Indonesia promotes domestic military production

Novan Iman Santosa, The Jakarta Post, Jakarta | Tue, 11/24/2009 12:55 PM

Users and makers of Indonesian weapon systems will again sit together Tuesday at a series of workshops organized by the Defense Ministry, aiming to empower the country's strategic industries in fulfilling domestic needs from the Indonesian Military (TNI) and police.

The first session of the workshop was held Wednesday in which users outlined their needs especially in systems and equipment already produced by domestic strategic industries.

The Indonesian Navy, for example, needs more than 200 patrol boats and transportation vessels, Navy spokesman Cmdr. Iskandar Sitompul told The Jakarta Post on Sunday.

"We have prioritized the procurement of additional patrol boats and transport vessels such as the landing transport docks *LPDs* we buy from South Korea and PT PAL," Iskandar said over the phone, referring to the state-owned shipbuilder.

"PT PAL should be able to produce these kinds of vessels, because they do not need sophisticated systems for weapons or command systems."

Iskandar said battle vessels such as destroyers, corvettes, and submarines were much more complex and therefore the Navy would procure them from foreign shipbuilders.

However, he emphasized that PT PAL needed to adhere more strictly to its delivery schedules for vessels.

"The LPDs we ordered from South Korea were delivered within six months and a year," he said.

"Meanwhile, those from PT PAL were behind schedule by around six months."

In addition to the LPDs, PT PAL has also produced 12 FPB-57 fast patrol boats made under license from German shipbuilder Friedrich Luerssen Wieft.

The Navy is also operating a number of aircraft assembled by state-owned aircraft maker PT Dirgantara Indonesia (PT DI). These include the NC-212 Aviocar (transport and maritime patrol versions) and the NBell-412 and NBO-105 helicopters.

The company is ready for bigger orders from the government, despite having plenty of sub-contracting orders from larger aircraft builders - particularly the European Airbus, PT DI spokesman Rahendi Triatna told the Post on Saturday.

"For example, we can produce between five and seven CN-235 *aircraft* per year with standard configuration," Rahendi said in Bandung.

"We also have six NC-212-200 aircraft and nine NAS-332 Super Puma *helicopters* all in basic, green, condition."

PT DI was working on four CN-235 in maritime patrol aircraft (MPA) for the South Korean Coast Guard, Rahendi said.

Tuesday's session, which Industry Minister MS Hidayat is scheduled to attend, will focus on the strategic industries' presentation of their capabilities and needs.

State-owned weapons and munitions producer PT Pindad, for example, expects the government to procure more locally made weapons.

"We could produce up to 20,000 firearms per year, but the government usually orders only around 5,000 at the most," PT Pindad spokesman Timbul Sitompul told the Post on Sunday.

Timbul said PT Pindad was actively taking part in various international exhibitions to market its products. Pindad is scheduled to take part in an exhibition in Langkawi, Malaysia, in December, he said.

Pindad produces, among others, the SS-1 and SS-2 assault rifles and the Anoa 6x6 armored personnel carrier.

The workshops will continue on Dec. 1, with Finance Minister Sri Mulyani as a keynote speaker, and are set to conclude with a national seminar on the revitalization of the strategic industries, on Dec. 8. President Susilo Bambang Yudhoyono is scheduled to open the seminar at the State Palace.

Govt to impose guidelines on airport development

The Jakarta Post, Jakarta | Tue, 11/24/2009 9:47 PM

The Transportation Ministry will soon issue an “airport principle” containing guidelines for government agencies including regional administrations as well as airport operator companies in planning, constructing, and operating airports across Indonesia.

The ministry’s director of airports Bambang Tjahjono said that they aimed to impose the principle in January 2010, to follow up the newly-endorsed Law No. 1/2009 on Aviation that allowed private companies and regional administrations to build and operate airports.

“This guideline will give exact measures about airport development planning as well as criteria for local administrations that plan to construct a new airport in their territories,” Bambang told The Jakarta Post.

He criticized regional administrations that sometimes proposed to build new airports to the ministry without supporting comprehensive studies about the future plan of the airport.

“Sometimes regional leaders, governors and regents, are too ambitious to build airports but lack market study. As a result, new airports become deserted or even abandoned,” Bambang said.

He cited the failing Samarinda Baru airport in Samarinda, East Kalimantan, the unclear West Java International airport plan in Majalengka, West Java, and the deserted Notohadinegoro airport in Jember, East Java, as examples.

Data from the ministry recorded 196 airports nationwide, excluding those owned by private parties and military that were not used for public flights, Bambang said.

“The minister has recently approved the plans to develop 31 new airports.”

Of the new airports, only the West Java International Airports in Majalengka is planned to be a big airport.

The rest are small airports, mostly in eastern Indonesia, such as Aceh Singkil in Nanggroe Aceh Darussalam, Enggano in Bengkulu, Banyuwangi in East Java, Wakatobi in Southeast Sulawesi, Tual Baru in Maluku, Nabire Baru in Papua, and Halamahera Tengah in North Maluku.

“Most of those small airports will be funded by local budgets. The central government is only approving their proposals,” Tjahjono said. (bbs)

Ancol to perform in Thailand and Vietnam

Nani Afrida , The Jakarta Post, Jakarta | Tue, 11/24/2009 4:35 PM

Jakarta-owned developer and recreation operator PT Pembangunan Jaya Ancol will expand its business to overseas markets by performing dolphin shows in three countries—Vietnam, China and Thailand, starting next year.

The company president director, Budi Karya Sumadi, said that Vietnam would be the first country to be visited, which would cost Rp 10 billion (US$ 950,000) in investment.

“We will work together with Soui Tien Park in Ho Chi Minh, Vietnam. So, the budget would be smaller,” Budi Karya told reporters and investors during the company public expose in Jakarta on Tuesday.

According to Budi Karya, Ancol would spend about Rp 20 billion to perform dolphin shows in those countries.

“The shows overseas are part of our plans to boost our revenue next year. We also have several other programs in the city amusement park,” he said.

