Govt launches subsidized ‘Minyak Kita’ cooking oil

The Jakarta Post, Jakarta | Wed, 01/28/2009 12:15 PM  

The government launched Minyak Kita, its own brand of subsidized packaged cooking oil, on Wednesday to stabilize the price of the essential commodity. 

Trade Minister Mari E. Pangestu officially launched the program at Duren Sawit, East Jakarta and said that the cheap cooking oil would be sold for Rp 6,000 a liter (about 55 US cents), as compared to the existing market price of between Rp 8,000 and Rp 9,000. 

"This packed oil is expected to stabilize cooking oil prices on the domestic market, improve hygiene and boost the domestic packaging industry to serve the public at large, not only those shopping in the modern retail stores,” Mari  said, according to state news service Antara. 

Minyak Kita is produced by the country’s 24 cooking oil manufacturers as part of their corporate social responsibility programs. 

The government has allocated Rp 800 billion to subsidize Minyak Kita through the abolition of the added value tax. 

Mari said that Minyak Kita was targeted specifically at the 18.2 million poor families in the country.

Bakrie mulls IPOs for subsidiaries to repay debts

Ika Krismantari, THE JAKARTA POST, JAKARTA | Wed, 01/28/2009 11:19 AM  

Embattled PT Bakrie & Brothers, an investment holding of the politically wired Bakrie family, is planning to sell units via initial public offerings (IPOs) to repay debts. 

The company will take these measures should its plan to sell Rp 4.26 trillion (US$384 million) worth of convertible bonds to Northstar Pacific Partners fail to get approval  from shareholders and regulators, according to Bakrie & Brothers director Ari S. Hudaya on Tuesday. 

Bakrie & Brothers is due to have a meeting of shareholders to get the go-ahead in April or May.

“The Bapepam-LK (Capital Market and Financial Institution Supervisory Agency) and the shareholders must approve the issue. There’s a possibility we won’t get the go-ahead. If this happens, the restructuring will take more time,” he said. 

“But we have prepared several options (to settle the debts), including from dividend flow (of Bakrie subsidiaries), an expectation of higher prices on our stocks and IPOs for our non-publicly listed companies.” 

While refusing to name the companies ready for the IPOs, Ari merely hinted that the units would include those in the infrastructure and construction sectors. 

Bakrie & Brothers non-publicly listed units include among others PT Bakrie Pipe Industry, PT South East Asia Pipe Industries, PT Seamless Pipe Indonesia Jaya, PT Bakrie Construction, PT Bakrie Corrugated Metal Industry, PT Bakrie Building Industries and PT Bakrie Tosanjaya. 

Bakrie & Brothers will issue the Rp 4.26 trillion bonds to Northstar as a standby buyer that will be convertible into as many as 42.6 billion shares, equal to a 31 percent stake in Bakrie & Brothers, at a price of Rp 100 to Rp 110 a share. 

The deal with Northstar, a local arm of US buyout company Texas Pacific Group, is to help Bakrie & Brothers restructure debts and retain control of its main bread and butter earner PT Bumi Resources -- Asia’s largest thermal coal exporter. 

The bonds, scheduled for issue in May and to be converted into shares by the end of the year, will then replace a Rp 4.26 trillion loan the company owes to Northstar. 

Northstar helped Bakrie to settle $575 million of debt to Odickson Finance, a subsidiary closed to Gunawan Yusuf’s Sugar Group Companies, last December linked to a deal  whereby Bakrie should issue  bonds. 

Bakrie & Brothers minority shareholders are concerned their stake may be diluted due to these steps. 

Ari, however, said the company would stick to its initial plan to sell convertible bonds as this move was thought to be more beneficial to shareholders than the sale of assets. 

Bakrie & Brothers is scheduled to submit the bond proposal to Bapepam-LK in February at the latest. 

“Amid the current market conditions, I doubt whether it’s a good time for the bond issue. But Northstar is ready to be the standby buyer,” said Ari. 

In response to the recent controversy over Bumi’s purchases of coal producers PT Pendopo Energi and PT Fajar Bumi Sakti, and mining service firm PT Dharma Henwa for a combined Rp 6.1 trillion, Ari insisted that these purchases must proceed despite the current investigations by Bapepam. 

Ari, who is also Bumi’s president director, dismissed allegations that these acquisitions might be bogged down by conflicts of interest and concern over possibly overvalued selling prices. 

Bapepam chairman Fuad Rahmany said Tuesday the regulator was investigating the deals to see whether they were substantial enough to require Bapepam approval. 

Bumi’s purchases will be financed by 70 percent loans and 30 percent from equity, according to Ari.

New Islamic Bond

The Jakarta Post   |  Wed, 01/28/2009 10:47 AM  
 

 

Summary of bond trading positions at BNI Sekurities on Tuesday. The government will offer an innovative Islamic retail bond from 30 Jan. to 20 Feb. with a minimum value of Rp 5 million. The bond can be purchased at 13 institutions including four conventional banks, one sharia bank and eight security firms. (JP/Ricky Yudhistira)

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Jakarta to revamp Manggarai sluice gates

Triwik Kurniasari, The Jakarta Post, Jakarta | Tue, 01/27/2009 1:27 PM  

The city administration plans to build one more gate at South Jakarta's Manggarai sluice gates to regulate the water flow better. 

"The new gate would be installed next to the existing ones, requiring the government to acquire some land plots," Pitoyo Subandrio, head of the Ciliwung-Cisadane Flood Bureau at the Public Works Ministry, said on Saturday. 

"The new gate will reduce flooding because the water will run more smoothly than before." 

Pitoyo said the space for the gates, which were built in the 1920s by the Dutch government, would be widened by a dozen meters. 

