Eximbank restructures $88m loans to PT PAL

The Jakarta Post, Jakarta | Mon, 04/06/2009 8:32 PM

Indonesia’s Export Import Bank (BEI) signed a deal to restructure its troubled Rp 1 trillion (US$88 million) loan owed by ailing state shipyard company PT PAL on Monday to help keep the company afloat.

“Our loans to PAL almost reached the maximum limit of disbursed credits, or 25 percent of our total equity which stands at Rp 4.3 trillion,” BEI president director Arifin Indra said on Monday.

He said the bank would still support PAL despite their weak condition by restructuring some of their loan requirements.

“The bank is only restructuring the loans related to working capital for the construction of vessels that are still 25 percent finished,” he said.

PAL has been in financial trouble since it received a contract for the construction of 20 vessels in 2006.

As costs of ship construction soared since then, PT PAL could not cover the increased full production costs and now, the company still has 18 unfinished orders.

The unfinished projects include the building of two vessels ordered by the Navy, four escort tugs worth $6.5 million each ordered by energy company BP Plc and three 38-meter boats ordered by the customs and excise agency.

There is another order for a 50,000 dead weight ton (DWT) vessels ordered by a Turkish private company.

PT PAL also has orders from Italian companies for a tanker with a capacity of 24,000 tons and two tankers with a capacity of 6,000 tons each.

Govt delays maiden export of LNG from Tangguh

Jakarta (ANTARA News) - The government is delaying the maiden export of liquefied natural gas (LNG) from the Tangguh refineries in Papua province to Fujian, China, initially scheduled in May this year.

Minister for Energy and Mineral Resources Purnomo Yusgiantoro said on Friday he was not sure how long it would take for the government to postpone the LNG exports from Tangguh.

Previously, the government has delayed a maiden export of the Tangguh LGN from February to May 2009 due to a technical problem.

He however said that the government would likely carry out the maiden export from Bontang, East Kalimantan.

"The government is willing to make sure that the Bontang gas production would not be affected following the decline in LNG demand from the refineries due to the global economic crisis," the minister said.

The government also assured that the Tangguh refineries in Papua would have been ready before it exported the commodity. It also wanted that the LNG terminal in Fujian would also be completed first.

The minister explained that the Indonesian team sent to inspect the terminal in Fujian had returned to Indonesia.

"The team reported that Fujian for the time being only asked for one cargo of LNG to test the use of its terminal. The demand would be met by shipping the LNG from Bontang," he said.

LNG RI signs deal with Japan on gas sales extension

Benget Besalicto Tnb., THE JAKARTA POST, JAKARTA | Sat, 02/14/2009 10:52 AM  

Indonesia and Japan on Friday signed a preliminary agreement on a 10-year liquified natural gas (LNG) sales extension. 

The signing of the initial agreement took place in Osaka which could soon be followed up by the signing of the final contract, said upstream oil and gas regulator BPMigas chairman R. Priyono in a statement. 

Under the agreement, he said, six Japanese firms will get an extension of LNG sales from 2011 to 2020. The six Japanese companies are Chubu EPC, Kansai EPC, Kyushu EPC, Nippon Steel Co, Ltd, Osaka Gas Co, Ltd, and Toho Gas Co, Ltd. 

“Total sales commitment under the contract is 25 million tons, (over ten year) which will be supplied from the Bontang plant in East Kalimantan. The Bontang plant will get its supply from the Mahakam block, which is operated by Total Indonesia,” he said. 

State oil and  gas firm PT Pertamina and Inpex Corporation also took part in the signing.

For the first five years, three million tons of LNG will be shipped to Japan per year with two million tons being transported under CIF (Cost Insurance Freight) and another one million tons under FOB (Free on Board). 

For the second five years, two million tons of LNG will be delivered per year with one million tons being transported under CIF and the other one million under FOB. 

Priyono noted that Pertamina had also signed a Deliverability Resolution Agreement (DRA), which nullifies an LNG delivery shortage claim from the Japanese buyers so that Indonesia would not be burdened with  penalty costs. 

Previously, the six Japanese firms had filed a shortage claim of 90 shipments until 2010.

