Indonesia, Japan sign energy contracts worth USD 2 bilion

Tokyo (IOGNews/Asia Pulse) - Indonesia's Energy and Mineral Resources Minister Purnomo Yusgiantoro announced on Tuesday, that an Indonesia-Japan Energy Round Table meeting has produced three new contracts on oil, gas and energy collectively worth USD2
billion.

"There are three contracts worth USD 2 billion, one of which is for LNG trading between state oil company PT Pertamina BP Berau and Tohoku Electric Power...that is valued at USD 1 billion," the minister said.

The other two agreements, worth USD 500 million each, were for the construction of thermal power plants in Tanjung Jati and Cirebon, West Java.(antara)

Affin hired to help raise US$308m for BumiGas plants

Business Times - 2006-11-29 11:49

Kuala Lumpur, November 29 2006 (Business Times) - AFFIN Investment Bank Bhd has been hired to help PT BumiGas Energi raise US$308 million (RM1.12 billion) to help finance the construction of two power plants in Indonesia.

The bank has been appointed the adviser and lead arranger for the exercise, which is due to be finalised by the end of the year, it said in a statement recently.

BumiGas has formed a special purpose vehicle (SPV) to develop, finance, build, operate and maintain the geothermal power plants.

Unlike gas or coal-fired plants, geothermal power plants use the natural heat of the earth, like dry steam, to generate electricity.

This is Affin's first cross border deal in Indonesia.

Shareholders of the SPV include Malaysian-based Transmit Nanyang Engineering Construction Sdn Bhd (TNEC) with 60 per cent shareholding, Indonesia-based PT. Bumigas Energi with 30 per cent and an Australian company Prime International with 10 per cent.

"I am confident the offer will be fully subscribed by private investors especially since TNEC (who is the major shareholder of Bumigas) is expected to be the main investor of the bonds," Affin Investment Bank president and chief executive officer Datuk Sheikh Awab Sheikh Abod said.

The two geothermal power plants are under a 15-year concession awarded to BumiGas, at the end of which the independent power producers (IPPs) will be transferred to PT. Geodipa Energi.

PT GeoDipa Energi is a joint venture company of PT Pertamina (Persero) and PLN (Persero) (Perusahaan Listrik Negara), two of the biggest state-owned companies in Indonesia.

It has been mandated by the Ministry of Finance of Indonesia and the Government of Indonesia to produce electricity from geothermal energy and sell the electricity produced to PT Perusahaan Listrik Negara.

The construction will take approximately four years with an estimated cost of US$400 million (RM1.45 billion).

"We are pleased to appoint Affin Investment Bank to secure financing for this venture. We are confident that with their growing regional prowess they should have no problem to attract investors," BumiGas chairman H.M. Wijaja said in a statement.

Indonesia Bakrie Sumatera plans $66 mln capex in 07

Reuters / Yahoo Finance - 2006-11-29 11

JAKARTA, Nov 28, 2006 (Reuters) - Indonesian plantation company PT Bakrie Sumatera Plantations Tbk plans to triple capital spending next year in its effort to boost revenue and expand its palm oil business, its chief said on Tuesday.

Bakrie Sumatera, controlled by the family of Indonesia's chief social welfare minister Aburizal Bakrie, said it plans 600 billion rupiah ($65.7 million) in capital spending next year compared with 200 billion budgeted for this year.

"The money will also be used to finance the construction of a biodiesel plant and to build new palm oil mills," the company's President Director Ambono Janurianto told reporters. He did not elaborate.

Janurianto said the company expects revenue growth to be 30 percent and operating profit to grow 35 percent this year. The company expects next year's revenue growth at 35 percent and a 20 percent increase in operating profit.

In 2005 the company posted revenues of 883.31 billion rupiah and operating profit of 223.16 billion.

According to Reuters Estimates, the company's revenue will increase to 1.09 trillion rupiah and 1.26 trillion in 2007.

Bakrie Sumatera plans to jointly build the country's first biodiesel plant with construction firm PT Rekayasa Industri to meet a surge in demand for renewable energy.

The $25 million plant would have the capacity to produce between 60,000 and 100,000 tonnes of biodiesel a year as a substitute for diesel fuel.

Indonesia, a member of the OPEC oil producers' cartel but forced to import a quarter of its fuel, is scrambling for alternative energy sources as its oil and gas reserves dwindle and soaring world oil prices increase the burden of its fuel subsidies.

RI, Japan agree on yen loan amounting to US$16.151 million

Jakarta (ANTARA News) - Indonesia and Japan reached agreement on a 1.869 billion yen or around US$16.141 million to Indonesia for funding a survey and program planning of the Jakarta Mass Rapid Transport(MRT) system.

Information on the agreement from the Indonesian embassy in Japan, said the exchange of documents of the agreement took place between Indonesian Foreign Minister Hassan Wirajuda and his Japanese counterpart Taro Aso in Tokyo on Tuesday.

A Mass Rapid Transport system is badly needed in metropolitan Jakarta to overcome traffic jams which had been posing a serious problem especially during morning and afternoon rush hours as the result of inadequate road infrastructure and excessive dependence on road transporation.

