Indonesia Ciputra eyes 1.2 trln rph projects-paper

Reuters - 2006-12-28 14:26:21

JAKARTA, Dec 26, 2006 (Reuters) - Indonesian property developer, PT Ciputra Development Tbk (CTRA.JK: Quote, Profile , Research), plans to build 1.2 trillion rupiah ($132.2 million) worth of projects that were delayed by the Asian economic crisis, a local newspaper said on Wednesday.

Investor Daily reported Ciputra finance director Tulus Santoso as saying the firm, through its subsidiary PT Ciputra Adigraha, plans to develop a shopping mall, a hotel and an apartment building in Jakarta in the first quarter of 2007.

Ciputra started the project in 1996 but the economic crisis in 1997-1998 forced management to halt development.

"After several delays, the management decided to continue the projects," Santoso was quoted by the business newspaper as saying.

PLN will sign power plant contracts despite protest

Ika Krismantari, The Jakarta Post, Jakarta

Defying protests from other bidders, state electricity firm PT Perusahaan Listrik Negara (PLN) will go ahead with its plan to sign a letter of intent next week to formally name China National Technical Import & Export Corp. (CNTIC) and Harbin Power, also of China, as the winners of the tender for the construction of two 600 megawatt coal-fired power plants in Suralaya in Banten and in Paiton in East Java, respectively.

PLN director of power plants and primary energy Ali Herman said in Jakarta on Friday that the final contracts with the two companies would be signed on Jan. 19.

"There will be a process for adjustment and renegotiation before the contract signing," Ali said.

Commenting on protests from other bidders, he said that PLN would stick to the tender committee's decision on the winners of the two power projects.

On Dec. 8, CNTIC was selected as the winner of the tender for the construction of the Suralaya Baru power plant in Suralaya, Banten, and Harbin as the winner for the construction of the Paiton Baru power plant in East Java, based on the consideration that the two companies offered the cheapest prices for the construction of the two power plants.

According PLN's calculations, CNTIC offered the lowest price of Rp 378 (3 U.S. cents) per kilowatt hour (kWh) for constructing the Suralaya power plant, while its competitor, the Shanghai Maxima consortium offered Rp 378.97 per kWh, the Dongfang-Dalle-HEPEC consortium Rp 379.97 per kWh and the Marubeni-Doosan-PT Tripatra-PT MCC consortium Rp 414.59 per kWh.

For the Paiton power plant, Harbin submitted the lowest price of Rp 385.76 per kWh, while other bidders, the Shanghai Maxima consortium Rp 398.42 per kWh, the China Huadian-PT DGI consortium Rp 420.95 per kWh and the Marubeni-Doosan-PT Tripatra-PT MCC consortium Rp 421.07 per kWh.

However, other bidders, including China Huadian and Dongfang, say that they made better offers with better plant specifications.

In its objection materials, China Huadian said that its offer was $378 million cheaper than the one offered by Harbin Power because it needed only eight months to complete the construction works, shorter than the 36 months offered by the winner.

The objection addressed to CNTIC was submitted by Dongfang, saying that the machine used by the winner had emission was above the normal rate of 750 milligram ---- per cubic meter.

In response, Ali said that the duration for projects had been determined based on PLN's due diligence, saying that the period of 36 months was the most ideal for the construction project.

"All the bidders have also agreed on the duration of 36 months in the first offer. So, it would be not fair to also evaluate the one who offered 28 months," Ali said.

Commenting on the emission issue, he said that he could guarantee that the coal which would be used for the project was the highest quality and contained little sulfur.

He said that if the bidders remained dissatisfied with the result, they could take a legal action, while PLN would stick to its schedule for the projects as part of the government's "crash program".

The program, which is aimed at helping prevent power shortages and cutting the nation's dependence on oil-based fuels for generating electricity, is targeted for completion by 2009.

Ministry to build tsunami escape buildings

DENPASAR (Antara): The Culture and Tourism Ministry will construct tsunami escape buildings in several coastal resort areas, Culture and Tourism Minister Jero Wacik said Tuesday.

"The buildings will be built on beaches which can be used to evacuate tourists and locals in the event of tsunami," Jero said.

"Each building will have the capacity to accommodate 400 to 500 people."

Jero was speaking at the sidelines of a tsunami evacuation drill in Sanur Beach together with State Minister of Environment Rachmat Witoelar and State Minister of Research and Technology Kusmayanto Kadiman.

The escape buildings will be constructed in Bali first then in Pangandaran Beach, West Java and later in West Sumatra. Each building needs a plot of land between 400 to 500 square meters to be provided by local regency or mayoralty administration.

A pilot project will be built in Nusa Dua area where Bali Tourism Development Company has provided a 500-square-meter plot of land. The escape building is to be completed next year.

Jero said escape buildings for other coastal areas would be built in stages depending on the availability of the ministry's budget while welcoming local administrations who wanted to build their own facilities with their own budget.

"This will accelerate the ministry's program to provide safe and secure feelings for holidaymakers," he said

Government retenders four major power projects worth $1.2 billion

Ika Krismantari, The Jakarta Post

The government is reopening the tender for the construction of four power plants worth US$1.2 billion to be built as part of the fast-track program to provide additional electricity supplies of about 10,000 MW by 2009.

President director of state electricity utility PT Perusahaan Listrik Negara (PLN) Eddie Widiono said in Jakarta that the four projects were being retendered because only one of the bidders had satisfied the tender requirements.

The four coal-fired power plants consist of the Banten power plant with a capacity of 300 MW in Teluk Naga, Banten, the 300-MW Pelabuhan Ratu power plant in West Java, the 300-MW Pacitan power plant in East Java and the 600-MW Tanjung Jati power plant in Tanjung Jati, Central Java.

"Those interested in bidding must submit their bids by Dec. 27 at the latest," Eddie said.

He said that the three 300-MW power plants had attracted 24 bidders, while the 600 MW power plant had attracted bids from 19 local and overseas companies.

However, as only one of them was qualified to enter the final round of bidding, the tender, which was launched in July, had been canceled.

A government regulation states that a tender will only be valid if at least three bidders progress to the final round of bidding.

"We hope that the four power plants will be able to commence commercial operations in October 2009," said J. Purwono, the director general for electricity and energy use at the Energy and Mineral Resources Ministry, adding that the winners of the second tender would be announced in April 2007.

The power plants are being put out to tender as part of the government's 10,000 MW "crash program" launched in March, which is aimed at preventing power shortages and cutting the nation's dependence on oil-based fuels for electricity generation.

In October, PLN opened the tenders for the construction of 30 power plants outside of Java and Bali islands, including nine power plants in Sumatra and surrounding islands with a total capacity of 1,428 MW, as well as plants with a capacity of 220 MW in Sulawesi and 400 MW in Kalimantan.

The government has estimated the cost of infrastructure development in the power sector will reach $41.3 billion between 2006 and 2016, including $8 billion under the crash program.

"Considering the limited funding resources for power-sector development, private sector participation in power generation will be encouraged, while transmission and distribution will continue to be handled by PLN," Purwono said.

USAID to help agribusiness to tune of $13.75m

The Jakarta Post, Jakarta

The United States Agency for International Development (USAID) will provide aid worth US$13.75 million over three years in the form of equipment and technical assistance to help the government develop the agribusiness sector, it was announced Thursday.

The scheme, called the Agribusiness Market and Support Activities (AMARTA) program, will be implemented through USAID's main office in Jakarta, as well as its regional offices in Medan, Makassar and Denpasar, in partnership with the U.S.-based development consulting firm, Development Alternatives Inc.

"USAID has awarded a contract to Development Alternatives Inc., of the state of Maryland, to implement the AMARTA project. So, these funds will be disbursed via Development Alternatives Inc," David J. Anderson, chief of party of AMARTA, said Thursday during the launch of the program in Jakarta.

Each office will forge cooperation with the private sector, industry associations, the government, NGOs, chambers of commerce and industry and other stakeholders for the purpose of jointly developing the agribusiness sector in Indonesia, said David.