He said that of all the LNG exports some 75 percent will be transported by Indonesian companies. Previously, the Japanese firms had only agreed that 50 percent of the exported LNG be transported by  local firms. The rest was delivered by Japanese LNG tankers. 

“There are many Indonesian companies with capacity to transport LNG. Pertamina will make an invitation for bids for transportation contracts. 

“The delivery business is lucrative. For one LNG freight contract the company will get a fee of US$30,000 per day,” he said. 

But most of the gas output has been committed for exports. Minister of Energy and Mineral Resources Purnomo Yusgiantoro said the government is seeking to reduce gas exports so that more gas supply will be made available for domestic use. 

Friday’s initial agreement will soon become a final contract. The new contract will then replace the existing 25-year-contract when it expires in 2010. 

Under the existing contract, Indonesia supplies 12 million tons of LNG to Japan per year.

Related Article:

Six Japan firms eye extending Indonesia LNG deal

Veep calls for speedy development of Tanjungpriok port

Rotterdam (ANTARA News) - Vice President Jusuf Kalla has called for a speedy completion of the development of Tanjungpriok port in Jakarta into an international export-import center and a national transit port. 

"Step up the realization of the project, and whenever possible finish the job in three years of the scheduled five years," he said after visiting the Rotterdam port in the Netherlands on Sunday. 

"Imagine the Rotterdam port is 40 kilometers in width, but it is clean and orderly," he said. 

The vice president said actually his visit to Rotterdam was not in his agenda, and he had a dinner with Dutch economic minister Maria Vanderhoeven, and Rotterdam mayor Ahmed. 

Kalla said the port of Rotterdam was important for Indonesia because all palmoil exports from the country to Europe went through the port. 

"So later ships from Tanjungpriok could go directly to Rotterdam," he said. 

Kalla said loading and unloading in the port of Rotterdam could be finished within 24 hours while in Tanjungpriok could be up to 10 days. 

The Rotterdam mayor, who was just elected three weeks ago expressed his happiness over Kalla`s visit. He said a lot cooperation projects could be done by Rotterdam and Tanjungpriok. 

"There are lot of projects that we could do such as cooperation in port management and others," he said. 

On the occasion Ahmed also invited Jakarta governor Fauzi Bowo who was also in the vice president`s delegation to immediately technicalities for the cooperation that would be done. 

Governor Fauzi Bowo said a lot could be learned from the Rotterdam port`s management. 

Bali to finish construction of special tourist port in 2009

Denpasar, Bali (ANTARA News) - The Indonesian tourist resort island of Bali expects to finish the construction of a special tourist port worth Rp92 billion in Tanah Ampo, Karangasem district, this year, Karangasem district head Wayan Geredeg said. 

Wayan Geredeg said that the construction of the port is in cooperation with three parties, namely the Karangasem regional administration, the provincial government of Bali and the central government. 

He said that the Karangasem district administration provided location for the port while the Bali provincial government and the central government provided funds worth Rp22 billion and Rp70 billion respectively. 

According to the district head, the physical construction of the port was now undergoing, but he said that its master plan was still in the stage of submission before a recommendation could be asked from the central government. 

"For this purpose, we still need a recommendation from the Bali governor," the district head said. 

He said that the special tourist port located in the eastern tip of Bali island would be very important for the development of Bali`s tourism. 

"A number of international cruise ship operators have contacted us, asking when the port would be operational," Gredeg said.

State-Owned PAL May Get $60m Rescue Loan

Janeman Latul, The Jakarta Globe,  January 11, 2009 

The State Ministry for State Enterprises is expected on Monday to approve a $55 million to $60 million loan package it hopes will save ailing state-owned shipbuilder PT PAL Indonesia, a ministry official said on Sunday. 

The mechanism and time frame for the rescue package is to be drawn up by state-owned asset management firm PT Perusahaan Pengelolaan Aset, or PPA. 

PAL has suffered several huge losses recently, including a Rp 120 billion ($11.04 million) deficit in 2006 and a Rp 40 billion loss in 2007. 

Since 2003, the ministry has described the company as “unhealthy” because it has struggled to remain profitable. 

