial sector, modern manufacture, infrastructure. We've looked at some of the projects, but we're looking for some regulations to be more clear, on the tollroads for example," said Al-Aboodi.

Garuda to Lease Eight Boeing Aircraft

Tuesday, 03 March, 2009 | 14:38 WIB 

TEMPO Interactive, Jakarta: PT Garuda Indonesia is to lease eight Boeing 737-800 Next Generation (NG) aircraft from Dubai Aerospace Enterprise worth US$350 million for between 10 to 12 years. 

“These are new planes priced at US$45 million each,” said Garuda's Managing Director Emirsyah Satar at the World Islamic Economic Forum in Jakarta, yesterday (2/3). 

It is planned that one of the planes will be delivered every month starting this June and Garuda will receive five planes this year. 

“Three plans will be delivered next year,” said Emir. 

This aircraft procurement is to strengthen Garuda’s domestic and regional flights. 

Garuda will return the planes when the lease period ends to Dubai Aerospace and can extend the contract or rent new planes. 

“With this financing system, our aircraft will stay new and modern,” said Emir. 

Garuda will also order 50 Boeing 737 NG aircraft and 10 Boeing 777-300 Extended Range aircraft in 2009 and 2010. 

These will replace old aircraft in phases. 

Chief Executive Officer of Dubai Aerospace, Robert Genise, explained that the flexible leasing program was profitable for airlines. 

“It can support the cash flow and develop their business,” said Robert. 

WAHYUDIN FAHMI

RMMI invests in Indonesia’s coal infrastructure

Commodity Online, 2009-03-02 11:45:00 

JAKARTA: RAK Minerals and Metals Investments (RMMI) on behalf of The Government of Ras Al Khaimah has announced its investment in coal infrastructure in Indonesia’s East Kalimantan province. 

It has acquired the requisite approvals to commence work on a railway network and coal jetty in East Kutai. Over the next five years, RMMI will invest in resources and in related infrastructure required such as a railway network and a coal-loading jetty. Through this investment, RMMI will be well-placed to support the growing energy requirements in the Middle East, specifically Ras Al Khaimah, United Arab Emirates. 

East Kalimantan, the largest province in Indonesia, is rich in mineral and natural resources including coal, gold, petroleum and natural gas. The influx of foreign and domestic investments for offshore oil and gas field exploration, mining and manufacturing operations has made it one of the wealthiest provinces in Indonesia. With new investments in transportation infrastructure, the range of economic activity in the province is expected to expand significantly and reduce the overall cost of doing business. 

Ras Al Khaimah is one of the fast growing emirates in the United Arab Emirates. In order to sustain regional development, the Government of Ras Al Khaimah is investing in energy resources and infrastructure in Indonesia. This is to meet the prime objective of investing in alternate energy sources such as coal to produce power at affordable cost. With the coinciding infrastructure investments, RMMI will be able to maintain a high level of cost control and therefore stabilise prices in the long run. 

Dr. Khater Massaad, Chief Executive Officer of RAK Investment Authority, signed the agreement with Dr. H. Awang Faroek Ishak, Governor of East Kalimantan Province (Gubernur Propinsi Kalimantan Timur) for the development of the Special Railway Network and Coal Jetty, to support the operation of a Coal Property in East Kutai. 

The agreement was signed in the presence of His Highness Sheikh Saud Bin Saqr Al Qasimi, Crown Prince and Deputy Ruler of Ras Al Khaimah, and His Excellency. 

President Dr. Susilo Bambang Yudhoyono of the Republic of Indonesia during the opening of the 5th World Islamic Economic Forum (WIEF) at the Ritz Carlton Hotel, Jakarta. 

“Today marks a milestone in our partnership with Indonesia. This agreement demonstrates our unwavering commitment to invest in harnessing the natural and human resources of East Kalimantan and to contribute to the development of the country while addressing the growing demand for energy resources and energy requirements in Ras Al Khaimah,” said Dr. Khater Massaad. 

Madhu Koneru, Managing Director of RMMI, who has been responsible for driving this partnership with the Government of East Kalimantan, commented: “Investing in infrastructure is at the centre of our strategic, long-term commitment in Indonesia. We believe that a world-class transportation infrastructure creates a wealth of opportunities not just for our business but equally so for the larger community in which we operate. We will work with various mine owners for the transportation of coal and welcome partnerships.”