Under the program, eight sectors would be prioritized: cocoa, coffee, high-value horticultural products (fruit and vegetables), fishing, spices, biofuels and livestock.

"The ultimate goal is to improve productivity and the quality of products so as to ensure better market access," said William M. Frej, USAID's mission director.

Qualitywise, Indonesia's cocoa, for instance, is between 60 and 70 percent below international market standards.

"One of the aims of this project is to improve the quality of the cocoa exported to the U.S. so that we can secure incentive bonuses, rather than a 10 percent reduction from the normal price," said Syukur Iwantoro, head of the Agricultural Quarantine Unit at the Agriculture Ministry.

"After finishing our assessments, we will have identified the primary interventions for the program in collaboration with the stakeholders by the end of 2007," said Anderson.

In general, the AMARTA program will provide assistance such as training, capacity-building, consultation, promotion and facilitation in the agribusiness sector.

Jakarta airport using iris scanner

The Age Company Ltd

Jakarta's busy international airport has introduced an iris scanner system aimed at business travellers willing to pay around $US200 ($A255) per year to avoid long immigration lines.

Under the "Saphire" program, frequent flyers register with the immigration authorities, pay the annual fee, and submit to scans of their left and right eyes, which authorities say are as individual as prints of the fingers or palm.

On arrival, users scan one eye and are cleared for entry, a process expected to take about 10 seconds.

The Indonesian-Dutch venture behind the project says the main thrust of the program was one of convenience, although they hoped that speeding through registered users would allow the authorities more time to scrutinise other travellers for possible security threats.

Australian and US authorities sounded warnings this week of possible attacks on Western targets in Indonesia over the Christmas and New Year period.

The country has been relatively calm lately, with no major attack since suicide bombings on the resort island of Bali in October 2005.

"The government always takes precautionary measures to ensure safe travelling within Indonesia, eventually gaining back trust from the international community," Hamid Awaludin, minister of Law and Human Rights, told an opening ceremony for the scanners.

A spokesman said 550 passengers have already registered to use the service, which is offered by the Schiphol Group, an airport operator based in the Netherlands, and PT (Persero) Angkasa Pura II, Indonesia's state-owned airport managers.

The operators plan to expand to other Indonesian airports and hope to attract at least 20,000 users, mostly Indonesian nationals.

A similar system in the Netherlands has 33,000 members, they said.

Kuwaiti firm eyes gas-to-liquid plan

KUFPEC to build a gas-to-liquid processing plant in Konebada

The National, Papua New Guinea

SYNTROLEUM Corp announced yesterday that it signed a deal with Kuwait Foreign Petroleum Exploration Co on the development of a 50,000-barrel-per-day gas-to-liquids (GTL) facility in Papua New Guinea. This agreement follows the formal statement of support for the GTL facility by Prime Minister Sir Michael Somare. The Prime Minister’s endorsement had paved the way for the grant of priority status to GTL facility.

It was also designated as a lead project in the country’s effort to create a domestic gas monetisation industry using a portion of its significant gas resources. When completed, the plant will produce 50,000 barrels per day of syntroleum ultra-clean S-2 diesel and other high-valued ultra-clean products.

This will make Papua New Guinea one of the few countries where ultra clean, environmentally friendly GTL fuels are produced. The plant will become an anchor facility in the newly-created Konebada Petroleum Park just outside of Port Moresby.

“This is a great achievement for Syntroleum. We have completed our feasibility study, received the PNG Government’s strong support, and have been joined in the project by one of the world’s leading oil and gas exploration companies, KUFPEC. “We are pleased that the project is moving forward with such support,” Jack Holmes, president and CEO of Syntroleum, said.

“Our focus now is to put in place the major contracts for the facility and move to financing.”

KUFPEC’s chairman and managing director Bader N Al-Khashti said: “KUFPEC is excited to be part of the GTL project in PNG with Syntroleum. This project is a stepping stone for us to embrace downstream monetisation of gas resources.”
Syntroleum owns a proprietary process for converting natural gas or synthesis gas derived from coal and other arbon-based feedstock into synthetic liquid hydrocarbons.

The company plans to use its technology to develop and participate in natural gas and coal monetisation projects in a number of global locations.

KUFPEC, formed in 1981 by its parent company, KPC, is an international energy company engaged in the exploration, development and production of crude oil and natural gas in Africa, the Middle East, Asia and Australia. KUFPEC has offices in Kuwait, Tunisia, Indonesia, Australia and Pakistan.

Huawei Keeps Focusing on Indonesian Market

Wednesday, 20 December, 2006 | 17:22 WIB

TEMPO Interactive, Shenzhen: Huawei Technologies Co. Ltd., a telecommunications solution company from China, will not only sell its products at cheap prices.

However, according to Fu Jun, Huawei’s global spokesperson, the company’s products are as competitive of those of other companies.

This was in response to suspicion that this Chinese manufacturer has always offered cheap products of low quality.

Jun explained that cheap prices were made possible by efficient product processing.

For instance, said Jung, there were only 25 persons that produce chipsets in the manufacturing division, with robots handling almost all tasks.

In fact, this company has operated in 100 countries including the USA, France, Spain and Japan.

“We have also patented around 16,000 products,” said Jun in Shenzhen last week.

This was also the basis of the cheap price: not having to spend out on copyright payments.

Huawei is the Chinese company with the most amount of its own patented inventions.

Ninety percent of the 16,000 products were Huawei's inventions and 48 percent of its 44,000 employees worked in the company’s research and development division.

Last year, Huawei acquired contracts value at US$8.2 billion.

“This year, we estimate that the total will be US$11 billion,” said Jun.

In Indonesia, Huawei signed a contract with PT Telekomunikasi Indonesia Tbk last month.

Together with another Chinese company, China ZTE, Huawei won the tender for the code division multiple access project worth Rp722 billion.

Herry Gunawan (Shenzhen)

Seadrill Secures New Tender Rig Contract in Indonesia

HAMILTON, Bermuda, Dec. 21, 2006 (PRIME NEWSWIRE) -- Seadrill has been awarded a letter of intent by ConocoPhillips for development drilling in Indonesia. The contract has a duration of three years with commencement scheduled for the fourth quarter 2008/first quarter 2009. Estimated contract value is approximately US$178 million. Seadrill has the option to use either West Berani or West Setia for this assignment.

The final contract is subject to agreement on contractual terms as well as Indonesian governmental approval.

Total's Indonesian Unit to Invest $8B in Gas

AFX News Limited / rigzone - 2006-12-21 09:48:09

12/20/2006 (AFX News Limited / rigzone)PT Total E&P Indonesie, a unit of France's Total, is planning to invest around US$8 billion from 2007 to 2015 in order to maintain current levels of gas output from the Mahakam Block in East Kalimantan, company spokesperson Ananda Idris said.

"It will be good enough if we are able to maintain our output at the current level in coming years given that gas firms are generally experiencing depleting production," Idris told XFN Asia.

He said the company will focus on developing three fields in Mahakam Block -- Tunu, Peciko and Sisinubi blocks.

Idris said of the US$8 billion investment, Total may earmark US$1.6 billion for capital expenditure next year in order to keep output at the present level of 2.6 billion cubic feet a day through next year.

All the natural gas from Total's fields is supplied to the nearby liquefied natural gas (LNG) processing plant in Bontang.

The Bontang LNG plant is 50 percent owned by state oil and gas firm PT Pertamina. The remaining 50 percent is held by a consortium comprising Total and Chevron with 35 percent, and Japan Indonesia LNG with 15 percent.

Water Financing Program 2006-2010

Water Makes WFP Countries Grow

Asian Development Bank

Under its new Water Financing Program (WFP), the Asian Development Bank (ADB) is offering to double spending on water projects as a means for ramping up investments in infrastructure that is critical to capturing and sustaining the huge new opportunities emerging in Asia’s booming economies.