The information also said that the Jakarta MRT project was designed to improve the capacity of passenger movements in Metropolitan Jakarta by the construction of a 14.5 km railway track, partly underground, between Lebak Bulus and Dukuh Atas, at a cost estimated at 110 billion yen.

The yen loan was actually a special term for economic partnership with an interest rate of 0.40 percent per year, and payable in 40 years including a grace period of 10 years, and the procurement of goods and services.

The Japanese government hoped that the loan would give a greater contribution to the improvement of the functions of Jakarta city and the restoration of a conducive investment climate in the capital city, in addition to stabilizing international environment in Japan and strenghthening the relations between the two countries through building a stable Indonesia.

The agreement brought Indonesia`s debts in the yen to 4,42 trillion.

Earlier, Transportation Minister Hatta Rajasa said in the Indonesia Infrastructure Summit that the the central government through the state budget provided around 15 percent, or US$120 million, in counterpart fund for the MRT project.

The construction of the MRT project will be shared by Japan and Indonesia each with 30 percent, and the remaining 40 percent will be decided through an international tender.

New Fast Ferry Jetty and Mooring Dolphbins for North Jetty - Ulee Lheue Port

Design and Construction of New Fast Ferry Jetty and Mooring Dolphbins for North Jetty - Ulee Lheue Port, Banda Aceh, NAD, Indonesia

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UNDP Indonesia
Deadline: 01-Dec-06

Design and Construction of New Fast Ferry Jetty and Mooring Dolphbins for North Jetty - Ulee Lheue Port, Banda Aceh, NAD, Indonesia
Request for Proposal
Reference Number: 2006/897

View Attachment

New megaplex hopes to blitz movie theater industry

Yuli Tri Suwarni, The Jakarta Post, Bandung

The newly opened nine-screen Blitz Megaplex in Bandung, West Java, offers a new option for movie fans in an industry that has been dominated by 21 Cineplex.

Blitz opened its first megaplex this month in Bandung's Paris van Java shopping mall. It plans to open megaplexes in more cities, with its ultimate goal to become a major player in the country's movie theater industry.

"It's a daring idea, opening a movie theater in Bandung, where there have not been many moviegoers," said Yana Mulyana, a spokesman for Kharisma Jabar Film, the sole movie distributor in West Java.

The chairman of the All Indonesia Movie Theater Companies Association, Edison Nainggolan, warmly welcomed the new megaplex.

"It means they believe Bandung is a safe city, because a movie theater business will die in a city with poor security," Edison told The Jakarta Post in Bandung.

The arrival of Blitz could also herald a revival of a movie theater industry that has been flagging in recent years.

Edison said that in the 1990s, Indonesia had around 3,300 movie screens belonging to more than 500 companies.

But fewer and fewer people have been going to the movies, partly the result of the explosion in affordable VCD and DVD machines and cheap, pirated discs.

"The number of moviegoers has sharply decreased, leaving only around 400 screens left in the country," Edison said, adding that several cities in West Java, such as Banjar, Ciamis and Majalengka, no longer had a movie theater.

Though there is no official data, Yana said there were now only 40 movie theaters across West Java with 144 screens.

He said the decline in the number of moviegoers started in 1994. That year, the province had 213 theaters with 417 screens, which could accommodate 137,000 viewers. By 1997 there were only 160 theaters with 359 screens and 102,000 seats.

"With the large trade in pirated VCDs and DVDs at such low prices, people can easily watch movies at home without having to pay for expensive tickets or spend money on transportation," Yana said.

Before the arrival of Blitz, there were only 10 theaters in Bandung with a total of 41 screens. Most of these surviving theaters, Edison said, are located in shopping malls.

Since opening Blitz has drawn in good crowds, including many students and young executives. Part of its early success is the choice offered by Blitz, which features nine screens. Previously, the largest theater in the city was the seven-screen Ciwalk21.

Fikri Fadillah, a 27-year-old businessman, was elated with the new theater.

"The service is good and the prices are competitive, not too expensive," he said.

Ticket prices at the theater are Rp 25,000 for Hollywood offerings and the latest Indonesian films, and Rp 15,000 for independent movies.

Bandung Institute of Technology student Aditya Himawan, 21, said it was good to have a movie theater that would screen independent films.

"Maybe because the theater is still new, the sound quality is great and the place is neat. In other places, out of five screens, only two are good quality," he said.

Blitz's arrival was also greeted by producer-director Nias Dinata, who said the theater would help Indonesian films stay in theaters longer.

"Filmmakers will have more space to screen our films in the country, because right now there are not enough movie theaters ...," she said.

Blitz marketing director Wendy Soeweno said the market for movie theaters was wide open, considering the lack of entertainment facilities in the country.

"People need more entertainment facilities to give them a break from their routines," Wendy said.

She said Blitz would open its second theater, an 11-screen megaplex with 3,200 seats, in Jakarta before the end of the year.

RI absorbs only 53 pct of its loan commitment: minister

Jakarta (ANTARA News) - State Minister for National Develoment Planning/Head of the National Development Planning Board (Bappenas) Paskah Suzetta said Indonesia had absorbed only about 52 percent of the current US$15 billion foreign loan commitment.

"The foreign loan commitment amounts to about 15 billion US dollars of which only about 52 percent had been disbursed," the minister said here on Thursday.