“We will have a general meeting on Monday with PPA to discuss its assessment of several troubled state firms,” said Muhammad Said Didu, the state ministry’s secretary. “One of those is PAL.” 

Didu said that PAL was one of the country’s most strategically significant businesses and would have to be given new loans. 

“The company must be rescued because our defense industry relies on it,” he said. 

Renny A. Rorong, PPA’s corporate secretary, on Sunday also confirmed that the meeting would determine the company’s future, but he did not reveal specific loan amounts under consideration. 

“PPA sees that PAL is a strategically important company and the government maintains a huge interest in keeping it running,” he said. 

Harsusanto, PAL’s president director, said over the weekend that PAL was at work on 17 shipbuilding projects. 

The company, he said, is counting on a capital injection from the government to finalize those projects. He confirmed that the specifics of the loan package would be determined at Monday’s meeting. 

“They already agreed to give new loans to PT PAL [in December],” he said, adding that the package will likely include several different loans with terms of between two and eight years. 

The company has set a revenue target of Rp 1.6 trillion for 2009, up from Rp 1.2 trillion last year. 

“We can achieve our target this year if we complete at least 80 percent of last year’s carryover projects,” Harsusanto said, adding that PAL had managed to improve upon its 2007 loss by posting a Rp 2 billion profit in 2008. 

The shipbuilder has earmarked $10 million for capital expenditure this year, which it expects to use to improve its docking facilities and boost its engineering division. 

The value of PAL’s assets currently stands at Rp 3 trillion, Harsusanto said, adding that the company has $120 million in short-term debts to local private and state banks. 

Data from the ministry indicates that PAL’s total debts amount to Rp 1.9 trillion. 

The firm is at work on carryover projects from both the government and private clients. For the public sector, PAL is building two ships for the Navy and three 38-meter boats for the Directorate General of Customs and Excise. 

PAL is also building four escort tugs worth about $26 million for BP Plc., the world’s second-biggest oil producer, and a 50,000-dead-weight- ton ship for Turkey’s Geden Lines. 

Harsusanto said the shipbuilder was also in talks with potential partners from China, Singapore and South Korea to build offshore rigs. 

“They were impressed by our ability to build 3,000-ton offshore rigs, because not many companies in Asia can do that,” he said, adding that the German and Italian navies had also ordered ships from PAL. 

PT PAL Indonesia was started in 1939 by the Netherlands colonial authority. 

In 1980, the government changed PAL’s status to a general company, after years as a company under the Navy.

Related Article:

Sinking PT PAL Cast Adrift as Government Denies It Quick Fix

FOLLOW THE LETTER OF THE LAW

The Jakarta Post | Sat, 01/10/2009 8:24 AM 

  

A container ship docks at the Tanjung Priok Port in Jakarta, on Friday. Trade Minister Mari Elka Pangestu has issued a new export regulation requiring companies to use letters of credit (L/Cs) for exporting key commodities, including coffee, crude petroleum oil, cacao, mining products and lead bars. (JP/Ricky Yudhistira)

Timah to spend $21.3 million to buy new vessels

The Jakarta Post, Jakarta | Tue, 01/06/2009 11:09 AM  

State mining company PT Timah, the country's largest tin exporter, will purchase four vessels this year representing a total investment of Rp 230 billion (US$21.3 million), aimed at supporting its planned expansion in offshore exploration. 

Timah president director Wachid Usman said on Monday the offshore expansion would account for around 50 percent of the company's output this year, from the current 30 percent. 

Indonesia, the world's second-largest tin producer after China, has vast tin reserves in its territorial area, with those located offshore still untapped. 

Timah would allocate Rp 200 billion for buying a big vessel and some Rp 30 billion for the smaller ones. 

Wachid said the vessels would be used to carry the minerals to onshore processing plant. However, Wachid did not mention the source of the funds for the purchase. 

Timah plans to maintain production target similar to last year at around 60,000 tons. 

"The production this year will be more or less the same as last year," he said. 

However, as of third quarter of 2008, Timah produced 38,585 tons, or 24 percent lower than the 2007 level. During the same period, Timah posted an 18 percent jump in net profits to Rp 1.49 trillion from Rp 1.26 trillion. 