WFP will initially focus on six countries that believe in water to either support or juice up their growth rates.

Read More ....

AMEC Lands Two Engineering Contracts in Indonesia

AMEC/Rigzone - 2006-12-20 09:45:26

Jakarta,12/19/2006 (AMEC/Rigzone) - AMEC Berca Indonesia (ABI), AMEC's wholly Indonesian joint venture company with CCM Group, based in Jakarta, has been awarded two oil and gas engineering contracts in Indonesia.

The first is for Premier Oil Natuna Sea BV, who will be carrying out production capacity enhancement and upgrade projects to its West Natuna facilities. ABI's scope of work will include provision of basic and detailed brownfield engineering services.

The second contract is for onshore engineering and design work on TOTAL E&P Indonesie's Tatun Oily Water Platform. ABI's contract was awarded by main contractor PT Meindo Elang Indah (Meindo), for services on the TOTAL operated facilities at the Tatun Production Unit (CPU), located on the Mahakam River delta in Kalimantan, Indonesia.

With the aim of improving performance of the present oily water treatment system and complying with environmental requirements, TOTAL has decided to upgrade the existing system with the construction of a new 800-tonne pile-mounted oily water treatment platform, related offsite facilities and modifications to existing facilities, to be constructed to the south-east of the existing TCP Platform.

As design subcontractor, ABI will be responsible for the overall performance of detailed engineering work, including pre-engineering, survey, detailed engineering, maintenance engineering and final documentation. The engineering phase will be completed in May 2007, with the platform due to commence operation in December 2007.

Germany swaps $24m debt for education in Yogyakarta

Urip Hudiono, The Jakarta Post, Jakarta

The German government has provided a 20-million-euro (US$24-million) debt swap to Indonesia to support the rehabilitation of schools in Yogyakarta and Central Java that were devastated by an earthquake earlier this year.

Germany has also provided another 6 million euros in additional grants, bringing the total amount of money involved to 26 million euros, for post-tsunami housing reconstruction in Aceh and Nias.

The agreement on the debt swap and grant was signed Monday between the Finance Ministry's director general for debt management, Rahmat Waluyanto, and German Development Bank (KfW) vice president for Asia Pacific, Hans-Peter Mssig.

The debt swap is the fourth and last tranche of earlier schemes that Germany provided to Indonesia, worth some 93.6 million euros so far.

In 2004, Germany provided 25 million euro in a debt swap for nature scheme to enhance the environmental awareness of SMEs and the protection of natural parks, following a debt swap worth 23 million euros earlier the same year for improving junior high school education in eastern Indonesia, and 25.6 million euros in 2002 for elementary education.

Under the latest debt swap scheme, Germany will cancel up to 20 million euros of debt after Indonesia sets aside half of the amount for rebuilding 213 primary and junior high schools in Yogyakarta and Central Java.

Indonesia's total debt to Germany stands at some 1.1 billion euros. Current project loans include 443.5 million euros for transportation, health, education, the environment and telecommunications.

Germany's grants for the post-tsunami reconstruction work in Aceh and Nias, meanwhile, totaled 250 million euros.

Rahmat welcomed the debt swap schemes, saying they were a mutually beneficial solution to the debt problem. The government will remain prudent in managing the country's debt, he said, and will only accept other debt swap schemes whose terms and conditions are feasible.

Mssig said that although the latest debt swap scheme was the last in the series, Germany might consider future ones following an assessment of their benefits to the welfare-improvement effort in Indonesia.

Other creditor countries have also been considering debt swap schemes for Indonesia, although no progress on these has been made to date.

RI to become base for LG products for Asian, Australian markets

Jakarta (ANTARA News) - South Korean electronics producer LG Electronics Corporation is planning to make Indonesia a base for production of four types of domestic appliances for the Asian and Australian markets.

"We are planning to make Indonesia a base for the production of LCD televisions, plasma televisions, refrigerators and audio videos for the Asian and Australian markets," PT LG Electronics Indonesia (LGEIN) General Manager Budi Setiawan said here Tuesday.

The plan would be implemented in stages until 2007 when the company would relocate its two-door refrigerator plant from South Korea to Indonesia, he said.

Once the relocation had been completed, the production base would have a capacity of producing 1.6 million LCD televisions, flat and plasma televisions and 1.8 million refrigerators, he said.

Unfortunately, the production of domestic appliances still would be highly dependent on imported components, he said.

"Actually, we want to use local components but many of them do not yet meet the required standards because our products must be acceptable to the international market," he said.

Due to the decision to make Indonesia a base for the production of LCD televisions, plasma televisions, refrigerators and audio videos, the company relocated its air conditioner plant from Indonesia to Thailand last year, he said.

He stopped short of mentioning the amount LGEIN would invest next year to make Indonesia a base for the production of several types of domestic appliances.

LGEIN`s sales are projected to reach US$314 million in 2006 compared to US$251 million a year earlier.

The company expects its sales in 2007 to increase to US$408 million.

Proposed Loan and Technical Assistance Grant (ADB)

Asian Development Bank, November 2006

The Project supports the Government’s efforts to improve madrasah education so it meets national education standards, within the Government’s broader education policy and strategic framework. The Project will cover primary, junior, and senior secondary private and public madrasahs in 27 poor districts of Central Java, East Java, and South Sulawesi provinces.

The Project will benefit 120,000 students in 500 madrasahs.

The Project will support a mixture of demand- and supply-side interventions to enable project madrasahs to (i) improve teacher professionalism; (ii) upgrade teaching–learning resources and facilities; (ii) increase their internal efficiency; and (iii) strengthen their governance, management, and sustainability. The Project will help madrasahs meet national education standards according to the needs identified in madrasah development plans, through a range of interventions, including teacher qualification upgrading and professional certification, provision of substitute teachers, and teaching skills development; upgrading or expansion of facilities (classrooms, libraries, and laboratories); and provision of teaching–learning materials. These interventions will be selected by individual madrasahs according to their development needs.

The Project will enhance the internal efficiency of project madrasahs by increasing enrollment, decreasing dropout and repetition rates, and increasing completion rates at all levels through remedial and scholarship programs, particularly for poor and female students. Governance, management, and financial sustainability of project madrasahs will be improved through training and performance-based madrasah development planning and management, and advocacy programs to enhance the perception of madrasah education quality and encourage stakeholder participation to ensure better resource mobilization and transparency.

Read More : Madrasah Education Development Project (Indonesia) [PDF]

Govt to allocate another Rp600 billion for Suramadu bridge

Sumenep, E Java (ANTARA News) - The House of Representatives and the government have agreed to allocate another Rp600 billion in fund for the completion of much-awaited Surabaya-Madura (Suramadu) bridge, a lawmaker said.

"Both the executive and legislative bodies have agreed to allocate additional fund for the completion of Suramadu bridge," Ilyasi Siraj of the House Commission V for transportation, telecommunications, public works, public housing and rural development said here Tuesday.

The government has expected to complete the construction of the bridge which will connect Java and Madura Islands in 2008.

The construction of the bridge which will consist of causeway, approach bridge and main span will cost an estimated Rp3,270 billion.

Siam Cement Industry aims to dominate Asean

Chalida Ekvitthayavechnukul, Somluck Srimalee / Th - 2006-12-18 10:14

Thailand, December 18, 2006 (The Nation) - Siam Cement Industry, a subsidiary of Siam Cement Group, aims to be the leading company in Asean in line with its parent company's policy of boosting the proportion of its international business up to 20 per cent of total revenue in five years.

The company's international business will start next year when its new plant in Cambodia starts operation.

President Pramote Techasupatkul said the company was always looking for the opportunity to expand business in other countries, particularly in Southeast Asia.

It will establish two plants in Indonesia and another two in Vietnam with a total investment of Bt300 million next year, all of which will produce ready-mixed cement, he said.

He said both Indonesia and Vietnam had high demand for cement thanks to the growth of their populations and economies. The company plans to penetrate Indonesia's market by being a small producer, because Indonesia already has a few giant cement-manufacturers.