The width of a gate is about six meters, excluding the pillars. 

Included in the Manggarai revamp is the clearing of the areas along the Ciliwung River, from the Casablanca bridge to the Manggarai sluice gate. 

Flood management expert Jan Jaap Brinkman from the Netherlands Water Research Institute (Deltares) confirmed the urgency of an additional gate in Manggarai. 

"The Manggarai gates need to be improved because they are too small. At this moment it is two gates, but it needs to be three gates," Brinkman, who is also the team leader of Flood Hazarding Mapping 2 at the Public Works Ministry, said. 

Brinkman was speaking after the signing of an agreement between Indonesia and the Netherlands in the fields of meteorology, water management, climate change and early warning systems. 

The administration is currently running flood mitigation projects in anticipation of the rainy season. 

It is now dredging 12 waterways across the city, including in Pademangan River and Mati canal (in North Jakarta), Cakung River (East Jakarta) and Grogol in West Jakarta. 

The Rp 23 billion (US$2.04 million) project is set to dredge 243,322 cubic meters of garbage out of the canals. The canals range from 467 meters to 3,533 meters long. 

The administration is also working on the East Flood Canal project, which is expected to be completed by the end of this year. The canal will be the primary flood control mechanism for East and North Jakarta. 

The 23.5-kilometer East Flood Canal will stretch across 11 subdistricts in East Jakarta and two subdistricts in North Jakarta. 

PT Pembangunan Jaya Ancol Tbk, developer of the Ancol recreational area, is building another five submersible water pumps at its site in anticipation of floods in February. 

"We are building three new water pumps in West Ancol and two more in East Ancol to add to the existing 62 pumps; we hope they will be finished by February," Nurvita Sari, the developer's manager of property maintenance, said. 

The new and existing pumps, each able to pump 30 cubic meters of water per minute, will drain water from households in Ancol to the Ancol River. 

"After the water reaches Ancol River, it's the city's public works agency's responsibility to channel the water to Pluit and Sunter dams," she said. 

The Meteorology, Climatology and Geophysics Agency (BMKG), said that in February the sea level would rise 1.2 meters above normal levels due to a high tide, with the possibility of heavy downpours. 

YJ Harwanto, the developer's general manager of its corporate plan, said they were also raising the wave breakers, adding night shifts to watch over the water level and setting up an information board about the sea level. (fmb)

BNI appointed WOC`s official bank

Manado, N Sulawesi (ANTARA News) - PT Bank Negara Indonesia (BNI) has been appointed as the official bank of the World Ocean Conference (WOC) to be held here May 11-15, 2009, a local BNI official said. 

"BNI has networks in a number of countries and therefore it has been appointed as the official bank for the participants of the conference," Joppy Lamonge, head of the BNI`s Manado branch office, said here Saturday. 

He said the appointment was an appreciaion for the efforts BNI had made to constantly improve its services in addition to the fact that it had a wide network of offices in many countries. 

To give better service to the participants of WOC, Lamonge said the bank would open a number of special outlets at World Ocean Conference`s venue. 

"The outlets will facilitate the WOC participants to make quick and safe financial transactions during the world event in Manado," Lamonge said. 

Therefore, he said, the bank was now readying its human resources and sophisticated equipment for electronic financial transactions such as e-banking and the like. 

"E-banking is predicted to be one of effective ways for the WOC participants to make financial transactions," Lamonge said. 

Besides the special outlets, BNI branch offices in Manado would be optimized during the conference. 

"As many as 11 BNI branch offices and auxiliary branches across Manado will complete 38 automatic teller machines (ATM) which have been in operation so far," Lamonge added.

Printing giants win tender to supply ballots

The Jakarta Post, Jakarta | Sat, 01/24/2009 3:35 PM  

National printing giants were among nine winners announced Friday of a tender to procure 693 million ballots for the legislative elections. 

However, the General Elections Commission (KPU) reopened a tender to procure ballots for Sulawesi, Maluku and North Maluku because only two companies participated in the bid. 

The elections body offered 10 contractual packages in the tender to supply ballots to different regions. 

The KPU also announced Friday the winner of a tender to procure permanent legislative candidate forms. 

All winning bidders were expected to sign the contract next week and begin producing early February. All the election materials must reach polling stations across the country by the end of March. 

The KPU has set April 9 as the date for House of Representatives, Regional Representatives Council and local legislature members elections. 

Earlier Wednesday, the KPU unveiled the winners of a tender to supply seals and ink for ballots for the legislative elections. 

The KPU also announced Friday the standby bidders; companies whose bids did not win the tenders but who would inherit the contracts should the winners prove incapable of fulfilling the contracts' stipulations. 

KPU member Abdul Aziz said the tender committee had taken into consideration the winners' capabilities to print and distribute the ballots, as some had secured contracts to supply ballots to multiple regions. 

The KPU said it had learned from its mistakes in 2004 when election materials were distributed behind schedule and tenders became hot spots for corruption. 

The distribution will start from remote areas as it will take the suppliers longer to deliver the materials. 

In response to the KPU announcement, Election Supervisory Body (Bawaslu) member Bambang Eka Cahya Widodo called for tight security measures in the distribution of the ballots to polling stations throughout the country to prevent corruption. 

Bambang said strict security was essential to preventing errors in the printing and delivery of the ballots and also ensuring the contract deadlines were met. 