He said that most of the foreign loans could not yet be disbursed because of obstacles in preparing land for infrastructure projects.

"All are program and project loans. The largest portion of the loans are for the development of instructure projects," he explained.

He said that his office was evaluating Indonesia`s program and project loans in order to make a final decision on which of the programs or projects had to be continued or stopped.

"I cannot reveal how much of the loans will be used and how much will be returned. We will look at the various aspects, including the project`s readiness and the terms and conditions," Paskah said.

Touching on the platform of Indonesia`s debts at the Asian Development Bank (ADB) which reached one billion US dollars a year but for this year still accounted for 400 million US dollars only, Paskah said that the withdrawal of the loans were based on an evaluation of the Indonesian government.

"They set aside a platform at US$1 billion but we are stuck to the evaluation on our readiness to utilize it in the form of program or project loans," the minister added.

On the occasion, the minister also explained the agenda he would take to Japan when he joins President Yudhoyono`s visit to Tokyo later this month.

He said that there was a possibility that a loan agreement for the construction of a mass rapid transport (MRT) project would be signed.

"Initially there was a delay in the MRT project but following negotiations with Japan, we finally reached agreement on the terms and conditions concerning the use of local contents in the project," the minister said.

He said that Indonesia and Japan had agreed that local contents reached 30 percent, local contents from Japan 30 percent and the remaining 40 percent to be put on an open international tender.

Indonesia, China sign energy, mining cooperation agreement

Friday, November 24, 2006 06:11 WIT

Beijing (IOGNews) - China and Indonesia agreed to expand cooperation in energy and mineral resources, as Indonesian President Susilo Bambang Yudhoyono said energy security would be a "key factor" in future bilateral ties, state media said on Sunday.

Yudhoyono and Chinese Vice Premier Huang Ju attended a signing ceremony for a memorandum of understanding on energy and mining cooperation on Saturday in Shanghai on Saturday, DPA reported citing the official Xinhua news agency.

Energy security is a "key factor in allowing China and Indonesia to achieve peace, stability and development", the agency quoted the Indonesian president as saying.

"Win-win economic cooperation is the foundation of the strategic partnership between China and Indonesia," Huang was quoted as saying.

The two leaders attended the second Sino-Indonesian energy forum in Shanghai on Saturday, following the first forum in Bali in 2002.

Earlier this year, the two sides agreed that Indonesia's Tangguh gas field will provide 2.6 million tons of liquefied natural gas annually to south-eastern China's Fujian province from 2009 to 2034.

The report gave no details of any new initiatives in Saturday's agreement.

Yudhoyono is also scheduled to attend a forum marking the 15th anniversary of formal dialogue between China and the Association of South-East Asian Nations on Monday and Tuesday in the southern Chinese city of Nanning. (Antara)

Development of a Water Quality Management System

Pilot and Demonstration Activities
Development of a Water Quality Management System for the West Tarum Canal of the Citarum River Basin

Asia Development Bank

The growing population in West Java's urban areas has brought pollution to the Citarum River Basin, leading to the dwindling of water quality. This PDA will pilot the establishment of a water quality monitoring and management system for the West Tarum Canal.

The growing population in West Java's urban areas has brought pollution to the Citarum River Basin, leading to the dwindling of water quality. This PDA will pilot the establishment of a water quality monitoring and management system for the West Tarum Canal.

Read more ..

Govt, Russia to sign 12 agreements

Abdul Khalik, The Jakarta Post, Jakarta

Indonesia and Russia will sign 12 different agreements, including ones on cooperation in the fields of military, energy and gas, and space exploration, during President Susilo Bambang Yudhoyono's visit to Moscow later this month.

Russian Ambassador to Indonesia Mikhail M. Bely said that besides witnessing the signing of the agreements, President Yudhoyono and his Russian counterpart Vladimir Putin would discuss a wide range of issues related to political and economic cooperation as well as global matters, including North Korea's and Iran's nuclear programs.

"All the agreements will serve as a legal framework for wider and more concrete cooperation in the future," the ambassador said during a press conference here Thursday.

Yudhoyono, who will make official visits to Japan and then Russia from Nov. 26 to Dec. 2., will also address a business forum at the Kremlin, with more than 100 businesspeople from Indonesia expected to attend.

The Foreign Ministry's director general for Europe and America, Eddhi Hariyadi, confirmed the two presidents would discuss a number of issues, including areas of possible cooperation in the political and economic fields, before witnessing the signing of around 12 agreements.

Indonesia and Russia are expected to sign an agreement that would enable Jakarta to purchase US$1 billion in military equipment for its Army, Navy and Air Force between 2006 and 2010

"It is known that Indonesia is keen to obtain more military equipment and technology and Russia has a lot to offer. Indonesia has announced its intention to purchase military equipment worth $1 billion from us. I can confirm that we have received a formal official request from the Indonesian government. It will be negotiated during the visit," Bely said.

Defense Minister Juwono Sudarsono announced last week that Indonesia had agreed to purchase $1 billion in military equipment from Russia in an effort to diversify its arms sources.

He said the purchase would prevent the country from being totally dependent on American military products, which is important in the event the U.S. imposes another arms embargo on Jakarta.

