Ternate`s Orange fort soon to be renovated

Ternate, (ANTARA News) - The Orange Fort, a colonial heritage in Ternate, North Maluku (Moluccas) would soon be renovated with Rp2 billion fund taken from the 2008 state budget as it seemed to be neglected. 

"The Orange Fort will soon be renovated. The Rp2 billion fund from the central government is now in a tendered contract process," the Chief of Ternate`s tourism and cultural office, Arifin Umangsaji, said here Sunday. 

The Orange Fort was built in the 16th century by the Dutch government when they colonized Ternate. In Ternate, similar forts were also built by Portugal and Spain during their ruling times. 

Arifin said the Orange Fort renovation would raise its function for scientific needs and tourist attraction in the area. 

The Orange Fort is located in the center of Ternate city, and has become the center of attention of many people due to the concerning condition of the valuable historical heritage. 

Meanwhile, a Ternate history observer, Djafar Noho S.pd, wished that the Fort`s renovation should be done precisely to keep its originality as a historical relic. 

Contractors should involve experts dealing with historical renovation and consult with Ternate`s royal family who knows the fort very well. 

"I hope the renovation deviation case in Kastela fort several years ago will not recur on the Orange Fort. This has to be the contractor`s attention and everyone relevant to this renovation project," he said.

Govt declares 10 regions top tourist destinations

Sungailiat, Bangka (ANTARA News) - The Indonesian government has declared ten regions in the country top tourist destionations in a move to boost the national tourism industry. 

"The policy to declare ten regions top tourist destinations will hopefully encourage each of the regions to improve their performance in developing their respective tourism potentials," Wibowo, a deputy drector general at the Culture and Tourism Ministry, said here at the weekend. 

The ten regions are North Sulawesi, South Sulawesi, West Nusa Tenggara, East Nusa Tenggara, West Sumatra, North Sumatra, Riau Islands, South Sumatra, East Kalimantan and West Irian Jaya, he said. 

"Every year we make an evaluation of the regions to be declared top tourist destinations by taking into account various aspects, namely natural potentials, infrastructure facility and the local people`s way of thinking," he said. 

He said Indonesia had 33 tourist destination areas stretching from the country`s western-most province of Nanggroe Aceh Darussalam to the country`s eastern-most province of Papua. 

"Of the total, only 16 tourist destinations are able to attract 90 percent of local and foreign tourists, including the ten top tourist destinations," he said. 

The 16 tourist destinations are Bandung, Jakarta, Yogyakarta, Batam, Bali, Toba, Karakatau, Tana Toraja, Lombok, Semarang, Java, West Sumatra, Manado, Sangalaki, Komodo and Kupang, he said. 

"The figure suggests that there is still a gap among tourist destinations. That`s why there need to be directives and policies to develop the tourist destinations in a concrete way," he said.

Jumeirah announces 19 hotels under development

AME Info 

Jumeirah Group, the Dubai-based luxury hotel company that manages the world famous Burj Al Arab, announced today at the Hotel Investment Conference Asia Pacific (HICAP) that it had signed five new hotels in the last two weeks, bringing the total number of new properties under development to 19. 

This latest announcement came with the appointment of Jumeirah to manage Jumeirah Bali Resort in Indonesia, Jumeirah Maldives Resort in the South Malé Atoll, Jumeirah Al Salam Resort in Bahrain, Jumeirah Al Salam Yiti Resort in Oman, and Jumeirah Messilah Beach Hotel in Kuwait. The five new hotels and resorts are scheduled to open over the next three years. This comes in addition to recent announcements of hotels in Guangzhou, Glasgow and St. Thomas, US Virgin Islands. 

'With the support of our parent company, Dubai Holding, we are well on target to achieve our objective of globalising our luxury brand, and we expect to have 60 properties either in operation or under development by 2012,' said Gerald Lawless, Executive Chairman of the Jumeirah Group. 'Our discerning guests first experienced the Jumeirah STAY DIFFERENT promise in Dubai, then in London and New York, and we look forward to soon welcoming them to our luxury hotels around the world.' Jumeirah currently manages 11 hotels and resorts. 

Jumeirah Bali Resort is being developed by PT Bali Nusa Intan. The luxurious, mixed-use development is situated on the southernmost point of the island, in the prestigious Sawangan area and will include a five star hotel and luxury villas, together totalling 225 rooms and suites. In addition the resort will offer three restaurants and bars, a wedding chapel and a destination spa, managed by Talise Wellness, the Group's global spa and wellness brand. 

Jumeirah Maldives Resort, developed by EoN Resorts Group, will welcome its first guests in 2010 and is located in the South Malé Atoll. The iconic world-class luxury resort will be built around the principles of sustainable development, a commitment that will be reflected throughout the life cycle of the project, and will feature 48 beach villas and 43 water villas serenely scattered on a tropical island. Facilities will include four restaurants and bars, a health club and Jumeirah's signature Talise Wellness spa, as well as a fully equipped dive centre. 

Sama Dubai is developing both Jumeirah Al Salam Resort in Bahrain and Jumeirah Al Salam Yiti Resort in Oman, which are scheduled to open in 2010. Jumeirah Al Salam Resort in Southern Bahrain will consist of a 293-room hotel, seven hotel villas (divisible into 56 guest rooms and 21 suites), 33 spa suites and a large convention centre. The prestigious resort is located on 300 metres of private beach and will also offer one indoor and three outdoor swimming pools, eight restaurants and bars and extensive business and spa facilities. Jumeirah Al Salam Yiti Resort is located just south of Muscat and will comprise of a 202-room hotel and 148 chalets. The well appointed resort will also feature five restaurants and bars, banqueting and conference facilities, swimming pool, fitness centre, tennis courts and Talise Wellness spa. 

Jumeirah Messilah Beach Hotel, located in Kuwait City, is being developed by Al Aziziah United General Trading and Contracting and is scheduled to open in 2010. The luxurious beachfront development will feature 395 rooms and suites, including 80 serviced apartments and 12 chalets. The hotel has direct access to a 200 metre private beach and will feature extensive conference and banqueting as well as spa facilities, a swimming pool, a children's play area and six restaurants and lounges.

Related Articles:

Asian twist to meet techno show at beach games start

Minister: Tourism already restored in Indonesia

Dutch-made corvette for Indonesian Navy sails to Indonesia

Jakarta (ANTARA News) - A Sigma-class Corvette III built in the Netherlands for the Indonesian Navy is scheduled to sail to Indonesia on Saturday (Oct. 18), a Navy spokesman said.