He added that the competition in the cement business in Vietnam was not too tough because there were only small and medium-sized cement-producers there.

Pramote said the company was considering a location in Vietnam to set up a cement plant but the problem was the distance between sources of raw material and the market.

The company also expects to realise revenue from its four new plants next year. Siam Cement Industry has invested Bt3.5 billion to construct a cement plant in Cambodia, which has a production capacity of one million tonnes per year. This plant will start operation and the company realise revenue in the beginning of 2008.

It presently exports about seven million tonnes per year. The main destinations are countries in South Asia such as Bangladesh and Sri Lanka, the Southeast Asia region and the US. It also exports 5-10 per cent to the Middle East.

He said the company would lessen its exports to the US next year because of the country's economic slowdown and increase export proportion to South Asia and the Middle East.

He believed that the growth of domestic cement demand in the coming year would be flat because of weak consumer confidence in the economy and the continued pressure from energy costs. He forecast that export volume in the fourth quarter would shrink due to weaker demand from the US. Operating profit may drop by 19 per cent year on year owing to higher energy costs, he estimated.

However, the company has to develop a new premium product to meet with the customer demand.

"The cement industry has to develop its products to focus on niche markets," he said.

He added that the company had invested Bt100 million in research to develop new products this year and would invest another Bt200 million next year.

"Research and development will be our tool to develop our product to compete with our rivals and create a value-added product. That may be boost our margin," Pramote said.

The cement industry generated 26 per cent of Siam Cement Group's total revenue of Bt207.21 billion in the first nine months of this year.

Malaysia's Plus Expressway buys stake in Indonesian road project

Jakarta (ANTARA News/Asia Pulse) - Malaysia's Plus Expressway Berhad (KLSE:5052) has acquired a 55 per cent stake in the Cikampek-Palimanan toll road project from PT Lintas Marga Sedaya.

With the acquisition, Lintas Marga Sedaya has been reduced to a minority shareholder with a 45 per cent stake in the 116 kilometer toll road project valued at Rp5.9 trillion (US$655 million).

Lintas Marga president Sandiaga S. Uno said construction of the project could start earlier with the take over by Plus Expressway, the largest toll road investor in Malaysia.

Ground breaking is expected to take place in the second quarter of 2007, after financial closing in the first quarter.

Govt projects to be tendered before start of fiscal year

The Jakarta Post, Jakarta

Government agencies will be allowed to hold tenders for projects before the start of the fiscal year so as to expedite government spending and keep economic growth on track next year.

State Minister for National Development Planning Paskah Suzetta said in Jakarta that his ministry wanted public spending on procurements and development projects to account for a minimum of 25 percent of the 2007 total within the first quarter,

"Projects must immediately be rolled out and use up their disbursed funding allocations," Paskah was quoted as saying by Antara.

"This is necessary so as to ensure there will be an increase in spending in order to support economic growth," he explained.

He said that a large amount of funds under this year's budget had not been spent due to delays affecting procurement tenders.

Paskah acknowledged some difficulties could arise from the new policy, particularly the lack of advance funding for preparing project tenders. However, he argued that all government agencies should have special funds set aside for this out of their own budgets.

"I have told them to do that, or at least come to an arrangement whereby preparation costs can be paid afterwards," he said.

To date, only the State Ministry for Cooperatives and SMEs has held a tender for a project before the start of the fiscal year. This was for the procurement of gas canisters as part of the government's program to replace kerosene stoves in Greater Jakarta next year.

The need to speed up public spending is highlighted by the latest figures from the Finance Ministry, which show that actual government expenditure on the procurement of both durable and capital goods as of the end of November still fell short of the allocations made under the revised 2006 budget.

Spending on durable goods only amounted to Rp 33.3 trillion (US$3.6 billion), or 59 percent of the total allocation, while spending on capital goods stood at Rp 39.5 trillion, or 57 percent of the total allocation. The government has set aside a total of Rp 125.7 trillion for the procurement of both durable and capital goods this year.

It is expected that only some 70 percent of these allocations will be spent by the year's end. This means that the other 30 percent of the funds will be retained by the Finance Ministry.

Director General for the Treasury Herry Purnomo said the shortfall in this year's spending was mainly due to the failure by many government agencies to properly prepare their projects.

There are also indications that much of the money paid out to the regions has been put into central bank treasury bills (SBI), with allegations in the media that project executive officers frequently do this for personal gain.

Herry said that undisbursed funds would not be carried over into next year's budget.

Although the shortfall in spending may balance out a similar shortfall in this year's tax revenues, resulting in Finance Minister Sri Mulyani Indrawati's statement that the budget deficit may possibly come in lower than previously estimated at 1.1 percent of gross domestic product (GDP), it still means bad news for growth.

With people's purchasing power still recovering from last year's fuel price hikes, Indonesia's consumption-driven economy slumped to a low 4.6 percent growth in 2006's first quarter, before rebounding to 5.1 percent and 5.5 percent in the second and third quarters respectively.

This came as government and recovering consumer spending began to crank up the country's economic engine.

European Commission happy with Indonesian projects

The Jakarta Post, Jakarta

Juan Casla, the program manager for European Union-Indonesian economic cooperation, said Friday that the EU-Indonesia Small Projects Facility Program, which was initiated in 2003, has been so successful to date that several more projects were planned for 2007.

"We have received continuous responses for a number of proposals and an increase in approvals for projects, which is very good and in line with our hopes," he said during the wrap-up session on projects selected under the 2004 third call for proposals.

A total of nine projects worth 907,023 euros (about US$1.1 million) were completed in the fourth quarter of 2005. They included the University of Indonesia (UI)'s "Economic Impact Study on Counterfeiting in Indonesia"; an Indonesia-Netherlands Association (INA)'s program titled "Promotional Website and Management Support for Export Design Handicraft and Interior Decoration Products"; and the Indonesian-French Chambers of Commerce and Industry's program titled "Capacity-Building in Indonesian Water Utilities".

The projects covered areas such as investment and the business climate, export marketing and promotion, and infrastructural development.

The UI study received a positive response from the government, and resulted in the establishment of the National Intellectual Property Rights Task Force, and more frequent raids on counterfeit products by the National Police and the Food and Drug Surveillance Agency.

The INA's website for handicraft producers resulted in the total volume of exports to Europe in this sector rising to 400,000 euros, while the IFCCI's water management training, workshops and pilot projects in four local-government water utilities -- in Makasar, Banjarmasin, Manado and Palembang -- resulted in a reduction in water leakage

The EU-Indonesia Small Projects Facility Program has provided grants amounting to 5.77 million euros and has approved 40 projects over the course of three years.

Thirteen projects from the fourth and fifth calls for proposals worth 2.32 million euros are still underway.

Six more projects, valued at 845,233 euros, were approved this month and are ready to start in January 2007. In line with policy, these projects will also receive initial funding of 80 percent of the total amount allocated, with the rest being disbursed at the end of the projects.

Jean Breteche, the EU's Ambassador here, said that after the completion of the 19 projects, new proposals would be announced by the end of 2007.

He added, "These projects are not huge but they are very efficient and to the point in helping economic development in Indonesia."

Expanding Aquaculture Production for Indonesia's Poor Fish Farmers

14 December 2006, Asian Development Bank

MANILA, PHILIPPINES - ADB will help boost the incomes of 14,000 poor fish farmers in Indonesia through a loan of US$33.3 million to enhance aquaculture production and productivity in select provinces.

The Project will support a Government program to promote community-managed freshwater, brackishwater, and marine aquaculture development among poor communities of the country.

It will be carried out in five districts of four provinces: Langkat in North Sumatra, Ogan Omering Ilir in South Sumatra, Karawang and Sumedang in West Java, and Buton in Southeast Sulawesi.

Aquaculture plays an increasingly significant role in Indonesia’s economy, employing about 2.5 million people, providing an important source of nutrition and generating valuable foreign exchange earnings and domestic revenues.