Four Russian Sukhoi combat aircraft were delivered to Indonesia in 2003, and Bely said the two countries were now closing a deal on the purchase of additional Sukhoi to strengthen Indonesia's Air Force.

"There are also plans to buy Russian carriers and submarines. Indonesia has a long purchasing list to be obtained from Russia. And we are ready to discuss the terms of credit export during the visit," the ambassador said.

In energy cooperation, Bely said Russia was willing to participate in oil and gas projects here, including possible participation in a gas pipeline project between Kalimantan and Java. The Bakrie Group recently won the tender to develop the pipeline.

He said Bakrie Group was set to meet with Russian energy and gas companies to discuss the pipeline project.

Russia and Indonesia will also sign an agreement on the peaceful use of nuclear energy, which could open the door to cooperation in the construction of a nuclear power plant here.

Indonesia has long wanted to build nuclear power plants to diversify its energy sources. Its initial plans were shelved in 1997 in the face of mounting public opposition and the discovery and exploitation of the large Natuna gas field.

But the plans were floated again last year, with the country's oil and gas reserves continuing to run thin and increasing threats of power shortages.

The government has chosen Ujung Lemah Abang on the Muria peninsula in Central Java as a possible site for the first plant, which could have an output of 1,000 megawatts.

In aviation and space exploration, Indonesia and Russia are negotiating to use Biak island as a launching pad for communication satellites.

Indonesia's Antam plans second alumina plant

Reuters - 2006-11-23 14:15:43

JAKARTA, Nov 22, 2006 (Reuters) - Indonesian miner PT Aneka Tambang Tbk is planning to build its second alumina plant with an annual capacity of 600,000 tonnes, the president director said on Wednesday.

"The smelter grade alumina plant will be located in Bintan island (off Sumatra) with commercial operations expected to start in 2009," Dedi Aditya Sumanagara told reporters.

Antam corporate secretary Ashur Wasif said a Chinese investor was interested in helping finance the project estimated to cost up to $250 million. He declined to name the investor.

"The construction of the plant is expected to begin in the end of 2007," Wasif told Reuters.

Earlier this year, the company said it plans to build a chemical-grade alumina plant in Tayan, West Kalimantan with an annual capacity of 300,000 tonnes.

Antam (ATM.AX: Quote, Profile, Research) has signed an agreement with three foreign firms to jointly develop the $220 million alumina plant in Tayan that will process high quality bauxite reserves into chemical grade alumina for the domestic and international market.

Chemical grades are used in the manufacture of ceramics, spark plugs, paint and plastics, while smelter grades are those from which aluminium is produced.

Indonesia's Astra Agro plans 2007 capex of $77 mln

Reuters - 2006-11-23 14:18:55

JAKARTA, Nov 22 (Reuters) - Indonesia's largest listed plantation firm, PT Astra Agro Lestari Tbk (AALI.JK: Quote, Profile, Research), plans to increase capital spending in 2007 to 700 billion rupiah ($76.65 million) to expand its oil palm plantations and build new mills, its finance director said on Wednesday.

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

"It will be used to expand by 15-17,000 hectares oil palm plantations in East Kalimantan and to build two new palm oil mills in Southeast Kalimantan and Riau, with construction expected to begin early next year," finance director Julie Syahtari told reporters.

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

ADB to Assist Indonesia with $428 Million for Infrastructure Development

MANILA, PHILIPPINES - ADB will help Indonesia carry out critical reforms needed to develop the country’s infrastructure and drive economic growth.

The Infrastructure Reform Sector Development Program (IRSDP) will offer more than $428 million in loans and grants to the Government of Indonesia to help improve the country’s investment climate and tap the power of the private sector in meeting Indonesia’s huge infrastructure needs. These will be supplemented by a $7.6 million grant from the Government of the Netherlands for a project development facility.

“Indonesia has the potential for dynamic economic growth in the years ahead,” says Rajat M. Nag, Director General of ADB’s Southeast Asia Department. “The development of infrastructure is vital to the growth Indonesia needs to create jobs and bring people out of poverty. Ensuring adequate quantity and quality of infrastructure services is critical for restoring Indonesia’s competitiveness.”

Before the Asian economic crisis in the mid-1990s, Indonesia spent about 6% of its gross domestic product on infrastructure. Today, that figure is down to around 2%, and the country’s economy has suffered as a result. About 50 million people have no access to treated water, 90 million are without electricity, and close to 200 million have no direct access to a phone or sewage network.

The poor are the hardest hit by the lack of infrastructure. Roads in poor condition keep people in poverty by denying their access to economic opportunities. Nearly one out of five rural villages in Indonesia is inaccessible for part of the year.

The Indonesian Government estimates that the country needs about $65 billion in infrastructure investments over the next five years, with $25 billion to be met by the Government budget, $14 billion by domestic banks, insurance and pension funds; $10 billion by development partners, and $16 billion by private sector investors.

The ADB program will assist Indonesia in improving the policies, laws and institutions that are needed to attract large scale private sector infrastructure investments. It will also help streamline the infrastructure responsibilities of the national and local governments.