Related Article:

Ancol gains more revenue on amusement parks

Tax incentives offered at special economic zones

The Jakarta Post , Jakarta | Tue, 11/24/2009 1:44 PM

The government is offering tax incentives to investors who wish to open business in five special economic zones across the country.

Industry Minister Mochammad Suleman Hidayat said Tuesday the special economic zones in question were located in Riau Islands, eastern part of Sumatra, East Kalimantan, north coast of Java and Papua.

“The incentives are necessary to make people come [to invest]. We have only decided on the designated zones,” Hidayat told kompas.com after a limited Cabinet meeting on the economy.

He added the economic zones were chosen due to relatively adequate infrastructure that is in place there.

RI asked to draw up national strategy for UN-REDD

Antara News, Tuesday, November 24, 2009 13:42 WIB

Jakarta (ANTARA News) - As a tropical-forested country, Indonesia has been asked by the United Nations to draw up a national strategy to reduce emissions from deforestation.

Indonesia and other countries with tropical rain forests are stepping up the fight to combat climate change by taking new initiatives called the UN Reduced Emissions from Deforestation and Forest Degradation (UN-REDD) program.

Forestry Minister Zulkifli Hassan at a national discussion on climate change here on Monday signed a document on government participation in the UN collaboration program in the UN-REDD program.

The UN-REDD program, to be carried out in a collaboration with the United Nations Environmental Program (UNEP), the United Nations Development Program (UNDP) and the Food and Agriculture Organization (FAO), was unveiled by UN Secretary-General Ban Ki-moon and Prime Minister of Norway Jens Stoltenberg in New York last September.

The Indonesian province of Aceh, with its vast forests and willingness to work on REDD issues, will naturally be a focus of the UN-REDD.

In the national discussion, the UNDP Director for Indonesia, Hakan Bjorkman, said the program was intended to assist the developing countries to arrange a REDD scheme.

Norwegian Environment Minister Erik Solheim who was also present in the discussion said his government was financing the initial phase of the UN-REDD program in Indonesia and in other developing countries.

Indonesia and eight other developing countries namely Bolivia, Democratic Republic of Congo, Panama, Papua New Guinea, Paraguay, Tanzania, Viet Nam, and Zambia have already expressed formal interest in assistance under the UN-REDD program.

The UN-REDD program will support these countries as part of an international move to include REDD in new and more comprehensive UN climate change arrangements to kick-in post 2012.

The Intergovernmental Panel on Climate Change (IPCC) estimates that the cutting down of forests is now contributing close to 20 per cent of the overall greenhouse gases entering the atmosphere.

The program is aimed at tipping the economic balance in favor of sustainable management of forests so that their formidable economic, environmental and social goods and services benefit countries, communities and forest users while also contributing to important reductions in greenhouse gas emissions.

Indonesian Environment Minister Muhammad Hatta said he would make coordination with related institutions to make the arrangement of emission reduction scheme from deforestation a success.

"UN-REDD is an inter-sectoral issue and therefore, with other related ministers we will make every effort to make the program a success," Muhammad Hatta said.

Japan still expects to buy LNG from Donggi Senoro

Alfian , The Jakarta Post, Jakarta | Tue, 11/24/2009 1:09 PM

A high ranking official from Japan told reporters Monday that the world's largest LNG (liquefied natural gas) buyer still expects to get LNG supply from the much-debated Donggi Senoro project in Central Sulawesi.

"The project is very much important for both sides *Indonesia and Japan* and yes *we still hope to get LNG supply from the project*," Takayuki Ueda, Japan's director general for natural resources and energy said on the side lines of the 10th Indonesia-Japan Round Table in Jakarta.

Ueda added that he was optimistic about the project's LNG market prospects even though Kansai Electric Power Co. Inc. had dropped its plan to buy LNG from the project. "The project needs to find another customer, but since the project is very fruitful, I hope many companies would like to joint in this project," said Ueda, adding that he still expected the project to be on schedule despite the protracted ongoing negotiations.

The Donggi Senoro LNG plant is prepared to produce LNG from natural gas from Senoro and Matindok gas fields in Central Sulawesi. Japan intends to play a big role in the project as Mistubishi Corporation holds a controlling 51 percent share in PT Donggi Senoro LNG, a joint venture prepared to operate the LNG plant. State oil and gas company PT Pertamina holds a 29 percent participating stake in the venture, while PT Medco Energi Internasional holds the remaining 20 percent.

Japan had planned to play a significant role in project financing as the Japan Bank for International Cooperation (JBIC) was prepared to be the majority lender both for the upstream and downstream sides of the project, requiring about US$3.4 billion. But this was on the basis that the LNG would be exported to Japan to supply Japanese power companies.

The joint venture firm had therefore signed initial agreements for gas sales with two of Japan's leading power companies: Kansai and Chubu Power Co. Inc. Under the agreement, each company would have been supplied with 1 million tons of LNG per year from the plant for 12 years, starting from 2012.

But, the LNG project has been in limbo since at the end of the tenure of the last cabinet, the outgoing government, led by former Vice President Jusuf Kalla, decided the natural gas from the two blocks should go to the domestic market. This government decision led Japan's Kansai Electric Power Co. to drop its plan to buy the LNG from the project.

Now Medco and Pertamina are in talks with three potential domestic buyers: state power producer PT Perusahaan Listrik Negara (PLN), state power producer Pupuk Sriwijaya, and domestic ammonia producer Panca Amara Utama (PAU).

The developers are also in talks with several domestic banks, as JBIC will no longer provide loans if the gas is not intended to be processed as LNG for export purposes.

Last week, the domestic banks were supposed to propose how much they could finance the project. But, the director general for oil and gas Evita H. Legowo said the matter was still being discussed.

Pertamina to prepare for IPO

Antara News, Tuesday, November 24, 2009 14:36 WIB

PT Pertamina. (ANTARA/Ardika)Jakarta (ANTARA News/Asia Pulse) - Indonesian state-run oil and gas company PT Pertamina said it may list some of its units on the Indonesian Stock Exchange next year ahead of plans to launch its own initial public offering (IPO).