However, poor fish farming systems and lack of good quality fish and shrimp seed, along with growing environmental degradation and pollution, are holding back the sector. Other problems include lack of access to credit for smaller fish farmers, absence of marketing infrastructure, and user conflicts in open water areas.

The project, officially known as Sustainable Aquaculture Development Project, will focus on small-scale and low-cost systems that are economically sound and environmentally friendly, and that can easily be replicated by larger entrepreneurs and organizations.

It will include pioneering new schemes to help organized fish farmer groups in establishing microenterprises and marketing their products, assisted by community based and nongovernment organizations. Key public aquaculture facilities will be rehabilitated along with associated access roads.

The project will also help the Directorate General of Aquaculture (DGA) and participating district governments to formulate policies and regulations for aquaculture development and environmental management.

“Besides the increase in aquaculture production, incomes and jobs, the project is expected to generate more general benefits,” says M. Jamilur Rahman, an ADB Principal Project Specialist. “These include a cleaner environment and better health and nutrition among rural populations from overall expansion of the food supply, given that fish is a staple in Indonesia.”

The total project cost is $44.5 million, of which ADB’s contribution accounts for almost 75%. The loan is from ADB’s concessional Asian Development Fund, carrying a 32-year term, including a grace period of eight years. Interest is charged at 1% per annum during the grace period and 1.5% per annum for the rest of the term.

Other contributors to the project are the national and district governments ($8.46 million) and beneficiaries ($2.76 million).

The DGA of the Ministry of Marine Affairs and Fisheries is the executing agency for the project, which is due for completion around the end of 2013.

Project Proposal: Sustainable Aquaculture Development for Food Security and Poverty Reduction Project (Indonesia) [PDF]

About ADB

Mitsubishi to invest in Sulawesi LNG plant

Jakarta (IOGNews) -Indonesian state oil company Pertamina has formed a joint venture with Japan’s Mitsubishi to build a 2 million tonne per annum liquefied natural gas plant in Sulawesi.

The project is expected to cost about 1 billion dollar with Mitsubishi's share estimated at between 600 million dollar and 800 million dollar.

Construction will begin as early as 2007, with completion targeted in 2009. LNG produced at the facility will be shipped to Japan, reported Japanese daily Nihon Keizai Shimbun.

Three Japanese companies in the power and gas industry have already expressed interest in purchasing LNG from the new plant.

Truba and Shanghai team up for $260 million power projects

Ika Krismantari, The Jakarta Post - 2006-12-15 15:56

Jakarta, 15 December 2006 (The Jakarta Post) - China's largest electrical and mechanical equipment manufacturer, Shanghai Electric Group (SEG), formally teamed up Thursday with local company PT Truba Alam Manunggal Engineering (TAME) to build coal-fired power plants worth US$260 million in Lampung and Kuala Tanjung, North Sumatra.

The two companies signed the memorandum of understanding for the projects after being directly appointed earlier this year by state-owned power utility PT Perusahaan Listrik Negara (PLN) to help overcome the energy crises afflicting the two areas.

TAME president director Arifin Wiguna said that the two companies would start work on the construction of a 50-Megawatt (MW) power plant in Lampung and a 250-MW power plant in Kuala Tanjung in 2007.

"Thirty percent of the investment will come from our company, while the other 30 percent will be from SEG, with the remainder being financed by loans from local banks," he explained.

Arifin said that after the two plants had been completed, the power from the coal-fired plant in Lampung would be supplied to the Centra Pertiwi Bahari company, which would distribute the electricity to businesses in the area, while the power from the Kuala Tanjung plant would be supplied to PLN to help cope with power shortages in North Sumatra province.

To ensure the sustainability of their partnership in the future, SEG and TAME also signed agreements covering other sectors, including the establishment of service centers for electrical and mechanical equipment.

"We are very optimistic about the Indonesian power market," SEG vice general manager Zhou Jingyu said after the signing of the MoU.

SEG is currently also participating in a tender held by a consortium made up of local companies PT Bukit Asam and PT Indika Nasional for the construction of power plant consisting of four 600 MW generators in Bangko Tengah, Jambi.

In the tender, SEG is competing head-to-head with other Chinese companies, including Harbin Power Engineering and Dongfang Electric.

S. Sulawesi's Bakaru hydropower plant's capacity to be raised to 191 MW

Makassar, South Sulawesi (ANTARA News) - The capacity of South Sulawesi`s Bakaru hydropower plant (PLTA) is soon to be increased to 191 MW with the installation of a new 65-MW turbine to be financed with a Japanese loan, a State Electricity Company (PT PLN) official said.

"The Japanese government has offered a loan of US$50 million (Rp450 billion) to the Indonesian government to fund the project," Herman Darnel Ibrahim, PT PLN director of transmission and distribution told the press here on Friday.

He said the Indonesian and Japanese governments were now holding negotiations on the project.

"We are still assessing several matters relating to the use of the Japanese loan," he added.

He said the power plant`s capacity needed to be expanded as it was the main source of electricity supply in the region meeting the needs of some 1.3 million people in South and West Sulawesi.

The power plant now had two turbines with a combined capacity of 126 MW.

Part of the Japanese loan would be used to finance the removal of sedimentation from the bottom of the hydropower plant`s water reservoir so that it could always contain enough water to keep the three turbines running.

The reservoir was now only holding some 700,000 cubic meters of water while it had been designed to contain six million cubic meters.

High Rise Tax to be Eliminated

Friday, 15 December, 2006 | 14:06 WIB

TEMPO Interactive, Jakarta: The President's decision on High Rise Construction instructs related ministers to eliminate all kinds of tax to make a success out of construction of 1,000 towers. This program is important to overcome the problems of public housing and traffic jams in major cities, which cause inefficiency and loss of productivity.

Vice President Jusuf Kalla said the tax cut is given to the first 1,000 towers that are built. “If necessary, value-added tax (VAT) is also eliminated,” said Kalla in Jakarta yesterday (14/12). The Presidential Decision was issued on Monday (11/12).

The President also asked regional leaders to ease the licensing of high rise construction. This policy is urgent so that employees who work in the city, live in the city, not in suburbs. “It'll be more efficient if they live in the city,” said Kalla.

However, what happens is the other way around. Many wealthy people live in the city despite having vehicles. “Wealthy people should live outside the city,” said Kalla. In addition, many slums are scattered throughout the city, which actually can be overcome by building high rises.

“High rise investment is only Rp50 trillion,” he said. The World Bank is already ready to fund it. The Bank Tabungan Negara (BTN) has also promised to provide funds, up to half the funds needed to build high rises.

BTN's Director of Credit, Siswanto, previously said BTN is ready to allocate Rp1 trillion funds for high rise financing in 2007. The funds are prepared for construction credit and the remaining for high rise ownership.

According to Indonesian Real Estate (REI) General Chairperson, Lukman Purnomosidhi, developers have long been ready to build high rises. Kalla has also informed REI that high rise construction is not the only thing with incentives.

High rise consumers will also be given incentives of VAT cut and low interest rate. “The incentives for customers will be regulated in a Ministerial Decision,” he said. However, Lukman also hopes the government will provide supporting infrastructure, such as a busway feeder system, electricity and drinking water.

SUTARTO

Palapa Ring Project Not Viable

Friday, 15 December, 2006 | 15:23 WIB

TEMPO Interactive, Jakarta: The Palapa Ring project, a fiber optic network construction connecting all areas in Indonesia that is worth US$1.517 billion, is not viable. Spokesman of the Directorate General of Post and Telecommunication at the Information and Communication Department, Gatot S. Dewa Broto, said investors regard Indonesia as not having a clear format in developing the telecommunication industry.

“They (investors) question the numerous telecommunication regulations that are not consistent,” he said at the Aston Hotel. Jakarta, yesterday (14/12). Investors also consider the Palapa Ring project is not reasonable to sell because telecommunication usage in Indonesia is low and the investment cost is large.