The corvette was officially delivered to the Indonesian Navy at a ceremony at the Schelde shipbuilding yard in Vlissingen, the Netherlands, recently. 

The Indonesian Navy was at the ceremony represented by Rear Admiral Lilik Supramono, commander of the Indonesian Navy`s Eastern Fleet, according to Commodore Iskandar Sitompul, spokesman of the Indonesian Naval Headquarters, who is now in the Netherlands, in a phone interview with ANTARA. 

"It`s expected the corvette baptized KRI Iskandar Muda will arrive in Indonesia on December 2, 2008, and take part activities to mark the Navy`s Anniversary on December 5," he said. 

Indonesia had ordered four missile-equipped corvettes from the Schelde naval shipyard in the Netherlands in January 2004. The first ship arrived in August last year, the second early this year, while the fourth ship is expected to arrive mid 2009. 

The first and second Sigma-class corvettes were named respectively KRI Diponegoro and KRI Hasanuddin during the visit of Defense Minister Juwono Sudarsono and Naval Chief of Staff Admiral Slamet Soebijanto in the Netherlands on September 14-18, 2006. 

The third Sigma-class corvette, KRI Sultan Iskandar Muda, was baptized by Commander of the Indonesian Defense Force (TNI) Marshal Djoko Suyanto in the Netherlands.

Indonesia to partcipate in DEMA Show 2008 in US

Jakarta (ANTARA News) - Indonesia, represented by the Tourism and Culture Department, will promote the marine tourism potentials of its eastern regions at a Diving Equipment and Marketing Association (DEMA) Show 2008 which is to take place on October 22 to 25 at the Las Vegas Convention Center in the United States, a tourism official said. 

"For 2009, we are planning to develop marine tourism such as diving. Therefore, we will participate in the DEMA Show 2008 and bring along 72 participants," Sapta Nirwandar, director general of marketing affairs at the Tourism and Culture Department, said here Friday. 

Nirwandar said the Indonesian delegation to the show would be led by him and consist of representatives of the regional administrations of North Sulawesi, East Kalimantan, Wakatobi, North Maluku, Central Sulawesi and Raja Ampat (West Papua). 

The delegation would also include 22 tourism and airline industry representatives and journalists from print and electronic media. 

"Most of the participants will came from around Manado, North Sulawesi," he said. 

Indonesia would use 32 booths inside the Indonesia Pavilion at DEMA 2008, and the interior of the pavilion would show the logos of "Ultimate in Diversity" and "Visit Indonesia Year 2008". 

"We hope by participating in events like DEMA 2008, we can encourage more and more tourists to come to Indonesia and support the Visit Indonesia Year 2008 program," he said. 

At the DEMA 2008, Indonesia would also publicize the program of the World Ocean Conference which will be held in Manado, North Sulawesi, in May, 2009. 

Nirwamdar said the United States was one of the most potenitial markets for Indonesia`s tourism. 

A total of 160,000 to 180,000 US tourists were expected to visit Indonesia in 2008. 

As per August 2008, some 103,324 American tourists had visited Indonesia. The figure represented an increase of 26.39 percent from the same period last year.

PLN project attracts Middle East investor

Alfian, The Jakarta Post 

A Middle East consortium, Mine Power Holding BSC, is vying for a US$200 million coal-fired power plant project in Indonesia, state power firm PT PLN said on Thursday. 

President director Fahmi Mochtar said the consortium would take part in a beauty contest organized by PLN to win the project, located in Cirenti district, Riau Province. 

"The consortium is among four potential investors that have passed our pre-qualification assessment. We will further examine their proposals, in particular their financial capacity," Fahmi said. 

Fahmi added the power plant, with the capacity of 200 megawatt (MW), was located near a coal concession owned by state coal mining company PT Bukit Asam. 

"The investor will need about $200 million to build a power plant with that capacity," he added. 

The consortium, in a joint venture with local contractor PT Ridlatama Energy, has the financial backing of the Islamic Development Bank, he added. 

He did not name the other three participants but did say that the company was happy with the interest expressed. 

"We are very pleased, especially under the current global financial crisis." 

Indonesia is actively looking for Middle East investors for its energy projects as they are less exposed to the current financial turmoil, Energy and Mineral Resources Ministry Purnomo Yusgiantoro said on Oct. 8. 

So far however, the Middle East-based investors are yet to make any investment in Indonesia's power projects, according to PLN vice president Rudiantara. 

The winning bidder will become the project owner and operator as an independent power producer (IPP) that will then sell its power to PLN -- the country's sole distributor of electricity. 

IPPs contribute around 14 percent to the total power supply in the country. 

Fahmi said IPP development was often hampered by financial problems, even more so now that the world was having a financial crisis with liquidity drying up, making it even harder to secure financial commitments.

Chevron, ConocoPhillips, Husky to invest $91m in oil and gas blocks

Alfian and Olivia Dameria, The Jakarta Post

Three global energy giants -- Chevron Corp, ConocoPhillips and Husky Energy Inc -- won new oil and gas exploration rights in the country on Friday and pledged total investment of at least US$91.4 million during the next three years. 

The three are among the winners of 22 new oil and gas blocks announced by the Energy and Mineral Resources Ministry Friday.

Chevron, through its subsidiary Chevron Indonesia Ventures Ltd, won the rights to explore two blocks in West Papua. For the first three years of exploration, it is committed to spend $24.5 million of investment in each field. 

ConocoPhillips, meanwhile won exploration rights in the Arafura Sea block and will need to invest $30 million in the first three years. 

The investment commitment from Canada-based Husky Energy Inc is expected to be $12.4 million, to be used to back three years of exploration activities in the North Sumbawa II block. 

For the 22 blocks, the government expects to mobilize a total investment of $375,5 million, said director general for oil and gas, Evita H. Legowo. 

Evita said the government offered the blocks through the direct offer mechanism, under which interested investors propose to the government to undertake a joint study to assess oil and gas reserves in one or more particular blocks. 

Once the studies find positive indications of reserves, then the government opens a bidding process, although the first bidding rights will be given to the company that proposed, financed and undertook the study. 

"The fact that Chevron and ConocoPhillips are still interested in these blocks shows that our production sharing contract (PSC) scheme is still attractive for investors," said R. Priyono, head of upstream oil and gas regulator BPMigas. 