Pertamina may sell shares in insurance unit PT Tugu Pratama Indonesia, drilling unit PT Pertamina Drilling Services, geothermal unit PT Pertamina Geothermal Energy and energy exploration unit PT Pertamina Hulu Energi, chief financial officer Frederick Siahaan said.

Siahaan said the company would try to list subsidiaries first to increase transparency, adding that Pertamina would retain majority stakes.

Garbage-gas-fueled power project to begin producing early 2010

Antara News, Tuesday, November 24, 2009 05:33 WIB

Two workers is packaging organic fertilizer made from garbage at the Cilowong dump in Serang, Banten. (ANTARA/Asep Fathulrahman)Bekasi (ANTARA News) - A project using gas emanating from garbage to produce electricity at the Bantar Gebang waste dump in Bekasi is expected to become operational with a capacity of 500 KVA in early 2010, a local environmental official said.

"We are now only waiting for the completion of cell number four to provide waste-fueled electricity, It is estimated that in early 2010, the 500 KVA of electricity can be produced from garbage," said the head of Bekasi`s Environment Management Agency, Dudy Setiabudhi, here Monday.

The project was now already producing 120 KVA of electric power half of which was distributed to residents around the dump and the other half used by the company implementing the project, PT Gikoko Kogyo of Japan.

Dudy said, previously, the garbage at the Bantar Gebang dump was processed into compost but now it was being used to produce electricity.

Garbage at the dump produces methane gas which is one of the substances contributing to global warming because it damages the earth`s ozone layers. But the methane gas from garbage at Bantar Gebang was now being used to produce electricity.

By virtue of the electricity production project at Bantar Gebang which was helping to reduce global warming, the Bekasi municipal government would be entitled to receive carbon credit funds from the United Nations, he said.

"Gikoko Kogyo will receive 83 percent and the Bekasi municipal government 17 percent of the UN carbon credit funds but the funds will be disbursed after a verification process and fulfilment of certain administrative procedures," he said.

Chevron Seeking Partners In Indonesian Deepwater Fields

CNN Money, November 23, 2009: 02:24 PM ET

HOUSTON -(Dow Jones)- Oil giant Chevron Corp. (CVX) confirmed Monday it is seeking partners for the multibillion-dollar Ganal-Rapak deep sea gas project off Indonesia's East Kalimantan province.

"The process is ongoing and subject to approvals by the government of Indonesia," spokesman Kurt Glaubitz told Dow Jones Newswires in an email, adding that the company is "not disclosing details related to the process at this stage."

A person familiar with the matter said Chevron, the second-largest U.S. oil company by market value, was seeking to reduce its 80% stake in order to mitigate risk in the venture, which could cost about $8.5 billion to develop.

The move is a sign that the economic recession is making even financially strong companies prune their assets in an effort to reduce risk, become leaner and raise cash to focus on shorter-term projects.

The East Kalimantan concession includes the Ganal Block that covers the Gehem and Gendalo gasfields and the Rapak Block that includes the Ranggas gasfield. According to press reports, the company has said production from the blocks is expected to start in 2016. Italy's Eni S.p.A. (E, EMI.MI) holds the remaining 20% interest in the project. Indonesia state-owned PT Pertamina has said it is interested in acquiring a 10% interest.

The development of the Rapak and Ganal blocks is seen as key improving Indonesia's declining gas production.

San Ramon, Calf.-based Chevron is one of the largest oil and gas producers in Indonesia.

-By Isabel Ordonez, Dow Jones Newswires; 713.547.9207; isabel.ordonez@ dowjones.com

(I Made Sentana in Jakarta and David Winning in Sydney contributed to this article)

City announces plans for flood early warning system

Indah Setiawati , The Jakarta Post , Jakarta | Mon, 11/23/2009 10:14 PM

The Jakarta administration will develop an early warning system for areas around the Pesanggrahan River in South Jakarta, to mitigate possible flooding in this rainy season.

Since the Situ Gintung dam burst earlier this year, the areas have become more prone to flooding, because the dam that once retained flood water from the river is no longer in place.

Deputy Governor Prijanto said the system would station several workers in the former dam area who could make quick calls to heads of nearby residential areas whenever water levels exceeded acceptable limits.

“We will build a good early warning system. If the dam shows sign of flooding, people around Pesanggrahan river have to know about it,” Prijanto said Monday at City Hall.

However, the Jakarta Administration could not do anything related to the rehabilitation of the infrastructure of the Situ Gintung dam, which burst on March 27 during the rainy season, Prijanto said.

Besides making the early warning system, he said he would order the mayors of South and West Jakarta to provide temporary shelters for residents whose houses may be affected by future floods.

The administration also plans to station dinghies and emergency response teams in areas near the river, to minimize the time it takes aid to reach flood areas, Prijanto said.

The head of Environmental Task Force NGO, Ahmad Safrudin, said the move was too late since the Situ Gintung catastrophe had happened eight months ago.

“The city should have developed an early warning system straight after the dam burst, not at the beginning of this rainy season.

“But it’s better late than never,” he added.

PLN to tender 3 new projects

Nani Afrida , The Jakarta Post , Jakarta | Mon, 11/23/2009 10:39 PM

State electricity producer PT PLN on Monday revealed it would hold put three new electricity projects to tender, to be financed by export credit.

The projects are to install submarine cable in Bali; to empower network and electricity distribution in Jakarta and to upgrade the capacity of the Muara Tawar add-on gas and coal-fired power plant (PLTGU) in Bekasi, West Java.

“We will hold a tender for these projects,” PLN planning and technology director Bambang Praptono told reporters at the House of Representatives in Jakarta on Monday.

The submarine cable project is worth US$60 million (Rp 6 trillion), while the projects in Jakarta and West Java are worth $300 million and $1 billion.