Due to the decline in global tin prices, the government has announced that national tin output might decline by 13 percent to 79,210 in 2008 tons from 91,280 tons in 2007. 

Tin prices have declined by more than 40 percent last year on the back of slower demand. 

Director general of minerals, geothermal and coal Bambang Setiawan said, as quoted by Bloomberg, that the country might set a tin production quota of less than 80,000 tons this year.

BNI gives $70m loan to Timah

The Jakarta Post, Tue, 12/23/2008 10:58 AM 

JAKARTA: State-run Bank Negara Indonesia (BNI), the nation's third largest lender, agreed Monday to channel US$70 million of standby loans to state mining company PT Timah to complete the building of 10 vessels currently being delayed by the state shipyard company PT PAL. 

"Currently PAL has about 10 delayed orders, each costing around $7 million to complete," Timah president director Wahid Usman said after signing the loan agreement. 

According to Wahid, Timah will benefit from helping the ailing PAL, as the company's subcontractor, because it wishes to learn more about vessel construction to improve the shipbuilding experience of its subsidiary PT Dok dan Perkapalan Airkantung (DAK). 

DAK provides dock services and vessel repairs, as well as producing small vessels for Timah. 

Under the deal with BNI, Timah is required to finish one vessel at a time before being able to withdraw the remaining loans. 

"The construction process will cost less than $70 million," said Usman. 

The shipbuilding project will also involve a deal between PAL and state-owned steel company PT Krakatau Steel, which will supply steel at a cheaper price to PAL. The Surabaya-based PAL will need around 14,000 tons of steel to finish the project. -- JP/(dis)

Pertamina orders two more vessels

The Jakarta Post, Wed, 02/20/2008 1:18 PM  

JAKARTA : State oil and gas firm PT Pertamina has ordered the construction of two vessels from state ship builder PT Dok dan Perkapalan Surabaya (DPS) for US$29.2 million. 

"The order of these two vessels is an effort to rejuvenate and expand our network," Pertamina president director Ari H. Sumarno said after the signing of the agreement with PDS on Tuesday. 

Pertamina currently owns 26 ships and leases 104 others. 

M. Firmansyah Arifin, director of DPS, said the two vessels were the fifth and the sixth Pertamina had ordered from DPS. 

The two 6,500 Long Ton Dead Weight (LTDW) vessels, which will be delivered in 2011, will be used to distribute fuel throughout the country. (JP/rff)

Bali builds modern port for cruise ships

The Jakarta Post

Antara, Denpasar | Thu, 05/15/2008 6:31 PM

A modern port aimed at attracting more foreign cruise ships is under construction in Karangasem district, Bali, Bali transportation agency head Putu Sujana said here Thursday.

Once the port is completed, foreign cruise ships passing Indonesian waters could schedule a few days for a port call in Bali, Sujana said.

"Luxury cruise ships carrying tourists from other countries to Singapore are expected to come to Bali once the modern, permanent port is ready."

Sujana said at least 300 luxury cruise ships arrived in Singapore every year, each carrying around 1,500 to 2,000 tourists.

"Floating hotels on their way to a number of countries in Asia usually pass Indonesian waters. They are expected, therefore, to stop in Bali when the port is ready."

Even if only a half of the 300 cruise ships stop in Bali, it would have a positive impact on tourism in the province, he said.

Financial support for the port is coming from the central government, Bali provincial administration and Karangasem district administration, Sujana said.

Construction is expected to finish in 2009.

At least 17 cruise ships with thousands of foreign tourists stopped at the old port in Karangasem in 2007 and 15 cruise ships in 2006.

One of them was the Italian Costa Marina with 496 tourists, which anchored at Karangasem port for two days.

Before the Bali bombing tragedy, said Sujana, more than 20 cruise ships stopped in Bali and in 1995 alone 70 of them with hundreds of thousands of tourists arrived at the resort island.

Pertamina orders two more vessels

The Jakarta Post

JAKARTA: State oil and gas firm PT Pertamina has ordered the construction of two vessels from state ship builder PT Dok dan Perkapalan Surabaya (DPS) for US$29.2 million.