Winners of ballots Tender 

• RegionConsortium
  
• IPT Pura Barutama
  
• IIPT Sumex Intermedia
  
• IIICV Ganeca Exact Bandung
  
• IVPT Sinar Agape Press
  
• VCV Ganeca Exact Bandung
  
• VIPT Masscom Graphy
  
• VIIPT Pura Barutama
  
• VIIIPT Temprina Media Grafika
  
• IXPT Temprina Media Grafika
  

Winner of legislative candidate forms tender 

• Consortium of PT Metro Pos

Indonesian Health Workers Unable to Fill Overseas Quotas Due to Poor English Skills

The Jakarta Globe, Dessy Sagita, January 23, 2009 

Despite a strong demand overseas for migrant health workers, Indonesian nurses and caregivers are unable to take advantage of the highly-paid jobs because they lack English skills, an official said on Friday. 

Mohammad Jumhur Hidayat, head of the National Agency for the Placement and Protection of Overseas Labor, or BNP2TKI, said after the signing of a Memorandum of Understanding between the agency and three health academies in Jakarta, that demand from the Asia Pacific, Middle East and United States for Indonesian health workers would continue to rise. 

“The demand for Indonesian nurses and other health care workers is skyrocketing but we cannot adequately respond to it because of a human resource shortage and language problems,” Jumhur said. 

In 2008, Japan offered a 1,000-person quota for Indonesian health workers but Jumhur said that the agency had only been able to send 208 workers. He also said that this year, there were requests from Hong Kong, Australia, New Zealand, United Sates, Canada, Kuwait and Jordan for Indonesian health workers. 

Jumhur said that from now until 2015, Japan would need 600,000 migrant health workers while Saudi Arabia required 30,000 health workers this year. 

“It’s such a great opportunity for us, but we’ve been hampered by the fact that many of our nurses and caregivers do not speak English or other languages,” he said. 

Jumhur referred to a nursing school in Cirebon, West Java Province, which required its students to learn Japanese. Of the 208 health workers sent to Japan in 2008, 44 of them came from the school. 

“If health academies and foundations provided English lessons, I guarantee that all our nurses and caregivers would be employed,” he said. 

Imam Dahlan, the Ministry of Health’s head of the empowerment center for overseas health workers, said that most Indonesian nurses were highly qualified medically. 

“We don’t really have a problem when it comes to medical skills; the only problem is a lack of language skills,” Imam said. 

In order to capitalize on the demand, this year the BNP2TKI expects to send abroad more skilled labor workers than in 2008, when only 36 percent of the 740,000 migrant workers were skilled. This year Jumhur said the agency expected to increase that figure to 40 percent. 

The BNP2TKI reported that through to 2015, there would be more than 2.85 million job opportunities for nurses in the United States, Canada, Australia, Europe and the Middle East.

Billions pour into W. Papua

Nethy Dharma Somba, The Jakarta Post, Manokwari | Fri, 01/23/2009 9:27 AM  

President Susilo Bambang Yudhoyono visited West Papua on Thursday, pouring hundreds of billion of rupiah in projects around the province.

In his two-day visit, Yudhoyono inaugurated 10 projects, including the development of roads, bridges, river rehabilitation projects and the construction of a Raja Ampat beach wall worth a total of Rp 231 billion (US$19.9 million) in Sorong and Manokwari, the capital city of the province.

Yudhoyono also provided Rp 510 billion for the rehabilitation and reconstruction of the province after an earthquake hit the province on Jan. 4 this year. 

The President donated Rp 4.47 billion of his own money to the people in Manokwari and Raja Ampat regency and handed over soft loans from Bank Mandiri of Rp 11.22 billion, from Bank BRI of Rp 16.09 billion and Bank BNI of Rp 8.42 billion.

Yudhoyono also handed over funds of Rp 154.7 billion for the National Self Reliance Community Empowerment (PNPM) program for people in 8 regencies and municipalities.

“The loans are for boats which will belong to the government.

The government can then lend the boats to the people for fishing. When the people can afford to buy new boats, they should return them and let other people use the old boats,” he said.

With the PNPM fund, Yudhoyono said, people are given a fishing rod.

“The fund is given in the districts. It’s up to the people to determine how to use the fund, but it should improve their welfare,” he said.

PNPM is often criticized for being manipulated by Yudhoyono’s Democratic Party as a campaign strategy to earn people’s vote. Yudhoyono is likely to run again in the presidential election in October.

However, he said that everything that had been given by the government was aimed only to increase people’s welfare, and that people in West Papua could run the programs themselves.

He said the government had given a special autonomy status to the West Papua province through the Law No. 21/2001 and the Presidential Instruction No. 5/2007.

The government has recently disbursed Rp 1.1 trillion in autonomy funds in the 2009 budget for West Papua. That funding is 30 percent of the total autonomy fund of Rp 3.7 trillion as the remaining Rp 2.6 trillion is allocated for Papua province.

The allocation of the Rp 1.1 trillion autonomy fund for West Papua was commensurate with its eight regencies/municipalities compared to the 27 regencies/municipalities in Papua.

Besides inaugurating the projects, Yudhoyono also donated 3000 packages of food staples for Manokwari residents while First Lady Ani Yudhoyono handed over a car and a motorcycle for a school.

Accompanied by Coordinating Minister for People’s Welfare Aburizal Bakrie, Home Minister Mardiyanto, State Secretary Hatta Rajasa, Public Works Minister Joko Kirmanto, Social Services Minister Bachtiar Chamsyah and the Indonesian Military Chief Gen. Djoko Santoso, Yudhoyono handed over all the donations to West Papua Governor Abraham O Atururi on Masinam Island, which is 10 minutes by boat from Manokwari.

The President also visited an old well which was once used by an early Christian mission in Papua in 1855 and La Haroi, an old church.

Many residents were disappointed with the tight security during the President’s visit. “It seemed that the President no longer belongs to the people. We could no longer shake hands with him,” a resident said.

Pertamina planning to export diesel oil

Jakarta (ANTARA News) - State-owned oil and gas company PT Pertamina plans to export diesel oil this year following a decline in domestic demand for this type of oil, the company`s chief said. 