Bambang said several foreign financing institutions had voiced interest in the projects already. The institutions are the Japan Bank for International Corporation (JBIC), the Japan International Coorperation Agency (JICA) and German Bank, KfW.

Funding for the projects would be taken from export loans and PLN's internal budget, Bambang said.

“For example, the Muara Tawar project requires $1 billion, so it will take $850 million from export loans and $150 million from PLN,” he said.

Govt eyes finalization of key airport projects

The Jakarta Post, Jakarta | Mon, 11/23/2009 9:14 AM

Airport development projects will be one of the priorities of the Transportation Ministry next year, including the finalization of ongoing expansion projects at three international airports, and constructing up to 31 smaller airports.

The three international airports being upgraded are Kuala Namu International Airport in Medan, North Sumatra, Lombok International Airport in Lombok, West Nusa Tenggara, and Sultan Hasanuddin International Airport in Makassar, South Sulawesi — with a combined project value of more than Rp 5 trillion (US$509 million).

The ministry’s director of airports, Bambang Tjahjono, said over the weekend that the completion of these projects was urgent and would play vital roles in the economy, both in those regions and the nation as a whole.

“Lombok Airport, for example, will act as buffer for Bali’s Ngurah Rai International Airport, which is already very busy,” Tjahjono said in an interview.

Lombok is a resort island situated around 70 kilometers east of the world-famous island of Bali.

With a 2,750-meter runway, Lombok Airport will be suitable for larger aircraft such as the Boeing 747, Tjahjono said.

The Lombok Airport complex is built on a 551-hectare plot of land, which is almost twice the size of Ngurah Rai. The project is estimated to cost Rp 802 billion, which is being jointly funded by state airport operator PT Angkasa Pura I and local provincial and regional administrations.

The project has been accelerated, with the government hoping to make it partly open for the public between December or January at the latest.

To the west, Medan’s Kuala Namu Airport is scheduled to be opened next year, following several delays triggered mostly by land acquisition problems.

“However, all the required land has been cleared. We are now stabilizing the land before beginning the construction of the 3,750-meter twin runways,” Tjahjono said.

With a 6.5-hectare passenger terminal, the airport will be the country’s second-largest airport after Jakarta’s Soekarno-Hatta International Airport.

The runway construction alone, funded by the state budget, is anticipated to cost up to Rp 1.2 trillion, with an overall cost of Rp 4.4 trillion.

“The passenger terminal and other facilities are the responsibility of PT Angkasa Pura II,” he said.

The construction of Kuala Namu began in 2006 and was targeted to replace Polonia International Airport that is situated near the center of Medan and has a difficult takeoff path because of its short runway.

Sultan Hasanuddin International Airport project in Makassar is now around 80 percent complete and is scheduled to be fully operational by 2010.

“Overall, the airport is 80 percent complete. We are now finalizing some minor infrastructure elements and facilities,” Tjahjono said. The 52,000-square-meter airport, the largest airbase in Sulawesi, can accommodate up to 8 million passengers per year.

In addition to the expansion of airports in those three cities, the government also plans to construct and develop 31 smaller airports across Indonesia.

“Most of the smaller airports will be funded by local administrations. The central government is only approving their proposals,” Tjahjono said. (bbs)

House approves Rp 300 b for W. Sumatera reconstruction fund

The Jakarta Post, Jakarta | Sun, 11/22/2009 7:26 PM

The House of Representatives has approved the release of a Rp 300 billion (US$ 30 million) relief fund to assist reconstruction and rehabilitation in areas destroyed by a powerful earthquake in West Sumatra in September.

The funds are part of Rp 1. 2 trillion taken from this years budget agreed on by the House and the government.

Bakri Beck, Deputy for Rehabilitation and Reconstruction at the National Disaster Mitigation Agency (BNPB), said on Sunday the House had agreed to allow the government to allocate the money.

“We can use the money as soon as we sign a memorandum of understanding with the related parties,” Bakri told Antara state news agency.

He added his office would hand over the fund to residents so as they might rebuild or repair houses damaged by the earthquake.

“To smoothen the transfer of the funds, we will ask for residents to form groups consisting of between 20 and 25 people,” he said.

He added his office would transfer the fund to bank accounts each group had opened.

Data from the provincial Natural Disaster Mitigation Board (Satkorlak) has revealed 37,587 houses were destroyed by the quake. (ewd)

World Halal Business and Food Expo Held in Jakarta

KOMPAS.COM/GABRIEL ABDISUSANTO, SATURDAY, 21 NOVEMBER 2009 | 7:23 AM

JAKARTA, KOMPAS.com - The Food, Drug and Cosmetics Study Institute at the Indonesian Ulemas Council (MUI) and PT Puteri Cahaya Kharisma (Performax) will hold a world halal summit and halal business and food expo here on July 23-25, 2010.

"The events will be attended by representatives from Muslim countries. Most of them are engaged in food, beverage, banking, distribution, hypermart, and cosmetics industries," Performax President Director Risda Amarina said here on Friday.

As the world’s largest Muslim country, Indonesia played an important role in halal food and beverage industries to protect world Muslim customers. It also had the potential to serve as a source of world halal products and a destination of Muslim tourists, she said.

Indonesia was also open to international trade and therefore, it was very reasonable for the country to play an important role in applying a halal system, she said. According to her, the halal system applied not only to foods and beverages but also to businesses based on Islamic principles.

She said the halal system in Indonesia had covered the food sector and the sharia banking industry as the business supporting sector. However, many business agents and people still had inadequate knowledge of halal concept in an integrated way.

"To familiarize the community with the concept, the institute, along with Performax under the sponsorship of the Trade Ministry, the Culture and Tourism Ministry, the Agriculture Ministry, the Industry Ministry, and the Drug and Food Control Agency (BPOM) would organize the events," she said.

Editor: jimbon

RI eyes more investment from Italy, Luxembourg

Hyginus Hardoyo, The Jakarta Post, Rome | Sat, 11/21/2009 12:12 PM

Indonesia is looking to attract further investment from Italy and Luxembourg - two European countries largely untapped so far, Indonesian Vice President Boediono said Thursday.