“The public sector alone cannot meet the investment needs. The private sector has to be brought in. But private investors look for a level playing field between the public and private sectors, clarity of regulatory framework, and transparency in the bidding process,” says Ramesh Subramaniam, ADB Principal Economist based at its office in Jakarta. “The program supports the Government in implementing reforms in these important areas.”

The program is planned to be undertaken as a cluster of three subprograms, the first of which is backed by a loan of $400 million from ADB's ordinary capital resources. This has a 15-year term, including a grace period of three years, with interest determined in accordance with ADB's LIBOR-based lending facility.

Support under each of the two subsequent subprograms up to 2010 will be determined based on needs, as well as progress made.

One of the most critical constraints to infrastructure development is the lack of adequate project preparation. Besides the $400 million loan, the program also includes a loan of $26.5 million equivalent from ADB’s concessional Asian Development Fund to help the Government establish a project development facility to prepare infrastructure projects well, make them bankable, and bid them out in a transparent manner.

The concessional loan has 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 subsequently.

A further $2 million grant from ADB will support the Government in implementing a risk management framework under IRSDP.

BAPPENAS, the National Development Planning Agency, will be the executing agency for the program.

ADB's Board of Directors recently endorsed a four-year country strategy for Indonesia that proposed about $3.36 billion in loans and another $47.6 million in grants. ADB’s assistance will be focused on infrastructure development, improving the financial sector, supporting government decentralization, accelerating the achievement of the Millennium Development Goals (MDGs), and environmental protection.

About ADB

Jaya Ancol to pump Rp 350 billion into investment projects

Andi Haswidi, The Jakarta Post - 2006-11-22 17:18

Jakarta, November 22, 2006 (The Jakarta Post) - Arguably the biggest theme-park operator by assets in Southeast Asia, PT Pembangunan Jaya Ancol plans to pump Rp 350 billion (about US$39,000) into new property and theme-park projects during the course of 2007.

"There is still a market niche that needs developing," the company's president director, Budi Karya Sumadi, told an investor forum Tuesday at the Jakarta Stock Exchange (JSX).

Budi said that around Rp 200 billion would be invested in the company's property business within the Ancol Jakarta Bay City, while the remaining Rp 150 billion would go on procuring new attractions for the Dunia Fantasi amusement park, buying a Beluga white whale for its water park, revitalizing the Atlantis swimming pool and improving Ancol beach.

Ancol Jakarta Bay City is a 552-hectare leisure complex that includes amusement parks, a golf course, a beach pool, clubs, hotels, townhouses and marina bay.

Budi said that around Rp 200 million of the proposed investment would be sourced from the company's retained earnings while a number of financing options were being considered for the remainder.

"We have two options; it's either through issuing bonds or launching a rights issue that could increase the number of company shares by between 10 and 15 percent," he explained.

Budi said that the second quarter of next year would be the right time to decide on the financing options as part of the development project would already have commenced by that stage.

According to company figures, Pembangunan Jaya Ancol books an average revenue increase of between 10 and 15 percent each year. Total revenues are expected to increase to Rp 670 billion this year, up from Rp 617.9 billion in 2005 and Rp 542.8 billion in 2004.

The company is 72 percent owned by the Jakarta provincial administration, 18 percent by PT Pembangunan Jaya and 10 percent by retail investors after a stake in the firm was sold to the public in 2004.

The firm, which was listed on the Jakarta Stock Exchange (JSX) in late 2004, registered net income of about Rp 124.5 billion last year, up from Rp 110.6 billion in 2004 and Rp 105 billion in 2003.

"The growth in our visitor numbers has been consistently steady despite lower purchasing power at the present time. We even managed to achieve growth during the 1998 crisis," Budi said.

He stressed that continuous innovation and new investment was the key to the firm's steady growth during its three decades in existence, adding that the company intended to develop the Ancol area into a major culinary-vacation destination for the upper-income-bracket market.

US$1.1b PGN pipeline expected to come onstream next month

The Jakarta Post, Jakarta

President Susilo Bambang Yudhoyono has been drafted in to inaugurate a US$1.1 billion pipeline linking South Sumatra and West Java some time before the end of this year.

The pipeline, which will be operated by state-owned gas distributor PT Perusahaan Gas Negara (PGN), will supply between 300 million and 400 million standard cubic feet of gas per day (MMSCFD).

PGN's newly appointed president director, Sutikno, said Friday in Jakarta that the construction work was now 85 percent complete.

"We hope that operations can commence on Dec. 21," he said following an extraordinary shareholders, which endorsed his appointment as the company's top executive, replacing WMP Simanjuntak.

The project, comprising two pipeline tracks spanning a total of 1,106 kilometers from Grissik in South Sumatra to Rawa Maju in West Java, started last year.

"We hope we will be able to get additional gas supplies of about 300 million MMSCFD next year, thanks to this project," said PGN finance director Djoko Pramono.

The company said last year that when the pipeline came onstream, the company would see its 2007 revenues triple from the Rp 4.4 trillion (US$488 million) recorded in 2004.

The company booked a 22 percent revenue increase to Rp 5.4 trillion in 2005, as compared to 2004.