Pertamina President Director Ari Soemarno said here on Friday the company was making efforts to get overseas buyers for its diesel oil. 

"Domestic demand for diesel oil, especially from state electricity company PLN, has dropped so that part of our diesel oil output will be exported," he said. 

PLN had reduced purchases of diesel oil for its power plants and switched to gas, Sumarno said, adding that in 2008 PLN had bought a total of 11.4 million kiloliters of fuel oil, consisting of diesel oil and residue oil. 

But in 2009, PLN`s need for fuel oils was expected to drop to 7.9 million kiloliters, about 70 percent of which would be diesel oil and the remaining 30 percent residue oil. 

Sumarno further said PLN had been replacing diesel oil with residue oil, causing a decline in its power plant`s need for diesel oil. 

He said Pertamina had also postponed the execution of a plan to import 1.8 million barrels of diesel oil from Kuwait due to the drop in domestic diesel oil consumption. 

Earlier, the government had asked PLN to diversify its energy resources and optimize the use of gas, replacing diesel oil with residue oil and increase the use of coal and biofuels, according to J Purnomo, the energy and mineral resources ministry`s director general for electricity and energy utilization at a hearing with the House of Representatives (DPR)`s Commission VII (energy affairs) here Thursday.

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Fujitsu and NSW win order for Indonesian optic-fiber network

Jakarta (ANTARA News) - Fujitsu Limited announced that it and partner Norddeutsche Seekabelwerke GmbH (NSW) of Germany have won a turnkey contract from PT Telekomunikasi Indonesia Tbk (PT Telkom) worth more than US$100 million to install a submarine optic-fiber cable system for the Indonesian islands Kalimantan, Sulawesi, Java, Bali and Lombok. 

The "JaKa2LaDeMa" ring will provide the first direct, high-bandwidth optic-fiber submarine cable system for these Indonesian islands, and is scheduled to be completed in the January-March quarter of 2010, Fujitsu said in press release by Fujitsu Indonesia today. 

JaKa2LaDeMa will deliver the capacity to provide upgradeable transmission facilities that support Internet, e-commerce, video, data and voice services. 

Fujitsu will provide state-of-the-art terminal equipment, repeaters, branching units system integration and associated services for this project. The repeaters will be integrated into the repeatered cables provided by NSW, which will also provide such services as surveying, marine installation and civil works. 

"Fujitsu is extremely pleased to make a significant contribution to the construction of network infrastructure in Indonesia, which is one of the fastest growing markets in the world," commented Gensei Katano, Group vice president of Photonic Systems Group, Submarine Networks at Fujitsu. 

"This win is attributable to our robust network portfolio as well as our strong commitment to Indonesia. We will continue to work closely with NSW for the successful delivery of state-of-the-art submarine cable system to PT Telkom." 

"We are very proud that PT Telkom has awarded us this project," said Rudolf Stahl, managing director at NSW. 

Fujitsu's optical submarine repeater is the most technologically advanced and reliable repeater in the industry. In 40 years of submarine cable experience, Fujitsu has installed more than 2,500 repeaters throughout the world while maintaining a zero-malfunction rate. 

NSW, a worldwide leading manufacturer in the submarine telecom and power cables industry, will be using its MINISUB repeatered and unrepeatered cable, which with its compact and robust design, will provide excellent performance, cable handling, laying and recovery characteristics. 

In accordance with the customer requirements, the cable will be delivered in the versions lightweight, lightweight-protected, single-armored and double-armored.

Bali to finish construction of special tourist port in 2009

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

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

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

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

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

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

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

Telkom asks competitors to joint fund next satellite

The Jakarta Post, Jakarta | Fri, 01/23/2009 12:44 PM  

State owned PT Telekomunikasi  donesia (Telkom) has invited its competitors to jointly invest capital in a new satellite project to expand Internet access and other means of communication. 

Telkom’s head of infrastructure division Sarwoto Atmosutarno said Thursday the country’s largest telecom firm is in talks with local rivals to establish a consortium. 

“We have offered several local telcom firms to join in financing the establishment of Telkom-4,” Sarwoto told reporters. 

“We offer this project to our competitors because we believe telcom firms can work together to develop the country’s telecommunications backbones.”  

PT Indosat, the country’s second largest telcom firm, was among the firms approached, Sarwoto said. 

In December last year, Telkom appointed ISI Retchesnev, a Russia-based firm, to build and launch its upcoming Telkom-3 Satellite,  at a cost of between US$175 and 200 million. 

Telkom and Retchesnev sign this contract in February. 

Sarwoto said Telkom-4, would cost the firm about the same as Telkom-3. 

Telkom has launched nine satellites since 1976. The last one, Telkom-2, was launched in November 2005 from French Guyana. 

The company is expecting  to  raise  $50 million annually from Telkom-3 after it is set up, according to Sarwoto. 

“The annual fee to rent a satellite transponder currently stands between $900,000 and $1.2 million,” he said, adding that Telkom-3 was designed to have 48 transponders. 

“The new satellites mean more customers can access the internet as well as other means of communication,” he said. 

Indonesia is home to 11 GSM and CDMA-based cellular phone operators with PT Telekomunikasi Selular (Telkomsel), a Telkom subsidiary, being the largest. 

During the January-September period last year, the company, which has the largest market capitalization at the stock market, booked Rp 44.6 trillion (US$4.04 billion) in revenue, up by 2.18 percent from Rp 43.64 trillion in the previous year. 

Telkom plans to spend Rp 14-15 trillion for expansion in cellular phone networks and the remaining Rp 7-8 trillion in non cellular. The company is 51.19 percent owned by the government and 48.81 percent by the public. (hwa)

Katarina Utama to go public soon

The Jakarta Post | Fri, 01/23/2009 12:47 PM  

JAKARTA: Telecommunications equipment service provider PT Katarina Utama is planning to go public this year, president director Fazli Zainal Abidin said in Jakarta Thursday. 