Under the PSC, the government and companies concerned share the output of the block. The government's share from the projected output from these 22 blocks would be between 65 and 85 percent for oil and between 60 and 70 percent for natural gas. 

However the scheme also includes the much reported cost-recovery mechanism which requires the government to allow the companies to recover specific expenses spent by operators related to exploration activities. 

Indonesia has adopted the PSC system for more than 40 years, but lately the system has drawn some criticisms over the large expenses paid to oil and gas operators under the cost recovery provisions. 

On Friday, the government also opened a tender for 31 new oil and gas blocks, 16 of which were offered through regular tenders with the remaining blocks through the direct offer mechanism.

Niko Obtains Offshore Exploration Acreage in Indonesia

NIKO RESOURCES LTD NKO10/17/2008 9:00:57 AM 

CALGARY, ALBERTA, Oct 17, 2008 (Marketwire via COMTEX News Network) -- 

Niko Resources Ltd. (TSX:NKO) is pleased to announce that the Indonesian government has provisionally awarded Niko and its partners four blocks covering almost 20,000 square kilometers. In two of the blocks, Niko will be operator and earn a 51% working interest. In the two other non-operated blocks, Niko will earn a 25% working interest. Each of the Blocks is approximately 5,000 square kilometers and located primarily in deep water. These blocks represent prime acreage selected from extensive geologic and geophysical evaluations covering one million square kilometers, an area the size of Texas and California combined. 

The acquisition of these blocks will establish Niko as a leading company in the exploration of the largely unexplored deep water areas offshore Indonesia. Considering the overwhelming success in finding oil and gas in shallow water and onshore areas of Indonesia, there is potential that Indonesian deep waters will provide successes similar to those seen in the deep waters of India, Brazil, Gulf of Mexico and West Africa to mention a few. 

The 2 blocks operated by Niko are in the deep waters of the prolific Kutei Basin where over 7 billion barrels of oil equivalent have been proved to date on land and in shallow water. This area will see a significant amount of drilling by major oil companies over the next 2 years verifying the high expectations held by the industry. The 2 non-operated blocks are also associated with areas containing in excess of 2 billion barrels of oil equivalent. 

Certain statements in this press release are forward-looking statements. Specifically, this press release contains forward-looking statements relating to management's approach to operations, estimates of future sales, production and deliveries, business plans for drilling and development, estimated amounts and timing of capital expenditures, anticipated operating costs, royalty rates, cash flows, transportation plans and capacity, anticipated access to infrastructure or other expectations, beliefs, plans, goals, objectives, assumptions and statements about future events or performance. The reader is cautioned that the assumptions used in the preparation of such information, although considered reasonable by Niko at the time of preparation, may prove to be incorrect. Actual results achieved during the forecast period will vary from the information provided herein as a result of numerous known and unknown risks and uncertainties and other factors. Such factors include, but are not limited to: general economic, market and business conditions; industry capacity; competitive action by other companies; fluctuations in oil and gas prices; the results of exploration and development drilling and related activities; the uncertainty of estimates and projections relating to productions, costs and expenses; uncertainties as to the availability and cost of financing; fluctuations in currency exchange rates; the imprecision in reserve estimates; risks associated with oil and gas operations, such as operational risks in exploring for, developing and producing crude oil and natural gas; risks and uncertainties involving geology of oil and gas deposits; the weather in the Company's area of operations; the ability of suppliers to meet commitments; changes in environmental and other regulations; actions by governmental authorities including changes in laws and increases in taxes; decisions or approvals of administrative tribunals; risks in conducting foreign operations (for example, political and fiscal instability or the possibility of civil unrest or military action in countries such as India and Bangladesh); the effect of acts of, or actions against international terrorism; and other factors, many of which are beyond the control of Niko. There is no representation by Niko that the actual results achieved during the forecast period will be the same in whole or in part as those forecast. 

SOURCE: Niko Resources Ltd. 

Niko Resources Ltd. Edward S. Sampson Chairman of the Board, President & CEO (403) 262-1020 Niko Resources Ltd. Murray Hesje VP Finance & CFO (403) 262-1020 Website: www.nikoresources.com

Indonesia gives exploration rights on 22 oil fields

www.chinaview.cn  2008-10-17  

JAKARTA, Oct. 17 (Xinhua) -- Indonesia has awarded rights for exploration on 22 oil-and-gas blocks to energy companies, including ConocoPhilips, Chevron and Husky Energy, a director at the energy ministry said here Friday. 

"It has been awarded 22 blocks to foreign and local companies," Evita Legowo, director at the ministry told Xinhua on telephone. 

The director said that a U.S. unit Chevron got a right to look for oil on onshore and offshore oil and gas blocks of West Papua I and West Papua II. 

ConocoPhilips was awarded offshore oil and gas block in ArafuraSea in Maluku province, and Husky Energy Inc got a right to offshore North Sumbawa II oil-and-gas block, in Nusatenggara province, said Evita. 

The director said that the total commitment of investment on the first three years of exploration was 375.5 million U.S. dollars. "In the first three years the companies must do activities (exploration), should they fail, it could be extended to another 6-year," she said. 

The government also gave the right to a consortium of Marathon Indonesia, a unit of Marathon Oil Corp, and Kanzai Oil on onshore and offshore block in Sulawesi. 

The rest of the fields were awarded to local and other foreign companies, she said. The country has also provided financial incentive in exploration to boost production. 

The growing population and economic activity in Indonesia, which leads to the rise of oil consumption, had made the country become a net oil importer since 2003, as it failed to find new blocks amid the aging wells which causes declining in production, according to Indonesian Minister of Mines and Energy Purnomo Yusgiantoro. 

Indonesia oil production has decreased to less than one million barrel per day since February.

Vale Board Approves $14.2 Billion 2009 Spending Plan

By Jeb Blount

Oct. 16 (Bloomberg) -- Cia. Vale do Rio Doce, the world's largest iron-ore producer, plans to spend $14.2 billion in 2009 to expand mining operations worldwide even as the company expects the global economy to slow in the coming quarters.

The 2009 plan, which includes investments in South America, Asia, Africa and the Middle East, is part of a larger effort to increase iron-ore output 69 percent to 500 million metric tons a year by 2015, the company said today in a statement. Vale also plans to expand nickel, coal, copper and alumina operations.