The government plans to hold a Palapa Ring project auction in October 2007. Palapa Ring is one of the infrastructure projects offered in the Indonesia Infrastructure Summit in Jakarta from November 1 to 3. In the project's blueprint, the Palapa Ring contains seven fiber optic rings which cover Sumatra, Java, Kalimantan, Nusa Tenggara, Sulawesi, Maluku and Papua plus one network that connects all the rings.

The length of the network totals 30,000 kilometer, connecting 33 provinces and 440 regents/cities. According to the Director General of Post and Telecommunication, Basuki Yusuf Iskandar, some time ago, the auction preparation is only up to feasibility assessment in June 2007. The construction starts early 2008 for three years until 2011.

According to Gatot, the government is analyzing making a road map so that regulation on telecommunication has a clear aim and the telecommunication industry can grow. This project will be offered again in the Indonesian Telecommunication Infrastructure summit in mid-2007

Eko Nopiansyah

Indonesia one of Daihatsu's important car production bases

Jakarta (ANTARA News) - Daihatsu Motor Corporation (DMC) has made Indonesia one of its important car production bases capable of contributing 10 percent to its worldwide output, a spokesperson said.

DMC plans to produce 1.3 million cars around the globe this year and will make 10 percent of the total figure in Indonesia, DMC president director Teruyuki Minoura said when commissioning an Astra Daihatsu Motor (ADM) engine factory in Karawang, West Java, Thursday.

DMC, he said, had a commitment not only to assemble cars in Indonesia but also carry out transfer of technology and knowledge as well as help develop human resources in Indonesia.

Minoura pledged to continue increasing the local content of ADM cars made in Indonesia from 70 percent to 95 percent gradually and cooperate with local suppliers in the making of ADM cars.

He said Indonesia was the largest market for Daihatsu automotive products outside Japan.

Daihatsu which has been making cars in Indonesia since 1979 sold about 48,000 cars in Indonesia last year.

Meanwhile, ADM vice president director Sudirman MR said an increase in engine production to 150,000 in Karawang factory was made to raise Daihatsu`s production target from 114,000 cars to 150,000 cars a year.

"The factory is designed to enable the production of up to 200,000 engines and assemble 400,000 cars," he said.

ADM Indonesia had exported 1,300-cc engines to Italy since 2004, he said adding that Daihatsu had also teamed up with Malaysia to develop a Malaysian car called Pero 2.

ADM, therefore, was exporting 2,000 cylinder heads to Malaysia per month.

ADM was cooperating with Toyota Astra Motor in the production of Xenia and Avanza minivans as well as Terios and Rush SUVs.

Three Companies Participate in Bakrie's Biodiesel Tender

Jakarta (IOGNews) -Three foreign companies participates in biodiesel technology tender for the factory going to be built by PT Bakrie Sumatera Plantations Tbk (BSP) and PT Rekayasa Indonesia with total investment of USD25 million and with a total capacity of 100,000 tons per year.

The three companies participate in tender are Lurgi (Italy), Balestra (Italy), and Man-Ferristal (Germany). The result on the tender will be announced by end of this year and the physical building of the factory, which is located in Batam, is started on March 2007.

The biodiesel factory will start its operation on second quarter of 2008. This is possible because PT Rekin (Rekayasa Industri) is handling the EPC (Engineering, Procurement and Construction) process.

Vice President National Project BSP, Hepi Sapirman, stated that BSP and Rakin split the shares 70 percent : 30 percent, while the total investment required for the factory is USD25 million, USD5 million of the fund will be used as working capital.

Indonesia awards 18 new oil and gas contracts via direct offer

Jakarta (ANTARA News) - The Energy and Mineral Resources Ministry said it has awarded 18 new oil and gas contracts to eight consortia and 10 individual contractors, via direct offer.

The contractors include the CNOOC-PT Gregori Gas Perkasa consortium, Star Energy Holdings Ltd., the ConocoPhilips-Statoil ASA consortium, Pearl Oil, the Japex-Premier Oil-Kufpec consortium; and the Transworld Exploration Ltd, Indoreach Exploration Ltd, Mitra Energy Ltd consortium.

The ministry said in a statement that the contractors plan to invest a combined 235.79 mln usd on exploration activity. They must pay a total of 31.45 mln usd in signature bonuses, or advance payments, for the rights to develop their allocated exploration areas within 30 days of signing their contracts.

The government offered 21 blocks through the direct offer system. It drew 23 bidding documents but only 18 met the requirements.

Under direct offer arrangements, the interested parties propose the blocks they want to bid for, and are automatically awarded the site if no other investor expresses interest.

Japanese Group to invest US$1 bln in North Maluku, Indonesia

Ternate, N Maluku (ANTARA News/Asia Pulse) - Japanese investors belonging to a group known as the North Moluccas Project have earmarked US$1 billion for several investment projects in North Maluku, Indonesia, including a desalination plant to service the country's mineral water industry, a local official said.

Representatives of the group have met North Maluku administration officials to discuss the plan, Asril Ahmad, head of the North Maluku administration's information and communication bureau, said here Tuesday.

Ahmad said the Japanese businessmen also wanted to invest in seaport and airport expansion, agricultural irrigation networks and tourist facilities.

Antam To Make a Construction Tender for Power Generator Using Alternative Energy

Monday, December 11, 2006 11:12 WIT

Jakarta (IOGNews) : PT Aneka Tambang Tbk (Antam) will make tender on construction to build power generator using alternative energy on year 2008. This steps in line with the company’s plan to shift the usage of oil fuel to other alternative energies.

Antam’s Operational Director, Alwin Syah Loebis stated that his company is currently studying on which alternative energy that might be used to replace oil fuel in order to reduce cost and overcome the oil fuel deficit problem in the future. Presently, oil fuel cost reaches 30%-45% of total company’s production cost. In 2007, the company is expected to reach a decision as to what type of alternative energy that will be used. In 2008, the construction will commence and in 2009, the generator will fully operate.

The alternative energy under consideration are to build water-based power generator, gas-based power generator or steam-based power generator.

President has approved Jakarta monorail project: governor

Jakarta (ANTARA News) - President Susilo Bambang Yudhoyono has signed a decree approving the construction of a monorail system in Jakarta, meaning that work on the stalled project can be resumed and completed as scheduled by the Jakarta city administration, Jakarta Governor Sutiyoso said.

"I have information that the president has signed a decree approving the monorail project. It means the finance minister will no longer hesitate to issue a comfort letter as requested by the project`s financier, the Dubai Islamic Bank (DIB)," the governor said after a meeting with the House of Representatives (DPR)`s Commission IV at City Hall here Monday.

Sutiyoso said he hoped the Jakarta Legislative Council (DPRD) would not delay issuing a needed letter on implementation of the long-awaited project.

But he said he did not know the precise content of the presidential decree.

Meanwhile, Jakarta city administration secretary Ritola Tasmaya said the DIB had requested the comfort letter so that it could issue a loan for the project.

Other requirements besides the comfort letter for DIB were a finance minister`s decree, a finance minister`s regulation, a Jakarta Legislative Council letter and an agreement between the Jakarta city administration and PT Jakarta Monorail consortium which was carrying out the project.

Ritola said the documents would be sent to DIB not later than December.

Before the DIB loan was received, work on the project would be financed with a bridging fund from Malaysia.

DIB had previously asked the Jakarta city administration to provide a project risk guarantee of US$500 million.

The Jakarta monorail targets to carry 160,000 people a day.

The Jakarta Monorail Consortium, however, had asked the central government and the Jakarta city administration a warranty of $22.5 million per year over a five-year period to cover losses in case the monorail cannot reach the target.

The Jakarta monorail will consist of a 13.5-km Blue Line linking Kampung Melayu in East Jakarta and Roxy in West Jakarta, and a circular 14.3-km Green Line passing through the Rasuna Said. Gatot Subroto avenues, the Sudirman Central Business District, the Senayan and Pejompongan areas.