"The order of these two vessels is an effort to rejuvenate and expand our network," Pertamina president director Ari H. Sumarno said after the signing of the agreement with PDS on Tuesday.

Pertamina currently owns 26 ships and leases 104 others.

M. Firmansyah Arifin, director of DPS, said the two vessels were the fifth and the sixth Pertamina had ordered from DPS.

The two 6,500 Long Ton Dead Weight (LTDW) vessels, which will be delivered in 2011, will be used to distribute fuel throughout the country. (JP/rff)

IDB funding procurement of patrol boats for RI customs

Jakarta (ANTARA News) - The Islamic Development Bank is funding the procurement of three new patrol boats for Indonesia`s Customs Office (DJBC) to enable the office to intensify its patrols in the country`s waters.

"With the small patrol boats it now has, DJBC often has difficulty chasing smugglers in eastern and western Indonesia waters where the waves often reach a height of five meters," the head of facilities and operations of the DJBC`s directorate for investigation, Achmad Budiyanto, said on the DJBC`s official website on Monday.

"It is now time for the Customs Office to have wide-bodied patrol boats with a length of 38 meters that can sail from island to island and brave high sea waves," he added.

State-owned ship-builder PT PAL had won the international tender held for the procurement of the patrol boats for DJBC, he said.

He said construction of the new boats would be completed in February next year.

DJBC now only had a total of 207 patrol boats of five types. he added.

Samudra Indonesia orders two bulk carriers at $97.6 mln

Jakarta (ANTARA News) - Publicly-listed sea transportation service company PT Samudra Indonesia Tbk has put an order with South Korea`s STX Shipbuilding for two bulk carriers at US$97.6 million.

The company placed the order for the two 57,700 dwt ships through its subsidiary, Foremost Maritime Pte Ltd, PT Samudra Indonesia`s corporate secretary, Diana P. Iskandar, said in a report to the Indonesia Stock Exchange (BEI) on Monday.

The two ships were scheduled for completion in the first half of 2011, she said adding the addition of the two ships was expected to increase the subsidiary`s capability to face a boom in the demand for bulk carrier services.

Industry minister commissions NaSDEC building in Surabaya

Surabaya (ANTARA News) - Industry Minister Fahmi Idris commissioned ae National Ship Design and Engineering Center (NaSDEC) Building at the Surabaya Sepuluh November Institute of Technology (ITS) campus here on Tuesday.

The center was built on a 2,200-square-meter plot of land and comprised hardware and software facilities that had cost a total of Rp7 billion.

Present at the commissioning ceremony were among others Industry Ministry , Transportation Ministry and Maritime Affairs and Fisheries Ministry officials, and national shipping and shipyard business people

NaSDEC is a new institute which was built from 2004 to 2005 under a cooperation scheme between the Industry Ministry and ITS following the issuance of Presidential Instruction No 5/2005 on empowerment of the national shipping industry.

On the occasion, the industry minister said the shipyard industry was a strategic one for the future of transportation, mining, fishing, tourism, and the military`s main armament system (alutsista).

Fahmi said the shipping industry was being developed in order to be able to meet the potential demand for ships in domestic and foreign markets.

Trada Maritime, Asahi Tanker form joint venture shipping company

The Jakarta Post, Jakarta

PT Trada Maritime, a subsidiary of Trada International trading and shipping company, signed an agreement to form a joint venture with the Japanese-owned Asahi Tanker on Tuesday in Jakarta.

Trada Maritime president director Darmansyah Tanamas said the joint venture, PT Trada Asahi Maritime (TAM), would provide shipping services and logistics to oil and gas companies.

Under the new venture, Trada Maritime and Asahi Tanker own respectively 51 percent and 49 percent of shares in the company. TAM will be controlled by Trada Maritime, with strategic guidance from Asahi Tanker.

"Our aim is to explore opportunities in the domestic clean oil product market in both Indonesia and other regions," he said as quoted in a press release.

President director of the 57-year-old Asahi Tanker, Makoto Iwata, said he saw a good strategic alliance and business opportunity between both companies.

"Our experience in transporting clean and other petroleum products will complement Trada's network and experience in the Indonesia region," Iwata said, adding that the joint venture with the local company was the first of its kind for Asahi.