The global credit crisis has stoked investor concern that the world economy may be headed for recession, undermining commodity prices. Still, metals demand will continue to grow in the longer term along with emerging market economies, Vale said. 

"The financial shock and the ensuing credit supply slowdown imposes an additional and important restriction to growing the supply of minerals and metals, favoring large-scale, low-cost producers such as Vale,'' the statement said. 

Vale fell 2.1 percent in Sao Paulo trading before the plan was released. The stock has slumped 29 percent in the last month compared with the 21 percent decline of the Bovespa index that tracks the most-traded stocks on the Sao Paulo exchange. 

Of the total planned spending, $11.7 billion, or 82 percent, will be to complete existing mines and projects, with $3 billion for transport such as railways and ports, it said. Investment in non-ferrous metals such as nickel, copper and aluminum will receive $4.79 billion, and iron-ore is budgeted at $4.2 billion. 

Countries with projects include Brazil, Canada, Indonesia, Chile and Peru, as well as nations in Africa and the Middle East, it said. Vale plans to boost nickel output to 450,000 tons by 2015, 81 percent more than in 2007. 

``The rapid increase of the consumption of minerals and metals are an integral part of the long-term economic development,'' the statement said. 

To contact the reporter on this story: Jeb Blount in Rio de Janeiro at jblount@bloomber.net

Indonesia miners consider acquiring 35% of coal giant Bumi

Jakarta (ANTARA News/Asia Pulse) - A consortium of two Indonesia-based state mining companies - PT Aneka Tambang (Antam) (JSX:ANTM) and PT Tambang Batubara Bukit Asam (PTBA) (JSX:PTBA) - is studying the possibility of acquiring 35 per cent of the country's largest coal producer PT Bumi Resources (JSX:BUMI). 

The plan came after a dive in the share price of Bumi Resources, which plunged to Rp2,175 (US$0.224) earlier last week from its peak of Rp8,550 per share. 

The president of coal miner PTBA, Sukrinso, said the company had discussed the possibility of acquiring Bumi Resources with Antam, which operates in nickel, gold and bauxite mining.

President signs 'Perpu' to increase guarantee for depositors

The Jakarta Post, Jakarta 

President Susilo Bambang Yudhoyono has signed two government regulations in lieu of a law (perpu) to provide a better guarantee for depositors amid the worsening global financial crisis. 

The Finance Ministry said in a statement that with the regulations, the government increases the guarantee to cover deposits up to Rp 2 billion (US$204,000). Currently the government only guarantees deposits up to Rp 100 million. 

State Secretary Hatta Rajasa said earlier the President signed the regulation after a series of meetings with related officials on Sunday night and Monday morning at his residence at Cikeas, Bogor. 

The other perpu signed by Yudhoyono eased the requirements for banks to obtain bridging finance from Bank Indonesia. 

Currently, only near-cash debt instruments, such as Bank Indonesia Certificates and government bonds, can be used as collateral for banks to obtain bridging finance. 

With the new regulations, banks can now use their performing loans as collateral. This way banks will have more access to funding to improve liquidity. (rid)

Govt lays out tax incentives to help domestic industry

Alfian, The Jakarta Post 

To help bolster the competitiveness of domestic industries, the finance ministry has scrapped import duties on several raw materials for up to eleven industries, including shipbuilding and automotive components businesses. 

In a statement issued late last Friday, the ministry announced that the policy could have generated slightly more than Rp 1 trillion (US$106 million) in state revenue in the last three months of the year. 

"The incentive is given both to guarantee supply for domestic demand of consumer goods and to strengthen our real sector, in particular general and relevant industries," the ministry's head of public relations Samsuar Said said. 

Raw materials exempted from duty include those that are not produced domestically, or in insufficient volume. 

The eleven industries are: The airline, cruise, coal-fired power generator, shipbuilding, heavy equipment, automotive components, infuse, sorbitol, dairy processing, electronic components, and cold-rolled coil industries. 

Samsuar said the industries were chosen because their products were widely consumed domestically and because they employed large numbers of workers. 

The incentive is effective immediately and will be evaluated in three-months. 

The ministry has also scrapped a 10-percent tax on luxury goods for electronic products, in particular certain types of televisions, laundry machines and cameras. 

The policy applies to TVs smaller than 21 inches, washing machines with a capacity of between six and 10 kilograms of clothes and cameras priced below Rp 2 million. 

"All others are still subject to the tax, as the prices are still not affordable for most middle class consumers in the country," Samsuar said. 

Anggito Abimanyu, head of fiscal policy at the finance ministry, said the cut in luxury tax and import duties was aimed to "boost the real sector, reduce business costs." 

This is also expected to limit imports of unimportant goods, he added. "If producers can purchase domestic goods, they'd better buy domestic goods." 

Indonesian Chamber of Commerce and Industry vice chairman for manufacturing Rahmat Gobel said the business community appreciated the policies, which he said would help lower production costs and eventually selling prices. 

"Production costs will be cheaper and the producers will be able to boost their production. This will also help us eradicate illegally imported products," he said. 

Rahmat said he hoped the tax incentive would be extended to other widely used products in the country, such as air conditioning units and refrigerators.

JP Morgan commits long term in Indonesia

The Jakarta Post, Jakarta 

The management of JP Morgan Asia-Pacific issued a statement Monday reaffirming its commitment to the development of its franchise in Indonesia, dispelling persistent market rumors that it is pulling out of the country. 

Gaby Abdelnour, chairman and chief executive officer of JP Morgan Asia-Pacific said Indonesia, where the company had been in operation for 80 years, was central to the company's expansion in Southeast Asia. 

"All financial markets are being challenged by the fallout from the global crisis. But JP Morgan is confident of Indonesia's long-term potential for economic and business growth," he said in the statement, made available to The Jakarta Post. 

"JP Morgan is one of the largest foreign investment banks in Indonesia and our strategy calls for further investment and expansion of the client base," he said. 

JP Morgan has been involved in a number of privatizations during the past 15 years. 

Last week, JP Morgan, as a local currency government bond primary dealer, was a net buyer of the instrument. Total purchases between Oct. 6 and Oct. 9 alone amounted to Rp 1.1 trillion (US$115 million). 

However, JP Morgan did not make any statements regarding its operation in the local equity market, which has seen massive sell-offs since last week. 