Speaking after a meeting with representatives of 14 Italian companies at the Hassler Roma Hotel in Rome, Boediono said Italian businessmen had expressed an interest in doing business or in continuing to expand their existing operations in Indonesia.

Some of the 14 Italian companies have already established joint ventures in Indonesia in various fields, ranging from oil and gas exploration, coal mining, engineering and construction, to leather production.

ENI Indonesia Ltd., one of energy giant ENI SPA's subsidiaries in Indonesia, for example, has completed its gas and oil exploration in Ambalat waters in East Kalimantan.

"The oil and gas production there is already in the pipeline. It .., is still waiting for certainty," Boediono said, referring to border areas in Ambalat currently in dispute between Indonesia and Malaysia.

Other Italian companies invited to the meeting included Assorcarboni and Enel SPA, which both specialize in coal imports, Allilauro SPS (in maritime transportation), Fiat Group (automotive industry), Ponte de Archimede SPA (in alternative and eco-friendly energy development) and Trevi SPA (in drilling and foundation engineering services).

The meeting was held on the sidelines of Boediono's visit to Italy to attend the Food and Agriculture Organization's World Summit of Food Security at the FAO headquarters on Wednesday in Rome.

During the visit, Boediono was accompanied by Agriculture Minister Suswono and Investment Coordinating Agency (BKPM) chief Gita Wiryawan, who joined the Vice President's entourage after visiting Luxembuorg.

Gita said a similar interest had been expressed among businessmen from Luxembourg, especially in the coal business.

"Around 50 percent of Luxembourg's coal imports are supplied by Indonesia," Gita said, without providing details on the volume.

Indonesia has become the largest coal exporter to Italy, with a current market share of 30.9 percent.

In 2004, Indonesia's coal exports to Italy reached US$314.9 million. This figure jumped to $959.9 million in 2008.

Exports in the January-May period in 2009 dropped by 20 percent from the corresponding period in 2008, but this decline affected all coal exporters to Italy.

Given the promising response among investors in Italy and Luxembourg, Gita said the Indonesian government would do its best to improve bilateral trade with the two countries.

Gita further said foreign investment commitments registered with BKPM had reached $13 billion so far this year, adding that only a fraction of this amount had come from Italy.

Indonesia Information Technology Report Q4 2009 - New Report Published

New report provides detailed analysis of the Information Technology market

Companiesandmarkets.com and OfficialWire, by Press Office, Published on November 20, 2009

The Indonesian IT market should grow at a compound annual growth rate (CAGR) of around 13% over 2009-2013 despite a deceleration in 2009, with demand in key segments affected by the global economic crisis. In H109, some manufacturing organisations deferred IT procurements, but there was continued spending in the financial sector, which had previously accounted for as much as 30% of total spending.

Demand is expected to pick up in 2010, and return to double-digit territory by 2011.

Government spending is expected to increase this year, and some fundamental drivers, including low computer penetration and growing affordability, should ensure that the market remains in positive growth territory. Indeed, Indonesia is projected to be one of the best regional IT market growth prospects over BMI's five-year forecast period. 2009 has undoubtedly brought more caution, however, with pressure for cutbacks as companies focus more on the bottom line and immediate needs.

By 2013, Indonesia's hardware-dominated IT market is projected to reach a value of US$5.7bn, displaying faster growth than many Association of South East Asian Nations (ASEAN) neighbours. With information and communication technologies (ICT) penetration of only around 20% and development restricted to richer areas such as Java, the market has much latent growth potential. However, the country's uneven development, and resultant digital divide, is a major barrier to faster growth within this potentially huge IT market.

Industry Developments

In H109 a ministerial decree directed that local government offices across Indonesia must adopt open source software (OSS) by 2011. The mayor of Surabaya revealed in July 2009 that his city had launched a pilot project for OSS applications. According to the mayor, all Surabaya municipal offices were now using the software, and civil servants had been given relevant training. The local government hoped that the municipality could save between 20% and 25% of its budget.

E-government is expected to emerge as an area of growing opportunity for IT vendors over the next couple of years. Currently, several ministries at both federal and province level are planning to implement projects. In 2008, a number of projects were launched, including an e-procurement system by the State Ministry for State Enterprise, which covered 25 state-owned enterprises, including state oil and gas company Pertamina and state electricity company Perusahaan Listrik Negara (PLN).

The government is also rolling out new e-learning initiatives, which could see education's share of the local IT spending rise from its estimated level of around 4%. The current ratio of PCs to students in public schools is around 1:3,200, and the government wants to increase this to 1:20. As there are 53mn students in Indonesia's schools system, this would require at least 2.5mn computers.

Indonesia Information Technology Report Q4 2009 © Business Monitor International Ltd Page 6 Competitive Landscape Multinational vendors dominate the Indonesian brand PC market leaders, with Acer currently boasting the edge in both notebook and desktop segments. In addition to HP and Acer, the rest of the top five comprises of Dell, Lenovo and Zyrex. While locally assembled 'white boxes' still claim up to 60% of the local PC market, a number of local PC and notebooks brands also enjoy increasing success, including Zyrex and Ion.

Acer is thought to have a market share of more than 40% for notebooks. In 2009 the Taiwanese vendor continued to expand its presence across both notebook and desktop segments with more product releases.

Meanwhile, HP has pledged to reclaim top spot in the Indonesian market from Acer at some point in H110 and has been aggressive in launching new notebook and netbook series.

IT services vendors have reported a growing demand in the telecoms, manufacturing and banking sectors.

Oracle has an agreement with local IT solutions provider PT Sigma Cipta Caraka (Sigma) to provide outsourcing services. Meanwhile, e-government is also being eyed by IT services vendors as a potential growth area. Tata Consultancy Services (TCS) said that it had targeted the government as a future growth driver in the Indonesian market. Currently, TCS's 15 local clients are principally from sectors such as banking and financial services, telecoms and media.