“We plan to sell 40 percent of our shares to the public in the first quarter of this year,” he said, adding the amount is subject to change due to stock market fluctuations. 

According to Mukti Wibowo, the vice president of investment bank Optima Karya Capital Securities, which is arranging Katarina’s initial public offering (IPO). 

The management did not disclose so far the revenue target for the IPO. “In total, the company will sell around 400 million shares,” he added. 

Fazli explained the company would use the IPO proceeds to expand its business, which builds telecommunication towers for several telecommunications service operators, including Excelcomindo and Indosat. 

Katarina’s projects are mostly using  products of Swedish telecommunication giant Ericsson.

Exxon, Chevron in $6.76b deal to feed gas-hungry local market

Ika Krismantari, The Jakarta Post | Fri, 01/23/2009 7:43 AM  

Global energy giants, including ExxonMobil Corp and Chevron Corp, on Thursday signed deals worth US$6.76 billion with domestic industries to supply gas. 

The signing took place at the fourth international gas exhibition and conference in Jakarta. 

Under the deal, Exxon has agreed to supply gas to fertilizer and related products giant PT Petrokimia Gresik and state electricity company PT PLN in deals worth $1.4 billion and $1.7 billion, respectively. 

Exxon will deliver the natural gas from the Cepu block, where the oil giant acts as the operator in cooperation with state oil and gas firm PT Pertamina. 

However, it is not yet clear how much gas will be delivered. 

Chevron and its partners under the East Kalimantan production sharing contracts will supply gas to fertilizer producer PT Pupuk Kaltim in the province at an estimated value of $1.6 billion. 

Thursday's signings mark stronger commitments from foreign oil and gas companies operating in Indonesia to supply part of their gas output to the domestic market. 

A day earlier at the conference, Finance Minister Sri Mulyani Indrawati revealed the government’s plans to prioritize gas production for domestic consumption rather than for export in the coming years. 

She said this was because local consumption was expected to continue rising in line with growth in local industries and a burgeoning middle class. 

While aware of the possible dilemma facing gas companies in meeting demand for overseas buyers, Mulyani said she believed the government had no other option than to prioritize the national interest. 

Mulyani, who is also acting coordinating minister for the economy, urged gas producers to maintain production or produce more gas to meet local and overseas demand. 

Estimates from the country's upstream oil and gas regulator, BPMigas, show national demand for gas is set to rise steadily at a rate of 2.8 percent annually, reaching 6 billion cubic feet per day by 2020. 

In 2007, demand stood at 4.2 billion cubic feet per day. 

In Java, where most industries are based, demand will increase by 4.9 percent annually, reaching 4.1 billion cubic feet per day by 2020. 

In light of this progressive trend of gas domestic needs, the government has significantly increased the gas supply portion for domestic industries from 29.6 percent in 2002 to 49.5 percent in 2008, according to BPMigas. 

Indonesia, the world’s third largest liquefied natural gas (LNG) exporter, has been trying to in-crease its gas production to meet both foreign and domestic needs. Ironically, gas production has been on a downward trend for the past several years, due in part to aging fields. 

This year’s production, for instance, is expected to reach 7.3 billion cubic feet per day, lower than the 7.9 billion cubic feet per day recorded in 2008. 

BPMigas chairman Raden Priyono said the government would rely on a number of big LNG projects to help increase national gas production, including the Tangguh LNG plant in Papua, the Senoro LNG plant in Central Sulawesi, and the development of the Masela gas block in the Timor Sea. 

Rp2.1 Billion for Rebuilding Burnt Pertamina Storage Tanker

Wednesday, 21 January, 2009 | 16:30 WIB 

TEMPO Interactive, Jakarta: PT Pertamina has estimated that that Rp2.1 billion will be needed to rebuild the storage tanker at Pertamina's depot in Plumpang, North Jakarta, that was burnt on Sunday (18/1). 

Pertamina's Marketing and Commerce Director, Ahmad Faisal, said that the burnt storage tanker number 24 was built in 1995 with the capacity of 10,000 kiloliters. 

Earlier, Pertamina had predicted that rebuilding will cost Rp15 billion. 

“Hopefully the insurance can cover it,” said Faisal during a working meeting with the Energy Commission at the House of Representatives (DPR), on Wednesday (21/1). 

Pertamina is covered by the insurance company PT Tugu Pratama Indonesia, which is also a Pertamina's subsidiary company. 

AGOENG WIJAYA

PLN seeks for more loans

Mustaqim Adamrah, The Jakarta Post, Jakarta | Thu, 01/22/2009 4:35 PM  

State electricity firm PT PLN has secured at least US$1.35 billion in loans to run a second 10,000 MW program sponsored by the government. 

"PLN has secured loans amounting to US$1.148 billion from the World Bank to finance a project in Cisokan, West Java, and $200 million from JBIC (Japan Bank for International Cooperation) to fund a project in Asahan," Energy and Mineral Resources Purnomo Yusgiantoro told the press Wednesday. 

He was speaking after a meeting with Vice President Jusuf Kalla in the Vice President's Office. 

PLN, he said, would need to contribute $3.8 billion to fund projects under the second "10,000 MW crash program", which requires a total of $17.3 billion in investment. 

PLN president director Fahmi Mochtar, also present at the meeting, said the company would raise the funding from soft loans. 

"We already received offers of soft loans from China, Korea, the Middle East and Europe." 

According to Purnomo, out of the total $17.3 billion, the remaining $13.5 billion will be generated by private contractors. 