JPMorgan Chase & Co is one of the creditors of PT Bakrie & Brothers, which together with its other Bakrie units became the center of trading speculations last week following rumors that the company defaulted on its $1.2 billion debt. (rid)

Qatar's Qtel says has not called off Indosat tender

DUBAI, Oct 12 (Reuters) - Qatar Telecom QTEL.QA (Qtel) said on Sunday it had not called off its tender offer for Indonesia's Indosat (ISAT.JK: Quote, Profile, Research, Stock Buzz), but was awaiting government clarifications on foreign ownership rules.

"The tender offer has not been called off and Qatar Telecom is awaiting government clarification on whether foreign ownership limitations should apply before continuing the tender offer process in accordance with Indonesian laws and regulations," the firm said in a statement. 

The statement came in response to Indonesian media reports. 

(Reporting by John Irish, Editing by Lin Noueihed)

South Sulawesi to send 451,612 migrant workers abroad

Makassar, South Sulawesi (ANTARA News) - South Sulawesi province will try its best to meet its quota to send 451,612 Indonesian workers (TKI) to the Asia-Pacific region, Australia, the Middle East and Europe in 2009, South Sulawesi Governor Syahrul Yasin Limpo said here on Sunday. 

He said that the Indonesian workers would be employed in such sectors as plantation, industry, welding, baby sitting, telecommunications, domestic helping and other sectors. 

The governor said that in the Asia Pacific region, the destination countries included Malaysia, Brunei Darussalam, Singapore, South Korea, Hong Kong, Japan and Taiwan. 

A number of 223,738 TKIs would be dispatched to these Asian countries while 1,750 others would be sent to Australia and New Zealand, Limpo said. 

The governor said Qatar, Untied Arab Emirates, Kuwait, Saudi Arabia and Jordan also needed 222,624 workers from South Sulawesi, while Canada and the United States needed 3,500 TKIs. 

"South Sulawesi will meet the quota of sending workers to those countries in an effort to reduce the still high unemployment rate in the province," the governor said. 

He said that South Sulawesi`s contribution to the national unemployment rate was only about 10.49 percent, namely 343,760 persons of the country`s 11.5 million unemployed people. 

Unemployment rate in South Sulawesi has dropped this year from 374,714 people in 2007, the governor said.

Indonesia As the New India

This stable democracy with a hot market economy resembles another Asian giant in the 1990s.

By George Wehrfritz | NEWSWEEK, Published Oct 11, 2008 

Jakarta today could be any of Asia's 21st-century boomtowns. The malls buzz, traffic snarls and modern office towers dominate the skyline. It all feels profoundly normal—but that's big progress in a place that, barely ten years ago, seemed destined for ruin. Following the fall of longtime strongman Suharto, and with Indonesia reeling from the 1997-98 Asian financial crisis, many analysts feared that Asia's third-biggest country (population: 235 million) would go the way of Yugoslavia. Instead, it has become a cohesive, robust and exuberantly democratic moderate Muslim nation. Things are so buoyant that Indonesia invites comparison to another Asian giant:India. 

Both remain corrupt, chaotic and excruciatingly complex. Yet each is also an attractive emerging economy, and in India's case, a star of the developing world. Could Indonesia be next? Its economy grew by 6.3 percent last year, the main stock exchange ranks among the world's best performers since 2003 and last year foreign direct investment nearly tripled, to a respectable $4 billion. All of which resembles India in the 1990s, when reforms kick-started a potentially massive economy—though outsiders barely noticed until the IT sector took off and growth passed 8 percent. In Indonesia, the key sectors are energy, mining and soft commodities like rubber, palm oil and cocoa. And in an exclusive interview, President Susilo Bambang Yudhoyono says he sees no inherent reason why a big democracy like his can't grow as fast China, which has posted 10 percent growth rates in recent years. 

That would put Indonesia on a lot of magazine covers. In fact, the country already looks better than India in two ways: its per capita income ($3,348) is a third higher, and thanks to Jakarta's fiscal austerity, it now boasts one of the lowest debt ratios in the world. "After ten years of restructuring, Southeast Asia's largest economy is in great shape," says Nicholas Cashmore, CLSA's country head and chief researcher in Jakarta. 

Indonesia's political turnaround has been just as dramatic as its economic one. The president, known universally as SBY, is a former general who was elected in mid-2004 and has since become the country's most effective democratic leader. In four years, he has helped Indonesia roll up its terrorist problem and rebuild from the 2004 tsunami. Less appreciated (but more enduring), he has backed a profound political decentralization program, empowering hundreds of local administrations. Jakarta now rules by consensus, not decree. This has its downsides: it makes it impossible to railroad through big national development projects of the sort China is famous for. As SBY himself admits, "in many circumstances, we face local communities that don't agree with government projects, so we have to convince them. I do not think the system is wrong. In a democracy like ours, change, reform and resistance are normal." 

The country's largest parties now basically agree on economic policy and the need to reduce corruption, improve the rule of law and make government more efficient. Key democratic institutions—including a free press, impartial courts and a legislature chosen by voters—are remarkably robust, and the once all-powerful military has largely removed itself from politics. Meanwhile, regional autonomy has triggered economic booms at the periphery, in contrast to the typical Southeast Asian model. "From the U.S., the U.K. or even Hong Kong," writes Cashmore, "it is difficult to comprehend the magnitude of Indonesia's potential [or] appreciate just how much more there is to the country beyond Jakarta." By his calculation, greater Jakarta now accounts for just 15 percent of Indonesia's GDP, a relatively small share compared to other Asian capitals. 

Indonesia's accomplishments are all the more impressive when you remember how far and fast the country has come. The fall of Suharto's New Order (a highly centralized system that vested absolute power in the dictator and his cronies) 10 years ago was accompanied by a financial meltdown so severe that the IMF had to step in. Indonesia also faced fierce separatist insurgencies, Christian-Muslim violence and Islamic extremism underscored by the 2002 Bali bombing. The country seemed to be teetering on the brink of wholesale disintegration. Yet today, as Australian National University economist Andrew MacIntyre and the Asia Foundation's Douglas Ramage argued in a recent report, observers should start thinking of Indonesia "as a normal country grappling with challenges common to other large, middle-income, developing democracies—not unlike India, Mexico or Brazil."

 Read whole article ....

Telkom to bid for new satellite this month

The Jakarta Post  

The country’s largest telecommunication company, PT Telekomunikasi Indonesia (Telkom) will be bidding for a new satellite this month at an expected cost of between US$ 150 million and $200 million. 