The gas distributor's net profit in the first nine months of this year rose 251 percent to Rp 1.5 trillion from Rp 427 billion a year earlier, while revenues from gas sales and transmission as of Sept. 30 jumped to Rp 4.9 trillion from Rp 3.9 trillion in the same period last year.

The meeting also endorsed the appointment of new development director Adil Abas, and also appointed Sutikno to double up as the company's business director.

Djoko was also named director for general affairs, while Simandjuntak was appointed to the company's board of commissioners.

PGN is the dominant player in the Indonesian natural gas market.

Next year, the company is planning to build another pipeline connecting Medan in North Sumatra and Duri in Riau. The 465-kilometer pipeline, which will have a total capacity of 250 MMSCFD, will cost about $490 million.

Gadang eyes more utilities projects

Friday November 17,2006, thestaronline

KUALA LUMPUR: Gadang Holdings Bhd aims to increase its investment in the utilities sector, said managing director and chief executive officer Datuk Kok Onn.

He said the company's foray into treated water supply concessions in Indonesia had enabled it to develop steady recurrent revenue.

“Only 20% of the Indonesian population has treated water supply, so we see huge potential to grow this business,” he told reporters after the company AGM yesterday.

Gadang has three treated water supply concessions in Indonesia at present. It acquired PT Taman Tirta Sidoarjo, which produces 200 litres of treated water per second, last year.

The other plants are PT Bintang Hytien Jaya (BHJ) in Kota Tangerang, which has a production capacity of 1,050 litres per second and PT Sarana Catur Tirtakelola (SCTK), which would supply 400 litres per second when the plant is completed early next year.

Gadang said the capital investment for BHJ and SCTK over the next five years was expected to be more than RM100mil while the annual revenue from the division was expected to climb from the present RM4mil to over RM50mil by 2010.

It is also in negotiations to acquire new concessions, which have a combined output capacity of 1,500 litres per second.

Kok said the company’s engineering division had an order book worth RM430mil, which was expected to last about a year.

“We foresee some new jobs coming in,” he said, adding that Gadang was optimistic of securing infrastructure and building projects under the Ninth Malaysia Plan and the Private Finance Initiative scheme.

The engineering division has tendered for local projects worth more than RM1bil and expects to secure some deals within the next few months.

Meanwhile, Gadang's property division has about 100 acres land bank worth over RM100mil. Around 80% of it is located in the Klang Valley and the balance in Johor.

The group is also now in talks with some parties in China for water and real estate projects.

Energizing The Economy

Energizing The Economy
Indonesia is likely to confront looming power shortages due to insufficient capacity expansion in the face of 7 to 9 percent yearly increase in demand. Over 70 million people in Indonesia, mostly the poor, still do not have access to electricity.
Read the Brief [pdf 1.5mb]

For more information on World Bank in Indonesia, please visit: http://www.worldbank.org/id

The Road to Economic Growth

The Road to Economic Growth
The road sector accounts for the major share of domestic freight and inter-urban passenger land travel in Indonesia, playing a crucial role in linking communities and markets throughout the country. Read the Brief [pdf 1.1mb]

For more information on World Bank in Indonesia, please visit: http://www.worldbank.org/id

Flow of Funds, Flow of Water

Flow of Funds, Flow of Water
Today, fewer than 20% of households in Indonesia have access to piped water, which is inexpensive and still of reasonable quality compared to alternative sources. The situation has deteriorated in recent years, as the sector can no longer rely on central government grants and loans, formerly major sources of funding. Read the Brief [pdf 674kb

For more information on World Bank in Indonesia, please visit: http://www.worldbank.org/id

Jakarta may take over Pertamina's geothermal areas

JAKARTA, Nov 14 (Reuters) - The Indonesian government plans to take over 15 geothermal working areas from Pertamina in 2010 if the state oil and gas firm does not develop the projects and tender them to other companies, a mines and energy ministry official said on Tuesday.

A lack of investment and uncertainty over government regulation has caused difficulties for Pertamina in developing the projects, located on the islands of Sumatra and Java, the company has said.

Pertamina has 142 megawatts (MW) of geothermal power plants in Kamojang, West Java, and plans to expand to 900 MW by 2010.

"The government will tender the geothermal areas to other companies if Pertamina does not develop the projects by 2010," ministry official Sutisna Prawira told Reuters.

Pertamina upstream director Sukusen Soemarinda said the firm was seeking partners to develop geothermal projects.

"Chevron has shown interest to co-operate with Pertamina in developing geothermal projects. We plan to discuss (this) with them," Soemarinda said.

U.S. energy major Chevron Corp. currently has about 520 MW of geothermal power plants, located in West Java.

Geothermal power plants use hot water or steam from beneath the earth's surface to generate electricity.

Indonesia, dotted with hundreds of active and extinct volcanoes, has estimated potential to produce 27,000 MW of electricity from geothermal sources.

Indonesia, Asia Pacific's only OPEC member, is also the world's largest exporter of liquefied natural gas (LNG) and has huge coal deposits.

Danareksa to join $500 million cement project in Central Java

Blontank Poer - The Jakarta Post - 2006-11-09 11:20:14

Jakarta, November 9, 2006 (JP) - State-owned trust company Danareksa has agreed to partly finance the construction of a Rp 4.5 trillion (about US$500 million) cement plant to be built by Semen Gerobogan in Central Java.