He said that under the program, PLN will build two power plants in the Java-Bali system, while 43 other plants will be built by private contractors, or independent power producers, comprising 22 projects in Java and Bali, and another 32 projects off the Java-Bali system on the other islands. 

"We see many contractors, particularly those from China, are interested to participate in the (second) program despite the crisis because the power sector is lucrative and these projects are all long-term, running for 30 to 40 years " he said. 

Purnomo said private contractors and PLN were expected to start public bidding in the second and third quarters of this year, respectively. 

Fahmi said the second program was scheduled for completion by 2012, "or 2013 at the latest". 

Unlike the first program, which is entirely designated for coal-fired power plants, the second program will have 12 percent of total power generated by hydro plant, 48 percent by geothermal plant, and 14 percent by gas , plus 26 percent by coal. 

The first program commenced in 2007 and is slated to finish by 2010. 

Indonesia has the world's largest geothermal reserves, with an estimated capacity of up to 27,000 MW of electricity - equal to around 40 percent of the world's geothermal reserves. 

However, Indonesia's existing 18 operational geothermal plants only produce a combined 1,050 MW.

Benoa all set to welcome cruise ships this year

Wasti Atmodjo, THE JAKARTA POST, DENPASAR | Thu, 01/22/2009 1:49 PM  

Now in the last stages of construction, the Benoa port upgrade, to support turn-around services for cruise ships that meet international standards, should be ready to berth ships soon, state-owned PT Pelabuhan Indonesia (Pelindo) III said. 

"If all parties *including local tourism businesses* are in agreement, we can begin receiving cruise ships into Benoa port this year," 

Pelindo III general manager Bambang Priyanto said after a meeting Monday with Bali's provincial legislative council (DPRD) and the city administration. 

Benoa port has been upgrading its infrastructure since late 2007 to expand its services beyond its longtime role as a cargo and refueling port. 

The government has reportedly been trying to outfit the port with hotels, landscaped gardens, trade centers and other upscale passenger-port facilities. 

The development plans behind Benoa's expansion, which included setting aside two hectares of land at the port, have not been fi nalized. But Pelindo III is apparently not waiting for these facilities to be fully operational before scheduling cruise ships to stay overnight. 

The port's current size - 3.6 kilometers in length and 150 meters in width - should allow ships under 200 meters long to stop over. Only two such cruise ships can berth at a time. 

"Even with this limited capability, we can still make sure the users will be satisfi ed," Bambang said. 

He said starting up the facility would enhance Bali's popularity as a tourist spot, citing the island's strategic location as a bridge between the continent of Asia and Australia. 

The distance between Benoa and Singapore is 1,488 kilometers, from Benoa to Darwin, 1,550. 

"Our position smack dab in the middle makes it one of the best stopoff choices for cruise ships passing through the region," Bambang said.

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Bali will have second airport: Pastika

Ni Komang Erviani, Contributor The Jakarta Post, Denpasar | Thu, 01/22/2009 1:48 PM  

After months of uncertainty, Bali Governor Made Mangku Pastika confirmed on Wednesday the government's plan to equip north Bali with a new public airport. 

After meeting with the Bali Provincial Legislative Council in Denpasar, Pastika said a second airport would be built, adding that the go-ahead had come from Vice President Jusuf Kalla and Culture and Tourism Minister Jero Wacik. 

"The idea to build an airport in north Bali did not just come from me, but also from Vice President Jusuf Kalla, Minister Jero and all the regents in Bali," Pastika said. 

Pastika's administration has been toying with the idea of building an airport in northern Bali since the governor was inaugurated in August last year. 

The administration's most recent plan was to build an airport in Kubu Tambahan district, Buleleng Regency, about 90 kilometers north of Denpasar. 

Currently, all nonmilitary air traffic on the island convenes at Ngurah Rai International Airport in the Badung Regency, southern Bali. 

There is also a small military airport - Lt. Col. Wisnu Airfield - in Gerokgak district, Buleleng. 

Pastika said Ngurah Rai airport was operating well over capacity and could not cope with more flights. 

Ngurah Rai airport operator PT Angkasa Pura I recently announced plans to expand the airport. 

Pastika said the new airport would ease the high population density in southern Bali. 

"It's much too crowded in the south and Ngurah Rai Airport can't support anymore traffic," the governor said. 

"And there's too much development in southern Bali to support the tourism industry there. There has to be an equal amount of development for north Bali's tourism industry," Pastika added. 

Bali's legislative council chairman Ida Bagus Putu Wesnawa said the council was behind the idea, but added that the Bali government would need to perform a study to see whether north Bali could sustain an airport. 

"We need to know whether *an airport in* north Bali can support Bali, whether it's big enough, what the population there is and which areas are suitable for tourist accommodations," Wesnawa said. 

"Because, if it turns out that north Bali cannot handle those things, if it turns out that we might have too many tourists and we can't accommodate them, then this might end up being a very bad plan," the council chairman added. 

Secretary-general of the Indonesian Hotels and Restaurants Association Perry Markus said he was behind the new airport and that he was hopeful it could increase the number of tourists to the island. 

"There are numerous interesting tourism spots in northern Bali, but these spots have not been developed as well as in southern Bali because it's too hard to travel there by land," Markus said. 

Northern Bali is home to a number of popular tourists destinations, such as Lovina beach, Singaraja, and the twin lakes in Bedugul in Gianyar.

President Yudhoyono presents community empowerment funds to WPapua

Investment on the way: President Susilo Bambang Yudoyono, accompanied by First Lady Ani Yudhoyono and West Papua Governor Abraham O. Atururi, greets well-wishers on Mansinam island in West Papua on Thursday. (JP)

Manokwari (ANTARA News) - During his first-ever working visit in West Papua, President Susilo Bambang Yudhoyono is to present Rp154.72 billion in financial aid under the National Self-reliant Community Empowerment Program (PNPM) to the province on Thursday. 