Hardware

The report forecasts 2009 Indonesia computer hardware spending of around US$2.5bn, up from US$2.4bn last year. Growth decelerated in 2009 and is forecast to be in low single digits this year before ticking up again in 2010. Double-digit growth is expected to resume in 2011, with the market rising to a value of nearly US$4.0bn by 2013.

Early results for 2009 were encouraging, due largely to notebook sales, which surged thanks to the popularity of netbooks; notebook sales grew faster than desktops in H109. In the current environment, the most promising growth driver is perhaps the consumer segment, which accounts for around 25% of computer demand. The main drivers are growing affordability and more credit availability.

Software

For 2009, software sales are projected at US$402mn, up from an estimated US$377mn in 2008, despite the current economic slowdown. There were signs in H109 that many firms planned to increase software spending. One market inhibitor is the continuing software piracy problem, which, by the local government's own figures, loses Indonesian software companies alone more than US$100mn a year.

Over the forecast period, enterprise resource planning (ERP) software continues to be of most interest to the small and medium-sized enterprises (SMEs) market as currently only around 20% of Indonesian SMEs are estimated to make use of IT.

IT Services

Indonesia's IT services market is projected to be worth US$589mn in 2009, recording year-on-year (y-oy) growth of 4% from US$564mn in 2008. Currently, IT services account for only 17% of the country's hardware-centric IT market sales. Hardware deployment services remain the largest Indonesian IT services category, with approximately a 20% share.

In 2009, the banking sector continued to provide opportunities for IT vendors, despite the fallout from the global financial crisis. Banks continued with transformation strategies driven by factors such as new technologies & services and regulatory compliance. However, most opportunities are currently in fundamental service areas such as system integration, support systems, training, professional services, outsourcing and internet services.

E-Readiness

Low telephone line density, high charges and low PC penetration are all significant obstacles to higher internet penetration. However, the picture is not all bad as there are signs of faster growth in user numbers, and recent surveys have shown that, among a very small elite, there is fast adoption, by regional standards, of broadband and a willingness to pay for video conferencing, security and other additional features. The government is encouraging fixed wireless deployments, including WiMAX, to bring the internet to more remote areas.

The government is also rolling out an internet-based National Education Network, which involves 1,000 network points in five clusters nationwide, designed to facilitate the use of the internet in schools. Despite some advances in e-education, constraints remain due to poor infrastructure and lack of public awareness in a country where only 20mn people own fixed-line telephones.

Japan to Fund Procurement of Dredgers

Tempo Interactive, Friday, 20 November, 2009 | 16:31 WIB

TEMPO Interactive, Makassar:The Japanese government is ready to disburse Rp 6 billion for the procurement of dredging boats for the South Sulawesi provincial government in 2010.

Pompengan-Jeneberang Chief of Program and Evaluation, Widiarto, said the dredger procurement was included in a series of negotiations between the South Sulawesi provincial government and Japan. Dredgers are required to reduce the increased sedimentation in Bilibili dam in Gowa regency.

“We have negotiated with Japan. The tender for the dredger procurement project will take place in 2010,” Widiarto said when contacted by Tempo yesterday.

According to Widiarto, the dredging of Bilibili dam has become urgent since it is one of the water suppliers in Makassar and Gowa regency.

Widiarto said the dam sedimentation has now reached 75 million cubic meters. Yet, the dam can only store 375 cubic meters of water. He is concerned that the dam capacity will continue to be reduced if it is not dredged.

Furthermore, Widiarto is also worried about a potential landslide from Mount Bawakaraeng which is predicted to throw up 137 cubic meters of mud into the dam. “Dredger procurement will be a good solution,” he said.

South Sulawesi chief of Water Resources Supply Office, Soeprapto, said the dredger will not only be used to anticipate increasing sedimentation in the Bilibili dam, but it is also expected to be the solution for smooth operation of secondary water channels in some areas, including for the Makassar canal. “We hope it can be realized by 2010,” he said.

There is in fact a 14 kilometer-long canal in Makassar, extending from the east to the south. The once five-meter-deep canal is in unusable condition because it is now only two meter deep due to sedimentation caused by garbage.

Not much has been done by the municipality government since only Rp 400 million was allocated to clean the canal. “Such an allocation is only enough to pay 100 cleaning staffs,” lamented Makassar Public Works Office chief in charge of Water Development, Baharuddin. Hence, he hopes that if the canal is dredged, the funds can be taken from the provincial budget.

Earlier, South Sulawesi governor Syahrul Yasin Limpo had asked the Public Works Department to lend them their dredger. This was rejected, claiming that the dredger that they have was being used by Jakarta government to clean water channels.

TRI SUHARMAN

Indonesia, Australia eying expansion of business, trade

The Jakarta Post, Jakarta | Fri, 11/20/2009 9:02 PM

Investment Coordinating Board chairman Gita Wirjawan and deputy trade minister Mahendra Siregar will brief 150 Indonesian and Australian businesspeople at a two-day conference in Yogyakarta on new business opportunities within bilateral economic ties.

The annual conference of the Indonesia Australia Business Council (IABC), beginning Monday, will discuss new ways of further developing business ties between the two countries amid the green shoots sprouting in the industrialized economies and a robust recovery in Indonesia.

“The perception among Australian businesspeople towards Indonesia is quite positive, and they are looking forward to even better trade and investment opportunities during President Susilo Bambang Yudhoyono’s second administration,” IABC executive director Vic Halim told The Jakarta Post on Friday.

The meeting will discuss issues related to natural resource and infrastructure development, tourism, small and medium-enterprise partnership, taxation, financing and labor regulations.

Indonesia was Australia’s 13th largest trading partner last year, with two-way trade of merchandise (commodities) and services totaling about US$10 billion.

Indonesia is Australia’s 18th largest investment destination with a cumulative stock of capital investment amounting to nearly $4 billion.