Semen Gerobogan general manager Tonny Santoso said Tuesday that Danareksa had signed a letter of intent (Lol) 'to become one of the financiers for the cement plant, which when completed will have a production capacity of 2.3 million tons a year.

However, Tonny refused to disclose any details on the size of Danareksa's investment in the project.

"For sure, three months after the signing of the Lol. we will start the preparations for the construction of the cement plant," he said.

The plant will occupy about 2.500 hectares of land, including a lime mining concession area. For the first stage of the project, only 60 hectares of land will be used for the factory facilities and another 1,000 hectares for lime mining.

The deal signed by Danareksa and Semen Gerobogan was one of 38 investment agreements signed during the Central Java Infrastructure Business Forum, held Nov. 5-7 at the Quality Hotel in Surakarta.

The agreements cover 27 infrastructure projects, including waste treatment, water, railways and the agribusiness. The agreements have a total value of about Rp 6.56 trillion.

Even though the investment commitments failed to reach the initial target of Rp 14 trillion, Central Java Governor Mardiyanto hailed the forum as a success.

"We hope all the projects can be realized so they will be able to support the local economy and create more jobs for locals," he said.

Investors from China, Taiwan, the Netherlands, France and Malaysia attended the forum.

Indonesia, China sign deal on six energy projects worth $ 5b

(The Jakarta Post Via Thomson Dialog NewsEdge) from The Jakarta Post, October 30, 2006

The Indonesian government has signed an investment contract with the Chinese government on six energy projects worth up to US$5 billion.

As reported by Antara from Shanghai, the contract was signed by Indonesia Energy and Mineral Resources Minister Purnomo Yusgiantoro and China's Planning Committee and State Reform Minister Ma Kai, and was watched by President Susilo Bambang Yudhoyono and Senior Vice Prime Minister Huang Zu in Shanghai last Saturday during the Indonesia-China Energy Forum II.

Purnomo said the six projects included the establishment of a chemical factory for producing liquid coal in South Sulawesi worth $687 million, involving PT Sumber Gas Sakti Prima from Indonesia and Chenda Engineering Corporation of China and Sinchuan Chemical Industry Holding.

The two nations will also cooperate in enhancing coal energy plus other chemical research programs by establishing a plant in Kunming province, China, estimated to be worth between $300 million and $1 billion and involving PT Antarniaga Nusantara Indonesia, Yunan Chemical Industry Group and China National Chemical Engineering Group Corporation.

One project is the establishment of a steel factory and iron ore facility in Sukabumi, West Java, worth $300 million, involving PT Ciracap Sumber Prima and Yunan Geology and Mineral Resources.

A power plant, worth $170 million, capable of delivering two times 100 megawatts will also built in Jeneponto, South Sulawesi, involving PT Bosowa Energi and Chenda Energy Corporation of China.

Another power plant, estimated to worth $2.1 billion, will also be established in South Sumatera. It will be capable of delivering four times 600 megawatts of coal-powered electricity, and will involve PT Tambang Batu Bara Bukit Asam, the State Power Company, PT Indika Inti Energy and China Huadian Corporation.

Lastly, the contract includes plans to establish joint work worth $1.5 billion between the Energy and Resource Ministry and the China National Offshore Oil Corporation to explore crude oil beneath the Aru Island.

"Cooperation in the energy sector is something that is relatively new in the long history between Indonesia and China, but this is the area that will increase the geo-political and geo-economic relations between the two countries," President Yudhoyono said.

The president also said that he hoped that within a decade Indonesia could be the largest bio-energy provider in the world and that foreign investment from countries such as China could make this come true.

The president is in China to bolster economic cooperation between the two countries and is expected to return home on Tuesday.

Truba wins contract to build power plant

JAKARTA, November 8, 2006 (Bloomberg)

PT .Truba Alam Manunggal Engineering, an Indonesian engineering and construction company, said it has secured a contract to build a power plant for PT Central Pertiwi Bahari.

"The $60 million project is expected to commence early next year," Corporate Secretary Jenty Tjandradjaja said.

Truba's share price jumped Rp 15, or 7.1 percent, to Rp 225 on the Jakarta Stock Exchange on Tuesday. That's the biggest gain since a 64 percent increase on Oct. 16, the day the shares started trading on the exchange.

Arabica Coffee Industry

(BKPM - Indonesia)

General Information

Bengkulu Province on the Island of Sumatra has been designated by the Government of Indonesia as a priority area for the development of Arabica coffee plantations. This is due to the fact that the highland soil in Bengkulu is very suitable for this type of coffee. We would therefore like to invite any interested investors to consider locating their Arabica coffee projects in this area.

The area proposed for development is in the Kabupaten Rejang Lebong, at an altitude of around 1,100 m above sea level. There are several main market access routes, namely via Lampung Province or South Sumatra for sea cargo and West Sumatra for airfreight.

The total area planned for conversion to coffee plantations is 4,500 ha, consisting of 1/3 nucleus area and 2/3 plasma area which can be developed in a partnership scheme with the existing smallholders in the area. The plantation project has prioritized the conversion of both not yet developed hillside and mountain terrain, as well as terrain which is presently is planted with Robusta crops.