Darmansyah said, on Jan. 1, 2010, the government would introduce a presidential decree on the protection of the domestic shipping industry, forbidding non-Indonesian flag vessels to operate in the country.

He said his company saw the upcoming decree as an opportunity to expand its business by striking an alliance with an experienced foreign shipping company.

Currently, he said, four of Indonesia's 13 biggest import and export commodities -- oil, coal, crude palm oil and gas -- were still controlled by international operators.

"These four are still controlled by international operators. TAM was created to answer the call to transport crude oil and its derivative products," he said.

Iwata said the venture would benefit both parties, in knowledge transfer and human and capital resources.

Trada Maritime, formerly known as PAS Maritime, offers services including marine terminals, ship management and logistics to oil and petrochemical industries in Indonesia.

Asahi Tanker is a shipping company with a 15-ship fleet, including small to large tankers and various types of specialized vessels, with affiliations in Korea, Taiwan, Singapore and London.(nkn)

Pertamina may issue global bonds

Ika Krismantari, The Jakarta Post, Jakarta

State oil and gas firm PT Pertamina is considering issuing global bonds this year to refinance loans, a company executive said Tuesday.

Finance director Frederick Siahaan said the company was still burdened with "over-expensive" loans totaling up to US$400 million and was planning to issue global bonds to repay them.

"The bonds will be issued after the completion of an audit to our financial report," Frederick said, while declining to name the value of the bonds to be issued.

Most of the $400 million loans are scheduled to mature within the next three years.

Pertamina plans also to spend up to $400 million to buy eight vessels over the next three to four years.

"So far, we have secured the sales of two of them, both used, each with a capacity of 15,000 tons. The two ships cost around $35 million and will be delivered in the first quarter of this year."

The company, he added, was also in final negotiations to buy two vessels from Chinese companies.

For the remaining four, Frederick said the company planned to open a tender for the procurement of vessels with a capacity of 45,000 tons each.

NSW scheme to be rolled out in nine more ports

The Jakarta Post, Jakarta

The government hopes to expand the National Single Window (NSW) scheme, an on-line permit service for importers and exporters -- first introduced earlier this week at Jakarta's Tanjung Priok Port -- to nine more major ports next year.

"So far, it's been successful at Tanjung Priok Port.

"And we expect that ten big ports, including Tanjung Priok Port, will be served by the scheme by the end of 2008, at the latest," said Edy Putra Irawadi, a deputy to the coordinating minister for economics, on Thursday.

By next April, he said, the government would introduce the system at Belawan Port in North Sumatra, Tanjung Mas in Central Java, Tanjung Perak in East Java, and Makasar Port in South Sulawesi.

The extension of the scheme to another five ports -- Panjang in South Sumatra, Pontianak in West Kalimantan, Batam, Bali and Banjarmasin in South Kalimantan -- was expected to follow later in the year.

Last Monday, Finance Minister Sri Mulyani Indrawati officially launched the first stage of NSW and its web portal -- http://www.insw.go.id.

During the first stage, five government agencies out of the 36 with responsibilities in the export/import field, have adopted the system, namely, the Customs Office, Food and Drug Control Agency, Directorate General of Foreign Trade, Animal Quarantine Center and the Agricultural Quarantine Center.

Currently, however, only 100 importers -- the beneficiaries of the so-called fast-track priority facility operated by the port authority -- are able to benefit from the scheme.

The priority facility, which grants importers preferential treatment for goods inspection at the port, is restricted to firms that have a proven track record and have never violated the regulations.

As for exporters, they will not be eligible to receive such treatment during the first phase of the NSW scheme, which is expected to end before April, when the second phase is scheduled to commence.

"We hope that by April next year, when we launch a common portal, the work of all the 36 agencies will be integrated in the NSW system, as well as other importers and exporters, so that we can simplify permit processing and curtail corruption," Edy said,

"There used to be a lot of redundancies involved as regards the necessary documents, unnecessary payments and convoluted bureaucracy."

He said that under the new service, an importer would only need 7.5 hours to get the necessary clearances to recover their shipments from the port authority, must faster than previously, when several days might be required.