The Jakarta Monorail company said the Green Line would be completed for trial by late 2007 and the Blue Line by mid-2008.

Indonesia's APG to build 5 property projects in Jakarta

Jakarta (ANTARA News/Asia Pulse) - Growing property giant Agung Podomoro Group (APG) has said it will build five property projects with a total investment of Rp2 trillion (US$222 million) in 2007.

APG marketing director Indra Widjaya Antono said the five projects are all residential houses including apartments located in Jakarta.

APG concentrates on building residential houses, based on its prediction that demand for luxury homes will grow by 10-15 per cent in 2007.

West Java to build international airport from 2008

Business in Asia Today - Dec 11, 2006

Bandung, West Java (ANTARA News/Asia Pulse) - West Java province is to begin building an international airport in Kertajati subdistrict in Majalengka district in 2008 and operate it starting in 2010, Governor Danny Setiawan said.

The airport would be built at a cost of Rp25.4 trillion (US$2.8 billion) based on an aerocity concept, Setiawan said after attending an expose of the international airport's construction plan here Friday.

The airport would be set up on a 1,800-ha area of land in three stages and be linked to tourist, property and industrial complexes.

Indonesian power plants start using biofuel to cut costs

Xinhua, December 11, 2006

Indonesia's state-owned power firm Perusahaan Listrik Negara (PLN) will start using biofuel to fire 114 small- and medium-scale power plants around the country beginning next year.

PLN chief commissioner Alhilal Hamdi said the plan had been approved following the success of pilot projects for the use of biofuel in an 11-MW plant in Lampung and a 1.5-MW power plant in Nusa Penida, Bali, earlier this year.

"Next year, we will start using biofuel in West Nusa Tenggara, East Nusa Tenggara and South Kalimantan," Alhilal, who is also the head of the government's biofuel development committee, was quoted Saturday by major newspaper The Jakarta Post as saying.

He said that power generated by this plant, which used a blend made up of 80 percent pure plant oil (PPO) and 20 percent diesel, was 300 rupiah (3 U.S. cents) cheaper per kilowatt per hour than power produced from oil-based fuels.

"We hope we can save more using this alternative energy source, and therefore help reduce the government's subvention," Alhilal said.

According to a review conducted by the State Ministry for Research and Technology's technological assessment and application agency (BPPT), the government could cut the subvention it pays to PLN to 2.56 trillion rupiah (279.8 million dollars) per year with the greater use of PPO, made mainly from palm oil.

2 Chinese contractors win bids for power plant projects in Indonesia

Xinhua, December 11, 2006

The China National Technical Import and Export Corp (CNTIC) and the Harbin Power have won bids for two steam-powered electric generator projects respectively, a local media reported Saturday.

The CNTIC won the bid for the project in Suralaya of Banten province with capacity of 625 mega watts, valued at 473.7 million U.S. dollars, the Bisnis Indonesia daily reported, quoting the committee of the auction.

THe Harbin Power became the winner of the bid for the Paiton project in East Java province with capacity of 660 mega watts valued at 522.8 million U.S. dollars, the committee said.

The final bid was participated by four bidders comprising three companies from China and one from Japan, according to the Indonesian Ministry of Mines and Energy.

The two projects, aimed to reduce Indonesia's dependency on fuel, are part of the government's plan to establish 10,000 mega watts power plants, which will be complete within three years, said Indonesian Minister of Mines and Energy Purnomo Yusgiantoro.

Indonesia will reduce the use of fuel oil to generate power from 30 percent at this time to 5 percent in 2009.

The oil production in Indonesia has been declining due to aging of some oil wells and the slow of finding new well.

Indonesia's power plants have a total capacity of 25,000 mega watts, but the demand grows by 6 to 7 percent or 2,000 to 3,000 mega watts annually, according to the minister.

Banyan Tree to manage new resort in Bali

By Ng Shing Yi, Channel NewsAsia, 08 December 2006

SINGAPORE: Singapore's Banyan Tree Hotels and Resorts will manage a new resort in Bali, Indonesia.

The Banyan Tree Ungasan Resort has just been launched by Indonesian developer, PT Surya Semesta Internusa Group.

Perched upon a 70-metre cliff, the high-end 10-hectare US$30 million resort comprises 73 villas which are being offered for sale to prospective investors.

250 socialite guests, plucked from The Link Group's VIP client base, were invited as potential buyers at the launch of the resort.

The villas are priced from US$650,000 for a one-bedroom suite to US$2.7 million for a presidential villa.

Under the terms of the sale, investors will lease their units back to the resort operator.

Johannes Suriadjaja, President Director of PT Surya Semesta Internusa Group, said: "We are also providing a guaranteed yield of 8% for the first 2 years. Afterwards, we're going to give a sharing of the room revenues, of about 40%, to investors. That will work out to a yield of 7%-8%, eventually. Our target market will be 70% from overseas investors and 30% from domestic investors."

For visitors, units at the Banyan Tree Ungasan Resort will be priced at about US$600 a night.

That puts the resort in the same upscale market as competitors such as the Bvlgari Resort, the Four Seasons Resort and the Ritz Carlton Hotel and Resort.

But the resort is hoping to draw in visitors with its Asian design and ambience.

Paul Tavuzzi, Director of PeddleThorp Architects, said: "What we've tried to do is to develop a concept that is international in presentation, lifestyle, service and quality, but at the same time, to embrace all the qualities of the Balinese culture. When you walk through the Ungasan Bali resort, it will be somewhat similar to a Balinese village."

Despite the fear of terrorist attacks in Bali, the Surya Internusa believes the risks to its property investment remain limited.

Mr Johannes Suriadjaja said: "For the first half of this year, we have seen tourist market slow down. But it is picking up and almost back to normal, as if prior to the bombing itself, on the second half of this year. Right now the number of tourists, foreign tourists basically, that come through the airport in Bali has picked up to 4,000 tourists a day. That will come up to one and a half million annualized per year."

Full construction of the resort starts next year and completion is targeted at the first quarter of 2008.

Pertamina Soon to Sign 21 New Oil and Gas Contract

Jakarta (IOGNews) - The government is ready to sign contract agreements by December of this year to develop 21 new oil and gas blocks. Those oil and gas blocks are direct offer tender submitted by contractors who found those blocks. The companies, which found those blocks have the first right to develop those blocks.

Out of 41 blocks, 20 blocks were offered through regular tenders and the remaining 21 blocks were offered through direct offer. The documents should be completed by December 26, 2006 if the companies are going to participate through regular tenders. Many foreign investors are interested to join the tenders. In 2008, the government set target of oil production to reach 1.3 million barrel per day.

The government offers a larger profit sharing portion (60-65%) to investor who can explore the oil and gas field, which located in difficult area or has higher risk. Out of the 41 blocks, Indonesia received at least USD51 million as bonus of signing contract agreement on 41 new oil and gas working fields. This revenue excludes profit sharing revenue and contractor investment.

Ngurah Rai Airport's runway to be overlaid

Jakarta (ANTARA News) - The runway of Bali`s Ngurah Rai International Airport will be overlaid with a 5-7 centimeter-thick cement layer to maintain services, an official of state airport management company PT Angkasa Pura I said on Thursday.

"The project will be started in the middle of this month with funds totalling Rp30 billion," PT Angkasa Pura I director Bambang Darwoto said.

He said the project was routine in nature and implemented once every four years as part of efforts to maintain the quality of the airport`s services.

The funds, he added, would come from the company`s budget.

Ngurah Rai Airport`s runway is 3,000 meters long and 45 meters wide.

Angkasa Pura I company is currently managing 13 commercial airports across Indonesia, mainly in the eastern parts of the country.

Among the airports are Selaparang in Lombok, West Nusa Tenggara, Juanda in Surabaya, East Java, Pattimura in Ambon, Sepinggan in Balikpapan, East Kalimantan and Ahmad Yani in Semarang, Central Java.