The satellite, which will be called Telkom-3 Satellite, is expected to be launched into orbit in 2010 or 2011. 

"The bidding process will begin this month or after Idul Fitri (Muslim festivity)," president director of PT Telkom Rinaldi Firmansyah told state news agency Antara on Saturday. 

According to Rinaldi, the satellite will have 48 transponders and 14 of them or 30-40 percent will be commercialized while the remaining 24 units will be utilized to strengthen the capacity of PT Telkom's telecommunication services. 

"The funds to develop the Telkom-3 Satellite are expected to come from the company's own treasury and be part of the company's annual capital expenditures," he said. 

The Telkom-3 Satellite needs to be developed to meet the increasing demand for transponders in order to expand Tekom Group services such as the supply of terrestrial lines and an optic-fiber network connection. 

The Telkom-3 Satellite is also expected to be used to meet the needs of external parties such as the military and state-owned companies. 

PT Telkom is currently operating its Telkom-2 Satellite worth 150 million US dollars, which was launched on November 12, 2005, by an Ariane-5 rocket owned by ArieneSpace company in Kouroue, Guyana, France. 

He said that companies which usually produce satellites are those from the United States, Europe, China and Japan such as Lockheed Martin, Alcatel, OCbital, GreatWall, and Mitsubishi. 

"The Engineering plan will cover a decision on a system to be applied, including the satellite's capacity, fuel and battery, until the orbit period has been completed. We just wait for the bidding process," he said. 

The Telkom-3 Satellite's orbital slot will be located at 118.0'E. Ro17.

Indonesia, Finland to cooperate in fighting global warming

Depok, W Java, (ANTARA News) - Indonesia and Finland cooperate to fight global warming by planting trees in a forest within the area of the University of Indonesia (UI) in Depok, West Java, a statement recieved here Sunday. 

"The activity will be held on Monday, September 22. Jakarta Governor Fauzi Bowo, Finnish Ambassador to Indonesia Antti Koistinen and UI rector Gumilar Rusliwa Somantri are scheduled to take part in the activity," an official of Findland`s Embassy in Jakarta Ivan Alidjaja said. 

The activity, according to Alidjaja, is part of Planting Tree Global Day 2008--an event which will take place for 24 hours, starting from Tonga Island following the sun movement, trees will be planted in Asia, Europe, Africa and America. 

"Up to this moment, more than 1,100 schools in 13 countries had registered and committed to plant 300,000 plants. In this 2008 program, Indonesia will participate for the first time," Alidjaja said. 

"The aim of the program is to increase people`s awareness of environmental issues and affirmed the importance of trees to fight global warming," he explained, adding the activity is also a symbol of Indonesia-Findland cooperation in forestry and education. 

By the tree planting program in UI, Alidjaja added, Indonesia will take part in efforts to reach at least 1 million trees by the end of 2008. 

"The long-term goal of the program is to plant 100 million trees all around the world before 2017," Alidjaja said.

West Kalimantan ready to export rice to Malaysia

Pontianak, W Kalimantan (ANTARA News) - West Kalimantan province is ready to export rice to Malaysia thanks to its rice production surplus which this year is expected to reach 150,000 tons, in official said.

"West Kalimantan has the chance to export rice," Hazairin, head of West Kalimantan`s Agricultural Service, said here on Friday. 

He said the Malaysian state of Sarawak needed 115,000 tons of rice per year and 95 percent of the volume was currently being imported from Vietnam. 

Hazairin said West Kalimantan shared a land border with Sarawak so that it had the chance to win some of the rice market in the Malaysian state. 

Referring to the ban on rice exports imposed by the central government, Hazairin said there was still an opportunity to export rice through the State Logistics Agency (Bulog). 

"The export can be carried out through the Bulog export program. Exporting rice will economically benefit both farmers and the state," he said. 

He said it would be better for West Kalimantan to export its rice rather than let local people sell it to Sarawak illegally. 

There were a number of border gates believed to have been used so far by local people to sell rice to Sarawak illegally, he said. 

"There are illegal rice exports from West Kalimantan to Malaysia but we don`t know the exact quantity," Hazairin said. 

He said a price disparity of as wide as 100 percent was enticing local people to export their rice illegally to Sarawak. 

West Kalimantan has set itself the target of producing 1.3 million tons of dry unhulled rice following the Meteorology and Geophysics Agency (BMG)`s prediction sometime ago that rainfall would remain normal until next August. 

In 2005, West Kalimantan`s rice surplus was recorded at 13,913 tons, in 2006 at 47,216 tons and at 104,194 tons in 2007. Provisional data showed that the province`s rice surplus until mid 2008 reached 164,279 tons. It is expected the rice surplus this year would reach 200,000 tons.

Bugis-Makassar bizmen to meet in Makassar

Makassar (ANTARA News) - Around 1,000 businessmen of Bugis-Makassar origin in South Sulawesi from across the country as well as Malaysia, Singapore, Brunei Darussalam and Thailand will come here for a meeting scheduled on Saturday and Sunday. 

The two-day meeting to be held with the aim of developing brotherhood among them will be opened by Vice President Jusuf Kalla who is also known as a successful Bugis-Makassar businessman, the association`s secretary, Andi Rukman, said here on Friday. 

He said several businessmen from South Africa and the Middle East would also come to the meeting at the Celebes Convention Center. 

The meeting themed "Abbulo Sibatang" (a pact) was also aimed at increasing the role of Bugis-Makassar businessmen in national development including in facing global challenges that continued to rise up. 

"We hope the 10th meeting will produce advanced business relations with businessmen from the neighbouring countries as well as South Africa and the Middle East," he said. 

He said pockets of Bugis-Makassar descents working as businessmen or politicians could be found across the country`s provinces and were potential to be developed to support the country`s economic development efforts. 

In view of that he said it was hoped the meeting could open wider business opportunities for implementation to improve the people`s economy.

CVC eyes buyout of Indonesian companies

Alfian, The Jakarta Post      

Multinational equity giant CVC Capital Partners, a major shareholder of the Formula One racing event and Britain's leading department store Debenhams, plans to spend up to US$1.26 billion to buy companies in Southeast Asia, including in Indonesia. 

CVC Asia Pacific's managing partner, Roy Kuan, said the company raised $4.2 billion in April of this year for its third Asia Pacific fund. 

"We hope to spend 25-30 percent of this fund in Southeast Asia," Kuan said during a media luncheon held recently in Singapore. 