The new service would also significantly reduce costs.

Edy said the NSW scheme had also simplified the job of the relevant government agencies, adding that the 23 biggest ports in Indonesia had to process 4.5 million export and import documents every year.

Indonesia`s Bukit Asam confirms will buy shipping company

Jakarta (ANTARA News) - State-run PT Tambang Batubara Bukit Asam, Indonesia's sixth-largest coal miner, said Tuesday that it is planning to acquire the government-owned shipping company PT Bahtera Adiguna, confirming a media report.

"We have asked Pricewaterhouse Coopers to conduct the due diligence. Later we will also need to appraise the company," Bukit Asam director Milawarma told Thomson Financial.

Milawarma was responding to a report by Investor Daily which said the acquisition may cost Bukit Asam around 100 billion rupiah. He said it was "too early" to comment on the purchase price.

"We hope that in January we will have a clear idea whether or not we will go ahead with the acquisition," he said.

Milawarma said by running its own shipping company, Bukit Asam will be able to secure a better price for its coal sold to domestic buyers since it will not have to subcontract the shipping to third parties.

Bukit Asam is primarily a domestic coal player. Its main buyer is state-owned power company PT Perusahaan Listrik Negara.

Milawarma said Bukit Asam was expecting to sell 10.8 million tons of coal this year of which about 9 million tons will come from its own mine. The rest will be purchased from third parties.

Electronic sea charts launched

The Jakarta Post, Jakarta

The Indonesian Navy launched its new Electronic Navigational Chart (ENC) on Tuesday, expecting to provide more accurate navigational data at sea than manual charts.

The ENC, a compact disc containing navigational charts displayed by an Electronic Chart Display and Information System (ECDIS), was put together by the Navy's Hydrographic Agency.

Chief of the Hydrographic Agency, Commodore Willem Rampangilei, said the ENC would provide a number of advantages, including accident alarms and continuous ship positioning.

"It also takes a shorter time to determine the movement of ships and get other navigational data with the ENC," Willem told a media conference after the launch of the ENC aboard the KRI Leuser, a Navy ship used for navigational mapping and research purposes.

The Hydrographic Agency, with the support of the United Kingdom Hydrographic Office (UKHO), the Marine Port Authority of Singapore and the Japan Hydrographic Association (JHA), has completed electronic charts for sea traffic at 18 out of a total of 25 international ports in Indonesia.

The agency aims to complete the rest in 2009 in accordance with the International Maritime Organization (IMO) convention on the Safety of Life at Sea, which Indonesia has ratified.

The convention obliges IMO members to apply the ENC in their navigational systems by July 1, 2010 at the latest. Some 35 countries out of the total 167 IMO member countries, including Indonesia, have applied the ENC in their navigational systems.

The Navy earlier this year also launched an ENC for the sea route connecting Malacca and Singapore Straits. The ENC, which was produced by both Indonesia and Singapore, was part of the ocean traffic system operated in three different regions in Indonesia, namely the west, central and east territorial waters.

Navy deputy chief Rear Adm. Didik Heru said the ENC did not only represent the country's ability to develop its own ENC, but also reflected its commitment to complying with international navigation safety standards.

"Indonesia's maritime area, connecting Asia and Australia, is known for its high traffic frequency by international fleets. If Indonesia does not have ENCs at its international ports, it will hamper foreign ships from traveling here."

Captain Robert Ward, the director of the International Hydrographic Bureau, who attended Tuesday's event, said the world community and particularly the maritime sector would benefit from ENCs, which covered very important trade routes and ports in Indonesia.

"A concern has been that while ECDIS equipment (the ENC displayer) has been available for some time and mariners are ready and waiting to use the systems, the necessary official electronic charts have been missing for some key areas of the world."

"Today's launching marks a big step forward in filling in one of those key areas. It sets an example for others to follow," said Ward.

While the homemade ENC was launched Tuesday, unofficial ENCs have been on sale locally for some time.

Commodore Willem reminded mariners of the danger of using those unofficial ENCs as the contents could not be held accountable. "Customers will soon be able to get the official ENC after it appoints an authorized distributor." (lln)