Irish business to manage Sabang port

The Jakarta Post, Jakarta | Thu, 11/19/2009 1:10 PM

After years of uncertain negotiations, the Ireland-based Dublin Port Company has signed an 18-month business contract with the government to take control of the management of Sabang international port in Nanggroe Aceh Darussalam.

Representatives from Aceh administration and Dublin Port signed a Memorandum of Understanding (MoU) in 2006 to jointly develop the port but no significant developments took place since then.

The agreement was signed on Nov. 13, allowing Dublin Port - through its partner HD Asia Maritime - to take part in the port's management, replacing state-owned port operator PT Pelabuhan Indonesia (Pelindo) I.

Under this agreement, the world's 12th largest port operator would handle all the port's operations and improve facilities, including the container yard, storage facilities, warehouses, and cargo terminals.

"We will also provide top-class security services for the port's customers and carry out marketing promotions to bring more ships to Sabang," said Bernardus R. Djonoputro, the CEO of consulting company HD Asia Advisory, HD Asia Maritime's parent company, during a media conference Wednesday.

The appointment of Dublin Port came as the port is embarking on a massive overhaul that could cost up to Rp 8.8 trillion (US$896 million) up until 2015 at the latest.

Sabang port is operating two piers, each is 180 meters long and 12 meters wide, capable of accommodating ships with dead weight capacity of up to 10,000 tons, with the administration now preparing to build a third pier stretching 423 meters using Rp 1 trillion of state funds.

"The construction of the third pier will finish in 2011," Sabang Area Management Body (BPKS) deputy chairman Nasruddin Daud said.

The final target is to upgrade the port with a total of 2,617 meters of piers, with the government expecting foreign investors to take part.

One of them could be Dublin Port, Bernardus said, adding that the operator was ready to disburse up to $600 million on upgrading.

"We'll see what will happen after this first phase of cooperation. It's very possible for us to invest in developing the port's infrastructure."

Sabang port is 1.4 kilometers in length and 0.8 kilometers wide with a one hectare container yard.

"Today, goods are docked at Belawan port in Medan and carried by trucks to reach Banda Aceh, 620 km away," Nasruddin added.

Banda Aceh is located about 35 miles south of Sabang. "We can save a lot of money if the goods can directly reach Sabang," he said. (bbs)

PLN to tender 4 power plants under 2nd crash program

Alfian , The Jakarta Post, Jakarta | Fri, 11/20/2009 1:05 PM

State utility company PT PLN plans to open tenders for construction of four power plants with the total capacity of 1,648 megawatt (MW) next year, a director said.

"All the power plants are included in the second phase 10,000 MW electricity crash program. We expect to open the tender for the construction in 2010," PLN's planning and technology director Bambang Praptono told reporters Thursday.

The four power plants are: the 1,000 MW Cisokan power plant in West Java; the 2x100 MW New North Sumatra power plant in North Sumatra; the 2x174 MW Asahan III power plant in North Sumatra; and the 2x50 MW Parit Baru power plant in West Kalimantan, he added.

Bambang said the construction of these power plants would require as much as US$1 billion for the Cisokan power plant; $500 million for the New North Sumatera power plant; $300 million for the Asahan III power plant; and $250 million for the Parit Baru plant.

"As for the Cisokan power plant, we have got a $1 billion loan commitment from World Bank. We will open the tender for its construction next year and the power plant is expected to be on stream between 2013 and 2014," Bambang said.

The remaining projects may be financed by Japan International Cooperation Agency (JICA) and by a consortium of banks from China, he added.

The government launched the first 10,000 MW power project in 2006, in a bid to anticipate increasing demand for electricity, which has been growing by at least 7 percent annually.

The second phase 10,000 MW program is being planned now and is scheduled to be implemented between 2010 and 2014.

In a presentation in August, PLN said the projects under the program were expected to generate a total electricity capacity of 10,580 MW. Of this capacity, 5,685 MW will be located in Java and the remaining 4,895 MW will be outside Java.

The construction of the power plants under the project will require $10 billion, PLN's president director Fahmi Mochtar said Oct. 20.

Bambang said that one of the power plants under the second 10,000 MW project, the 120 MW Lahendong IV geothermal power plant in North Sulawesi, has already secured a financing commitment and has selected the engineering, procurement, and construction (EPC) contractor.

The $30 million power plant will be financed by a loan from Asian Development Bank (ADB), while its EPC will be done by Sumitomo.

Under the second crash program, it is proposed that 12 percent of the power generated will be generated by hydro plants, 48 percent from geothermal plants, and 14 percent from gas plants, and the remaining 26 percent from coal fired plants.

Under the first 10,000 MW program, all the proposed power plants were coal-fired.

Indosat extends sea cable system to Singapore

Antara News, Tuesday, November 17, 2009 21:17 WIB

PT Indosat. (ANTARA/Ardika)Jakarta (ANTARA News) - Telecommunication operator PT Indosat Tbk will spread the sea cable communication system or SKKL to connect Jakarta, Pontianak, Batam and Singapore which will be used for the internet-based protocol (IP) or non IP services.

PT Indosat president director Harry Sasongko after inaugurating two new telecommunication backbones here Tuesday, said that the marine cable system is 1,300 km long.

"With this additional marine cable systems, Indosat will have additional bandwidth capacity at the early stage of 80 Gbps which will be used for both IP-based services (Internet Protocol) and the non-IP," he said.

The SKKL installed by Indosat in cooperation with NEC has a four landing points on the islands of Tanjung Pakis (Karawang, West Java), Sungai Kakap (Pontianak, West Kalimantan), Tanjung Bemban (Batam), and Changi (Singapore).

"The fiber-optic network will be able to anticipate the possibility of the very large demand until the Gbps (Giga bits per second)," he said.

In addition, the network is expected to serve as a redundant or back up for the existing international network.

"All cable systems FO or fiber optic Indosat has used ring system or redundant, so if there is a break in the cable, it will be immediately backed up by another network," he said.