CVC is looking forward to acquiring businesses in Singapore, Malaysia, and Indonesia, he added. 

"More business owners are retiring and more businesses will potentially be sold." 

Sigit Prasetya, CVC's Asia-Pacific managing director, said the company has yet to make any investment in Indonesia, but is looking forward to doing so. 

All sectors, except real estate, which is too risky, present investment opportunities, he added. 

"Indonesia is a very big consumer market. So, commodities, infrastructure, and energy spaces will be the most attractive investments," he added. 

As an equity firm, CVC is entrusted by its investors with identifying and investing in businesses believed to be capable of generating long term capital appreciation. 

Investors include pension funds, insurance companies and governments. 

Kuan said he believed Indonesia had become quite favorable for foreign investment, despite its tendency to be overlooked. 

"Technically speaking, Indonesia is friendlier toward foreign investors. The political situation and the currency exchange rate are stable and banks are healthier," he said. 

Restrictions on foreign ownership in Indonesia are also deemed more favorable for investors than those in Malaysia and Thailand, Kuan added. 

"For example, the percentage of foreign ownership allowed for local banks is higher than that of Malaysian and Thai banks." 

Indonesia's relative protection from global slowdown is another draw for investment. 

Despite these advantages, debt financing is very expensive in Indonesia compared to neighboring countries, particularly with respect to privatizing a publicly listed company, he said. 

"The Indonesia Stock Exchange, unlike Malaysia's or Singapore's, doesn't have private takeover rules which allow privatization. 

"If you make an offer to buy a listed company in which 70 to 90 percent of the shareholders approve the deal, you can privatize it. That's common in most countries. But Indonesia does not have such a regulation yet. That's one of the obstacles we're facing," he said. 

CVC already has several deals in the region. In July 2008, funds advised by CVC Asia Pacific completed the buyout of Magnum Corporation, Malaysia's leading gaming company, worth US$1.54 billion. 

In August 2007, CVC funds from consortium partners took over Amtek Engineering, the largest metal stamping company in Singapore by production output and facilities. 

CVC, founded in Luxembourg in 1981, manages over US$43 billion in equity funds. It has completed 270 transactions, including 30 investments in Asia. Its funds own 53 companies with revenues in the billions of dollars.

Indonesian steel town prepares for privatization

Reuters, Thu Oct 2, 2008 8:48am 

CILEGON, Indonesia (Reuters) - Like its volcanic namesake nearby, state-owned Krakatau Steel looms large over this part of Indonesia. 

Its aged, weather-beaten plants in Cilegon, West Java, push out 2.5 million tons of rolled coil and flat steel a year -- enough to build around 4 million cars -- making Krakatau a target for some of the world's leading steel-makers. 

But rather than bring in a foreign investor to inject much-needed funding and technology, the government has opted to raise money for the country's biggest steel-maker in an initial public offering, or IPO, once markets have settled down. 

Krakatau is the biggest employer in this part of West Java and has long been regarded as something of a national treasure. A previous bid to raise funds by selling it to a foreign buyer had to be scrapped because of strong political and public opposition. 

As Indonesia heads for elections next year, politicians are wary of upsetting voters by selling Krakatau to a foreigner who might axe jobs, slash benefits, and sell its steel abroad in a bid to improve competitiveness and profits. 

"It's a sensitive political issue," said Defense Minister Juwono Sudarsono in a recent interview with Reuters. 

While Krakatau "has to improve its performance," he said, an IPO was preferable as it would allow the government to retain ownership and control of a strategically important firm which supplies steel used in infrastructure, construction, and Defense. 

"With the improvement in economic performance, we do not have to resort to strategic sales," Sudarsono added. 

BLOATED, INEFFICIENT 

The decision says much about Indonesia's efforts to shake up its state-owned enterprises, including plantations, airlines, banks, utilities and energy firms, which have a reputation for being bloated and inefficient. 

"With an IPO, there will be more job security and if I have money, I would love to buy the company's shares, as steel will always be in demand," said Subekti, chief foreman at one of Krakatau's mills. 

Over the past year, Krakatau has been courted by several strategic investors, including industry leader ArcelorMittal SA, Australia's BlueScope Steel Ltd., and India's Tata Steel and Essar Steel Ltd. 

But Subekti, who at 46 has spent more than half his life working for Krakatau Steel, said he saw no advantage in having a foreign strategic investor. 

"There's no real improvement at state-owned companies that are taken over by foreign investors. Besides, since Mittal is owned by an individual, they won't care about the community living near the plant or the people in Cilegon," he said, as enormous red-hot slabs of steel thundered past his control room. 

"Take Freeport. They make gains, but the people around their mine are very poor," he said, referring to Freeport McMoRan Copper & Gold Inc, which runs the huge Grasberg copper mine in Indonesia's Papua province. 

ASPIRING CAPITALISTS 

No wonder, then, that unions and management alike have welcomed the government's decision to go for an IPO. 

Posters in praise of the planned privatization adorn Cilegon's offices and streets, where even the names -- Billet Road, Pellet Road -- are a nod to Krakatau's local importance. 

Built in the 1970s and still running partly on Soviet-era equipment, Krakatau has outlined a $1.5 billion expansion so it can benefit from rising demand for steel in Asia, particularly from China and India. 

The aspiring capitalists of Cilegon have already seen some changes at Krakatau Steel as it is readied for sale. Long-term contracts were scrapped, enabling Krakatau to sell its products at a higher, spot-market price. 

Last year, it returned to the black, making a profit of 314 billion rupiah ($33.5 million), against a loss of 135 billion rupiah in 2006, and the chief executive said he expects profit to climb to 1.2-1.3 trillion rupiah this year. 

The secretive, state-owned company is not obliged to provide detailed financial statements to the public because it isn't listed, and in the run-up to its IPO is only just starting to come to terms with dealing with the media. 

Still, there is plenty of room for improvement at the firm, named after the volcano that loomed on the opposite side of the Sunda Strait until it blew up in spectacular fashion in 1883. 

Krakatau's location, picked by former President Sukarno in honor of an Indonesian independence hero, is nowhere near its raw materials. Gas has to be piped in to fuel the furnaces, while iron pellets are shipped in from Brazil and Sweden. 

In Cilegon, it has nearly 8,000 staff, many of whom enjoy housing, transport, medical, schooling, and food subsidies that in Indonesian terms appear generous -- though meager by, say, Scandinavian standards. Its assets, worth over 12 trillion rupiah, include machinery and substantial land property holdings. 