The assistance was to be handed to West Papua Governor Abraham Artururi when the president visits Mansinam island in Manokwari district. 

The president was expected to arrive at Manokwari`s Rendani airport from Sorong at 9:30 am local time and inspect a command post of the Earthquake Disaster Management Coordination Unit (Satkorlak) at the Manokwari district head`s office. 

From the Manokwari distirct head`s office, the president would be driven to Manokwari`s seaport to board a naval vessel that would take him and his entourage to Mansinam island where he would hand over the PNPM financial aid intended for nine districts and municipalities in West Papua. On the occasion, the president would also present aid in kind (basic necessary packages) to the local people of the island. 

In addition, the president would also witness the handing of People`s Business Credit (KUR) from three state banks to small enterprises in the district. 

On the occasion Bank Rakyat Indonesia (BRI) would hand credits totaling Rp16.59 billion to 1,516 debtors, Bank Mandiri Rp11.22 billion, and Bank BNI Rp8.42 billion to 44 debtors. 

In Mansinam island, President Yudhoyono would also sign a plaque to mark the dedication of ten infrastructure projects in West Papua, among others the construction of Warmare-Prafi road, six bridges, and a road betweb Fak Fak and Kokas. 

Rotterdam helps dredge city rivers

Agnes Winarti, The Jakarta Post, Jakarta, Tue, 01/20/2009 3:11 PM 

The city of Rotterdam will hand over equipment to help dredge rivers in Jakarta as technical assistance offered by the Dutch city to the capital now that a pilot dredging phase has ended.

“Tomorrow [Tuesday], we will officially transfer the dredging equipment to the governor. They include two floating bulldozers and specialized equipment which separates river sediment from waste,” river dredging project team leader Daan Rijks told The Jakarta Post on Monday.  He was speaking on the sidelines of a seminar about the Port of Rotterdam here.

The small bulldozers can maneuver in canals only two to three meters wide, while a medium-sized one can enter and clear out canals 15 by 20 meters wide.

Dutch experts have been training city employees since November 2009 to use the equipment in a pilot project that cleaned out sections of the Kali Mati and Pademangan rivers in North Jakarta.

“We will work side by side until February or March. Then people here will take over; we’ll come back to advise and consult,” Rijks added.

“We start in April then continue this project for the next two years,” Jakarta Governor Fauzi Bowo said Monday.

Fauzi has said the dredging would include not only waterways in Jakarta but also in upstream areas.

The technical assistance provided by the Rotterdam administration is part of a World Bank funded project of US$150 million in soft loans and a $10 million grant. 

The project has two stages: dredging and repairing embankments and water pumps, beginning this year, and improving human resource capacity to mitigate floods until 2012.

Fauzi also said, “Within my five-year term, I’m aiming to complete the East Flood Canal project by 2010.”

Vice Mayor of Rotterdam Lucas Bolsius said the dredging project need better planning from Jakarta administration to ensure its success.

“Even in Rotterdam and Holland, we are making plans for the next hundred of years.”

Jamsostek to pour Rp 8t into stock market

The Jakarta Post, Jakarta | Wed, 01/21/2009 1:10 PM  

State occupational insurance company PT Jamsostek will still spend large for buying stocks this year although cutting allocation. 

The company, the country’s largest institutional investor in the capital market, is allocating around 11 percent of this year’s investable funds worth Rp 72.7 trillion (US$6.49 billion) on buying stocks in the market. 

This amount equals to around Rp 8 trillion, raising hopes of revival in the sluggish investment in the bourse. 

“We plan to invest around 11 percent of our investable funds in the stock market. The allocation is lower than last year’s 20 percent,” said Jamsostek president director Hotbonar Sinaga at the State Ministry of State Enterprises Tuesday. 

Last year, Jamsostek had investable funds of Rp 59.5 trillion. 

He said 30 percent of this year’s investable funds would be placed in bank deposits, while the remaining 59 percent would be placed in mutual funds, direct equity investments and property. 

At the end of 2008, deposits made up over 30 percent of company assets, while bonds were over 50 percent and equities and direct investments accounted for only 20 percent. 

As earlier reported, the major fall in the capital market during 2008 took a toll on the value of Jamsostek investments in stocks, with the company only making around 85 percent of its targeted Rp 1.17 trillion in net profits. 

The company, whose equity and bond investments always become a benchmark for other institutional and retail investors, is looking at net profits to increase by 10 percent this year to Rp 1.27 trillion. 

According to Hotbonar, investment revenue is expected to grow by 25 percent to Rp 2.8 trillion while assets are forecast to jump by 22 percent to Rp 75 trillion. 

Premiums paid by workers are estimated to grow by 17 percent to Rp 11.46 trillion, while membership targets will be set at 2.5 million workers up from 2.3 million last year. 

Jamsostek collects regular premiums from workers in the form of savings until retirement, and covers payments for events such as accidents, dismissals, layoffs and illness as well as retirement pensions. 

In October last year, Indonesia’s stock market did not escape the global financial turmoil, with its share price index tumbling by almost 50 percent. 

Hotbonar admitted in December the company had invested too much on the stock market, causing a substantial decline in its financial growth and a decrease in its stock portfolio value of Rp 4 trillion. 

Among the shares owned by the company at that time were those of PT Astra International, PT Astra Agro Lestari, Bank Central Asia, PT United Tractors and PT Unilever. 

Investors often trail Jamsostek stock shopping decisions in the hope of making gains from rising share prices of stocks targeted by the company, which regularly spreads its buying orders across several major securities houses to avoid being detected by other investors. 