Meanwhile, the Indonesian ambassador to Singapore, Ali Wardana said, at least 158 thousand Indonesian people live in Singapore so that the existence of the SKKL has a potential to increase relations between the two countries.

BTN aims for Rp 2.6t from IPO

Nani Afrida , The Jakarta Post, Jakarta | Thu, 11/19/2009 9:38 PM

State-owned bank PT Bank Tabungan Negara (BTN) officially announced Thursday a plan to sell 27 percent of its stakes through its initial public offering (IPO).

BTN treasury director Saut Pardede said the bank expected to raise substantial fresh capital, which it would use to expand its business.

“The range is about Rp 1.8 trillion to Rp 2.6 trillion depending on the share prices,” he said.

Mandiri Sekuritas and CIMB Sekuritas will be underwriting the IPO.

Mandiri Sekuritas’ director of investment banking, Iman Rahman, said shares would be offered at between Rp 750 and Rp 1,100.

“We plan to register our first initial public offering at the Indonesia Stock Exchange (IDX) on Dec. 17. The book building starts today and ends Dec. 3,” Iman said, adding that BTN would also offer stakes to foreign investors.

“We will have investor road shows in Asia and Europe,” Iman said.

Women in Makassar Have Opportunity to Study in the Netherlands

Tempo Interactive, Wednesday, 18 November, 2009 | 14:47 WIB

TEMPO Interactive, Makassar: The Nuffic Netherlands Education Support Office (Neso) in Indonesia is awarding scholarships for people in Makassar to study in the Netherlands. This program prioritizes women.

A Neso member of staff, Ariono Hadipuro, said that applicants from eastern Indonesia can apply through a pre-registration system.

The system allows applicants from eastern Indonesia to have TOEFL of 475 at minimum while applicants from western Indonesia have to have TOEFL of more than 550.

During the educational exhibition yesterday (17/11), Ariono said that 50 percent of the quota for master and short-course programs are for those from eastern Indonesia. Half of this is provided for women.

The Dutch government is allocating 30 million Euro for the scholarship program over the next five years.

“It is committed not to reduce the program budget even though there is a financial crisis,” said Ariono.

SUKMAWATI | HAPSA MARALA

PLN to fine contractors delaying projects

Antara News, Thursday, November 19, 2009 17:24 WIB

Jakarta (ANTARA News) - State-owned electricity company PLN will fine contractors delaying the completion of their projects under the 10,000 megawatt (MW) power plant projects, a PLN director said.

PLN`s director for strategic construction affairs Agung Nugroho said here on Thursday that the fine would be imposed on contractors who could not show acceptable reasons of the delay.

"The fine has been stipulated in the contracts," he said.

He said that the fine amounts up to five percent of the total contract value, which comes to one per mill per day.

In the meantime, contractors could also lodge a complaint if PLN delayed payments.

PLN estimated that only about 915 MW of the projected 1,890 MW under the 10,000 MW mega project crash program would be completed at the end of this year.

PLN to get Rp 1.5 trillion loan from BRI to build more power plants

Alfian, The Jakarta Post, Jakarta | Wed, 11/18/2009 12:51 PM

State power firm PT Perusahaan Listrik Negara (PLN), currently riddled with power blackout problems, will soon secure a Rp 1.5 trillion (about US$160 million) loan from Bank Rakyat Indonesia (BRI) for construction of four power plants under the government's 10,000 megawatt (MW) electricity crash program.

The four power plants are t a 2x10 MW Power Plant, the 2x7 MW Riau Selat Panjang Power Plant, the 2x7 MW Tanjung Balai Karimun Power Plant, and the 2x50 West Kalimantan Power Plant, PLN's director Fahmi Mochtar said in a text message on Wednesday.

"The loan has a maturity period of ten years. We are still waiting for the approval from the finance minister. We expect to sign the loan agreement in December," Fahmi said.

The 10,000 MW program was launched by the government in 2006 in a bid to anticipate the increasing demand of electricity which reach about 7 percent a year. The projects consists 35 power plant sites, with 10 of them located in Java and the remaining 25 located outside Java.

Indonesia Lifts Import Duty on Materials for Key Industries

The Jakarta Globe, Dion Bisara & Irvan Tisnabudi

Tourism is among the seven key service industries set to benefit from the lifting of import duties. (Photo: Adek Berry, AFP)

In a bid to boost investment and increase global competitiveness, the government on Wednesday scrapped the 5 percent import duty normally imposed on machinery and raw materials for seven vital service industries.

The Ministry of Finance said the regulation would take effect on Dec. 16 and would remain valid for two years before being re-evaluated.

The regulation covers transportation, telecommunications, public health, tourism and culture, as well as supporting services for mining, construction and ports and harbors.

Anggito Abimanyu, the Finance Ministry’s head of fiscal policy, said a similar tax break had been given to the manufacturing industry as part of the government’s Rp 73.3 trillion ($7.9 billion) fiscal stimulus package this year.

It was intended to help domestic companies compete in the global market and to attract investment.

“We decided to scrap the import duties for manufacturing industries to encourage domestic industries to open new plants or businesses,” Anggito said.

Jeffrey Mulyono, the head of the coal and geothermal commission at the Indonesian Chamber of Commerce and Industry (Kadin), said he welcomed the move.

“The existence of these [seven service industries] should be supported and [they should] have their taxes lowered to the lowest level possible, which will be beneficial for the local producers as well,” Jeffrey said.

“The Finance Ministry has finally fulfilled the wishes of local businesses by doing this,” Jeffrey added.

However, Erwin Aksa, the chairman of the Indonesian Young Entrepreneurs Association (Hipmi), said the removal of the import duty would not greatly benefit domestic industries until the government was able to provide sufficient basic infrastructure, especially power.

“As good as it is, the incentive will not immediately increase investment because what we really need now is electricity to be available and reliable,” Erwin said, referring to the power outages which have plagued the Great Jakarta area over the past two months.

Companies wishing to take advantage of the reduced import duty must contact the Investment Coordinating Board (BKPM).