The firm hopes to raise at least $340 million from its IPO, and a further $1.2 billion from cashflow and debt, according to company documents and officials. 

The funds would pay for a new blast furnace, expansion of its steel plants, and an iron ore smelter in South Kalimantan, enabling Krakatau to secure domestic supplies of iron ore so that it can be fully integrated. 

Krakatau hasn't upgraded or added new automation for more than a decade, said Fazwah Bujang, chief executive, a chemical engineer by training who spent most of his working life at the company until he took over at the helm last year. 

"Now is the time to do that. We are going to modernize." 

(Additional reporting by Ed Davies, Telly Nathalia, and Harry Suhartono; Editing by Megan Goldin) ($1=9380 Rupiah)

Indonesia Real Estate Seen as Good Investment

Homegofast.com 

Investors in Indonesia are driving up the prices and values of property in the country and region as they shift more money into real estate from bank deposits, according to Housing Minister Yusuf Asy´hari in an interview with Reuters. Many wealthier investors are looking for higher returns than their low yield bank deposits, and real estate is benefiting. According to the Indonesia Property Study Center, property prices are up about 12 percent so far this year. 

Prices in and around Jakarta for residential property have increased substantially over the past year, according to the minister. “The property sector attracts a lot of attention. When we talk about investment, we talk about choices. Investors will certainly shift their funds into higher-yielding investments,” Asy’hari told Reuters. He continued, “The bank deposit rates are low, that’s why they shift their investment into apartments,” and also added that demand for landed housing was also strong. 

The government of Indonesia is promoting real estate and the construction of new homes as it targets a total of 1,000 new apartment blocks in the next few years. The investment in these new building projects will amount to some US $5 billion and be spread out across the many islands of the nation. It is hoping that the rising property values and a favorable tax rate will help to spur increased construction and lure developers to build new homes.

Indrawati sees bright future for sukuks

By Babu Das Augustine, Gulfnews, Banking Editor

Published: October 02, 2008, 00:07

Dubai: Indonesia's Finance Minister Sri Mulyani Indrawati is scheduled to attend an extraordinary gathering of Ministers of Finance of the Association of Southeast Asian Nations in Dubai on October 8.

Indonesia's minister of finance: she thinks Gulf markets will respond positively to sukuks despite a $10 billion drop in sales since early this year and an average price fall of 1.51 per cent. (Bloomberg News)

The Asean ministers and senior officials will discuss the economic outlook for their respective nations, the wider Asean bloc and the global economy as a whole at the Dubai gathering.

Ahead of the meetings, the minister answers Gulf News' questions on a range of topics related to Indonesian economy and its growing relations with the UAE and the Middle East region.

The minister also speaks about the impact of the current global financial turmoil on Southeast Asia's biggest economy.

Gulf News: An HSBC report recently reported that sukuks have witnessed a $10-billion drop in sales since early 2 008 and an average price fall of 1.51 per cent. Viewed against Indonesia's impending plans to sell dollar-denominated sukuk, how do you view the appetite for Islamic bonds in the Gulf markets next year?

Sri Mulyani Indrawati: We still believe that our plan to sell sukuk is relevant and will get positive responses from Gulf markets. Our skuk will attract the demands of Gulf's investors for several reasons:

The sukuk is fully guaranteed by the government; The government has a good track record in fulfilling bond obligations; many investors are waiting the issuance of sukuk; and Indonesia is the biggest Muslim country, and the Sukuk is a tool to enhance the brotherhood between investors in Gulf countries and Indonesia.

My optimism also relies on data released by Standard and Poor's on Sep-tember 9 suggesting that the Sukuk market will rise again.

In this regard, I think the liquidity in the Gulf is still abundant and requires secured investment instruments such as our sukuk.

Given the large infrastructure needs of the country, what are the government's plans to boost foreign investment in the sector? What are the incentives for investors from the Gulf?

The Indonesian government gives highest priority to investment in infrastructure since the investment will accelerate economic growth, support further industrial development, and improve the economic welfare of Indonesians by reducing unemployment and poverty. To accomplish this, the government is taking several actions such as promoting private sector participation through public private partnerships. In 2006, we offered 10 major infrastructure projects for public tender valued at more than $4.5 billion (Dh16.5 billion). The government has also stipulated several regulations to support the infrastructure programme. In addition, incentives have been proposed to enhance the acceleration of infrastructure deployment. The government has implemented a new government policy of sharing certain risks such as political risk, project performance risk and demand risk, and to approve direct government credit support for infrastructure projects.

We are also in the process of designing special Sukuk offerings for financing infrastructure projects. In the future, such offerings may become an alternative instrument for investors in the Gulf to invest in Indonesia.

How has the Indonesian economy performed in the wake of global credit crisis and the strains in international capital markets? What impact does this have on trade and investment flows with the GCC?

We are not immune to the global crisis, and therefore, we had revised our growth from 6.6 per cent to 6.2 per cent this year. Our capital market also faces a decrease in stock prices, but we see the decrease as the global tendency. We believe we can rebound with the increase of economic growth in 2009 since our economic and financial fundamentals are strong and transparent. Our domestic market demand is still the main engine for growth, and still requires additional investment and increase in trade. In addition, we are optimistic to maintain double digit investment figures this year which is expected to be close to what we achieved last year.

UAE-based investors and companies have recently expressed their interest in developing infrastructure as well as investing in real estate, urban and agricultural development projects in Asian markets. What steps are the Indonesian government taking to encourage investment from the UAE?

Indonesia sees investment from the Middle East as a priority since the investment will bring benefits for both sides. Government (central and local) together with the private sectors are actively promoting investment opportunities to Middle East countries. As shown in Doing Business 2009, Indonesia has reduced drastically the time to start up a new company. In addition, the government has established one stop service for managing the related permits and procedures.

To accelerate the process, President Yudhoyono appointed a special envoy for Middle East Countries for the purpose of enhancing the relationship between Indonesia and Middle East including UAE.

Indonesia currently has several outstanding projects with UAE. The The projects include: one with Emaar Properties; international tourism city in cooperation with the Ras Al Khaimah Investment Authority; railroads and a new jetty as an initial stage of development of the integrated sea port for coal transportation in Tanjung Api-Api, South Sumatra; and Dubai dry-dock project in Batam.