Jamsostek is also a main buyer of shares offered by state companies during their initial public offerings. 

Daily stock transaction at the Indonesia Stock Exchange is valued at an average of Rp 1 trillion to Rp 2 trillion.

The Jakarta Composite index dropped Teusday to 1344.15 from Monday's 1350.69 due to negative sentiment from the gloomier US financial market. Indonesian stock investors are still felling the pinch of the global stock market rout. 

Panin seeks to buy ailing Sarijaya: IDX

The Jakarta Post, Jakarta | Wed, 01/21/2009 12:14 PM  

PT Panin Sekuritas, a unit of financial giant Panin Group, is planning to take over ailing securities company PT Sarijaya Sekuritas. 

Indonesian Stock Exchange (IDX) director Erry Firmansyah said Tuesday it had received a letter of intent from Panin Sekuritas. 

“We have received the official letter from Panin but have yet to arrange any further meeting,” Erry told reporters. Panin Sekuritas confirmed its interest in Sarijaya. 

“The plan is just part of our expansion, especially on retail customers,” said Panin Sekuritas corporate secretary Prama Nugraha, refusing to disclose the cost of the takeover. 

Panin has six branches in Jakarta, Medan, Bandung and Surabaya, serving 5,000 clients.  

Its operation is far smaller than Sarijaya, which has 48 branches in Java, Bali, Sumatra, Kalimantan and Sulawesi serving 8.700 clients --  6,000 of which are retail customers. 

“Despite the ongoing investigation on Sarijaya, we will continue to probe the performance of the firm,” said Prama. 

Sarijaya, one of the country’s biggest securities firms, has been under strict supervision since the IDX and the Capital Market and Financial Institution Supervisory Agency (Bapepam-LK) spotted an alleged scam by the firm’s president director, Herman Ramli. 

The scam has caused a loss of at least Rp 245 billion (US$22.5 million) of investor’s money. 

The IDX suspended Sarijaya’s trading  as from Jan. 6,  while Bapepam froze its assets and accounts. 

Due partly to the scam, Sarijaya’s minimum net adjusted working capital plunged to negative Rp 5.6 trillion from the required minimum level of Rp 25 billion. 

Aside from Panin, at least three other investors, including Trimegah Sekuritas, a consortium of investors from Hongkong, Melbourne in Australia and Indonesia, and an independent local investment consortium led by Vier Jamal, have announced interest in Sarijaya. 

“But we have yet to receive any official notification“ Erry said. 

Erry also said the IDX had completed talks with Vier Jamal, and had agreed to halt any further negotiation while waiting for the progress of the ongoing prosecution. 

Vier Jamal would allocate Rp 400 billion for acquiring Sarijaya. This included Rp 250 billion for restructuring and recovery purposes with the remaining Rp 150 billion for business expansion. 

Lotte Group to invest Rp 9 trillion in Indonesia

The Jakarta Post, Jakarta | Wed, 01/21/2009 12:52 PM  

Lotte Group, a South Korean retail giant, will invest Rp 9 trillion (around US$870 million) in the next four years, aiming to become the leader in the country’s lucrative retail market. 

Through a subsidiary PT Lotte Shopping Indonesia — which took over hypermarket chain PT Makro Indonesia last year, the Group plans to build 26 new outlets up until 2013, under the brand ‘Lotte Mart’ to replace the previous ‘Makro’ brand. 

By 2013, there will be 45 Lotte Mart outlets spread across Indonesia, Lotte Shopping president director Moon Young Pyo told a media conference Tuesday, contributing around 16 percent to the Group’s global sales valued at about Rp 17 trillion. 

“We expect to be the No. 1 retailer in Indonesia in five years,” Moon said.

At the moment, the existing Indonesian subsidiary contributes about 10 percent of the global earnings of the Group. 

“We target Rp 5.7 trillion of revenue for this year, increasing by 20 percent up on Makro Indonesia’s revenue last  year,” Moon said. 

Globally, there are 91 Lotte Marts in Korea, China, Indonesia and Vietnam. In Korea, its subsidiary Lotte Mart currently holds a market share of 20 percent. 

Before the acquisition, Makro hypermarkets, which employ around 2,200 workers, targeted consumers such as resellers, hotels, and restaurants, to buy goods wholesale and in large volumes using membership systems.

According to Moon, Lotte Mart will maintain Makro’s membership system, as well as combining it with their own ‘loyal customer’ system. 

He added the company would use the strategy of selling specific products at specific prices for certain areas according to their needs. 

“Lotte Mart will double its product diversity to 30,000 categories,” he added. 

“Lotte Group is targeting Rp 63 trillion in worldwide revenue this year,” Lotte Mart CEO Noh Byung Yong said. 

According to Noh, the company sees a huge potential in Indonesia due to its growing retail market and large population of well over 220 million. 

“The nation’s economic growth has also been constantly above 6 percent, which is a good sign.” 

Lotte Group, whose assets are recorded as being 31 billion euro with a net profit of 23 billion euro in 2007, acquired all of PT Makro Indonesia’s shares from SHV Holdings NV in October last year. 

The group, recognized as the fifth largest in Korea, spent $221 million to buy 75 percent of Makro shares through Lotte Shopping before acquiring the rest through its  subsidiary in Singapore. 

The Group also pledges that no dismissals would take place after the takeover. 

“There will be no layoffs of Makro workers,” Lotte Shopping operational director Jusuf Halim said. 

“We are also keeping our suppliers up to date with this news.” He added that Makro worked with 1800 local suppliers in Indonesia. 

Lotte’s massive expansion will pose a tough challenge for other retailers, including European giant Carrefour SA, which has strengthened its presence in the country by taking over PT Alfa Retailindo last year. (dis)