The others are Hasanuddin in Makassar, South Sulawesi, Adisutjipto in Yogyakarta, Sam Ratulangi in Manado, North Sulawesi, Syamsuddin Noor in Banjarmasin, East Kalimantan, Adisumarmo in Surakarta, Central Java, El Tari im Kupang, East Nusa Tenggara and Frans Kaisiepo in Biak.

In 2005, the company booked a net profit of Rp395.2 billion or 30 percent more than in the previous year when the figure was only Rp286.5 billion. The company has set the target to gain a profit of some Rp434 billion before tax in 2006.

Astra Agro eyes Indonesia, Malaysia plantation buys

Reuters - 2006-12-08 10:03

NUSA DUA, Indonesia, Dec 7, 2006 (Reuters) - Indonesia's largest listed plantation firm, PT Astra Agro Lestari Tbk, is looking to buy small plantation firms at home and in Malaysia, a top company official said on Thursday.

"We are looking for aquisitions, we are at looking at small plantation firms in Malaysia and Indonesia. That will be our strategy for growth," Gunawan Lubis, area director for palm plantations at the firm, told Reuters on the sidelines on a palm oil conference in the resort island of Bali.

"Our top priority will also be to develop new plantations in Kalimantan and Sulawesi," he added.

Astra Agro has said it plans to increase capital spending in 2007 to 700 billion rupiah ($76.92 million) to expand its oil palm plantations by 15-17,000 hectares and to build new mills with construction expected to begin early next year.

The company will spend between 500 billion and 600 billion rupiah this year.

The plantation unit of the country's leading auto retailer, PT Astra International Tbk , currently manages 201,412 hectares of oil palm plantation.

European countries ready to help rebuild C. Kalimantan peatland canal system

ANTARA News - 2006-12-08 10:22:53

Palangka Raya, Central Kalimantan, December 7, 2006 (ANTARA News) - Some European countries including Germany and the Netherlands are ready to help build a canal system in a network of neglected canals in a 1.45 million-hectare peatland area in Central Kalimantan, Governor A Teras Narang said here Thursday.

The two European ountries would help rebuild, close and realign the old canals based on a master plan being drawn up by the Netherlands, he said.

The Netherlands would finalize the master plan in March next year, he added.

The combined length of the neglected canal network was 4,000 km, four times the length of Java island, but many of the canals had to be closed because they passed through a deep depression in the peat land area.

"The new canal system will hopefully reduce forest and bush fires during the dry season. The system will hopefully also serve as a water catchment area during the wet season," Narang said.

The master plan, he said, would also help the local people find alternative livelihoods.

The governor said the Dutch master plan to build a new canal system would not overlap the Indonesian government`s plan to develop the neglected peat land area.

Citigroup offering finance education to the poor

The Jakarta Post, Jakarta

As part of a global strategy to empower the disadvantaged, Citigroup has picked Indonesia as the third country where it will introduce its financial education for the poor project, which started in Peru and the Philippine two years ago.

The project, which basically provides training for trainers, is costing some US$5.3 million worldwide.

As part of the project, a one-week workshop, which started Tuesday, is being held in Jakarta, with around 30 participants taking part from Cambodia, Mongolia, Sri Langka, Vietnam and Indonesia.

Shariq Mukhtar, Citibank country business manager, said that teaching good money management practices would help people understand money management and financial law, thereby hopefully helping them to improve their well-being.

"This is a model I feel very proud of because it educates the consumers.

"When you have an educated consumer, it will result in a stable banking industry as people will pay back their money at the right time and the money will then go to the next eligible family," explained Mukhtar.

The project kicked off two years ago with a study to identify the needs of clients around the globe and identify key learning objectives. After the creation of modules and pilot programs, the team came up with a generic module design, which in turn can be localized and adapted to the needs of specific countries.

The module covers such areas as budgeting, savings, debt management, banking services and financial negotiations.

For the preparation of the module, Citibank spent about $3.9 million out of a total of $5.3 million. The remainder of the money is now being used for the dissemination of the curriculum around the globe through in-country training.

"There is a long way to go, and many things to do regarding this program, such as how to localize and adopt the module's materials to enable it to be implemented it in Indonesia," said Danielle Hopkins, Citibank's financial education manager responsible for microfinance opportunities.

Six educational institutions and microfinance institutions with good track-records in microfinance sector in Indonesia have been selected as dissemination partners by the bank. They will now be trained as service providers for the program.

Ditta Amahorseya, senior vice president and country corporate affairs head of Citigroup Indonesia, said Citigroup would be targeting the members of 75 different institutions from around the country to receive training in 2007.

New resort worth US$6.58 bln to be built in Indonesia

Jakarta (ANTARA News/Asia Pulse) - Foreign investors are set to build resort projects with supporting facilities in Lagoi, North Bintan island in the province of Riau Islands worth Rp59.28 trillion (US$6.58 billion).

Work will start next year, with the resorts scheduled to be completed in three years, Gunawan Adiwibowo, the director of PT Bintan Resort Corp. said here Wednesday.

"They are all big names, mainly hotel chains from the United States and Europe," Adiwibowo said, refusing to identify the investors.

PT Bintan Resort Corp. is the operator of a 23,000-hectare plot of land in the Lagoi area

Govt to hold tender for nuclear plant in 2008

Ika Krismantari, The Jakarta Post - 2006-12-07 15:32

Jakarta, December 7, 2006 (JP) - Pushing ahead with its plans to harness nuclear power, the government will hold a tender in 2008 to select suitable suppliers of nuclear technology and contractors to construct the Rp 15 trillion (US$1.66 billion) plant in Muria, Central Java, a senior official says.

"A special body responsible for conducting the tender will be set up next year, with a presidential decree to serve as the legal basis expected to be issued later this month," Ferhat Aziz, legal and public relations head at the National Nuclear Energy Agency (Batan), said Wednesday.

To be called the Nuclear Power Implementation Agency, Ferhat said the new agency would be responsible for preparing the tender and selecting reliable suppliers of safe technology suppliers for the project, which will be able to generate 1,000 megawatts (MW) of electricity.

It will be made up of officials from Batan, state power firm PT PLN, the Research and Technology Ministry and the Nuclear Energy Regulatory Agency (Bapeten).

"We're eyeing companies from the U.S., South Korea, France and Japan, as their technologies meet the standards set by the International Atomic Energy Agency (IAEA)," he said, although he was quick to add that the tender, by its nature, would be open to all potential suppliers.

The winner, however, would have to team up with a local company for the development of the plant.

"We estimate that the shareout will be 25 percent for the local-based firm and 75 percent for the foreign company," Ferhat said.

The government is hoping to commence construction of the power plant in 2010, with it expected to come onstream in 2017.

In terms of cost, nuclear power is marginally cheaper than oil-based electricity. A nuclear power plant can produce one kilowatt hour (kWh) of electricity at an estimated cost of 4.3 U.S. cents, while oil-based electricity costs 4.5 U.S. cents per kWh.

Hudi Hastowo, the secretary at the Research and Technology Ministry, said that Indonesia needed to develop a nuclear program to reduce its dependence on oil.

"We have high hopes for this kind of energy as it saves money. Oil, when used to generate electricity, contributes to around 60 percent of the electricity's retail price, compared to 20 percent in the case of nuclear power," he said,

He stressed that PLN would benefit from the development of a nuclear power plant given that it would need an additional 1,500 MW to 2,000 MW annually after 2016.

Commenting on resistance by those concerned about safety and the environment, Hudi said the government was fully aware of their concerns, which was why it fully intended to adhere to international standards.

"IAEA Director General Mohammed Elbaradai is scheduled to visit Indonesia on Dec. 7-9 to help us promote the safe use of nuclear power for peaceful purposes. We hope we can improve public awareness about the issues involved," he said.

Indonesia has received a total of $1.34 million in technical assistance from the IAEA to develop eight programs in 2007 and 2008 related to the harnessing of safe nuclear power.