The proposed processing industry project would produce roasted, soluble and instant coffee with a product capacity of 3000 tons per annum. Confectionery products are also an additional output with a proposed capacity of 200 tons per annum. The land allocated for value-added processing is estimated to occupy 5 ha of the total project area.

In general, the area proposed for this project has good infrastructure. Most roads are passable, although some sections need intensive maintenance. Electricity is available, and water supplies are abundant from local springs. Telecommunications services are available from both the government and private wireless network.

Market Prospect

Both export and domestic markets have strong prospects for Arabic coffee sales. When value added production is expanded to include soluble and instant coffee, the export market potential becomes even more attractive. The production output is estimated to reach 0.7 -1 tons/ha, somewhat higher than present average smallholder production.

Indonesia's national strategy is to increase the competitiveness of its coffee products in world markets. This strategy includes the adoption of new technologies, the enlargement of production areas, the provision of a secure long-term business climate, and intent to produce environmentally friendly products.

The coffee business is estimated to increase by 2.72% per annum through to year 2005. Domestic consumption is expected to increase by 1.65% per annum,while exports will increase by around 3.4% per annum.

Financial Information

The assumptions developed in the financial analysis are:

a. Land equity equal to US$ 150,000.
b. Nucleus planting (1,500 ha) including the seeds, input and labor during 2 (two) years: US$ 400/ha per annum.
c. Plasma planting (3,000 ha) including the seeds in labor during 2 (two) years: US$ 2,400,000.
d. Construction of main processing plant, storage facilities including purchasing and maintenance of equipment: US$ 650,000.
e. No purchasing of raw material required except 10% local price of average plasma production of 2,000 tons/annum.
f. Export product value: US$ 3,000/ton
g. Interest rate no more than 10% per annum. h. Annual depreciation for building and machinery: 8%.

Indonesia's Yudhoyono to Dedicate Projects in C Java

Asia Pulse / ANTARA - 2006-11-06

SEMARANG, C JAVA, Nov 6, 2006 (Asia Pulse) - President Susilo Bambang Yudhoyono is slated to dedicate a number of projects in Central Java on November 14, a spokesman of the Central Java provincial administration said here on Thursday.

"The projects include the Agung Mosque and the coal-fired power plant PLTU Cilacap," Saman Kadarisman said.

The head of state will dedicate the power plant on November 14 morning and the Agung Mosque later in the night.

The 2 X 300 megawatts power plant would be the first of its kind in the southern part of Java island and built by Chengda Corporation of China.

WB: indonesia needs US$40 billion for investment in power sector

Jakarta (ANTARA News) - State electricity company PT PLN needs an investment of US$40 billion until 2015 for the building of power plants, power transmission and distribution lines, a World Bank official has said.

Power consumption has been predicted to increase, and thus needs huge investment, Country Director of World Bank in Indonesia, Andrew Steer, said here Wednesday.

The investment fund of US$40 billion would be allocated to the building of power plants (US$27 billion), transmission lines (US$5 billion) and distribution lines (US$8 billion), he said, adding that his side was ready to invest in this sector.

With the funds allocated efficiently, PT PLN may reach a growth rate of 8.5 percent till 2015, he said.

Steer also said the investment in the electricity sector would also improve public access to electricity.

Till 2014, the number of people who enjoy electricity would reach 245 million, an increase compared to the 218 million in 2004, and the number would continue to increase to 276 million by 2020, he said.

By 2020, there would be 20 million new power networks when the rate of the people`s accessibility to electricity would reach 90 percent, he said.

The World Bank through one of its networks in Indonesia -- the International Finance Corporation (IFC) --, had disbursed at least US$ 10 billion for investment in the infrastructure projects.

The funds were allocated for transportation (US$4 billion), energy (US$3 billion), urban, water and sanitation projects (US$3 billion).

President: regional development to determine country's fut

ANTARA News - 2006-11-03 09:29:56

Jakarta, November 2, 2006 (ANTARA News) - President Susilo Bambang Yudhoyono has said the future of Indonesia is to be determined by regional development.

Therefore, he said, the ability of regional administrations and local communities to synergize and collaborate with investors will change the future of the nation.

"A country will never make significant progress without regional development. Investors should meet and cooperate with potentials in the regions. Now is the right time to build a new Indonesia," Yudhoyono said before more than 400 businessmen from various countries, provincial governors, mayors and district heads at the opening of the Indonesia Regional Investment Forum (IRIF) here on Thursday.

On the occasion, the head of state asked the governors, district heads and mayors from across the country and the businessmen to regard local communities as integral parts of national development.

"This is our post-crisis deal to become a strong country in the economic field and in democracy," the president said at the forum organized by the Regioal Representatives Council (DPD).

The opening of the two-day forum was also attended by DPD Chairman Ginanjar Kartasasmita, Coordinating Minister for Political, Legal and Security Affairs Widodo AS, Coordinating Minister for Economic Affairs Boediono, Finance Minister Sri Mulyani, Trade Minister Mari Pangestu and Cabinet Secretary Sudi Silalahi.
Yudhoyono also expressed hope that the direct provincial and district head elections (Pilkada) would lead to the improvement of the business climate in the country.

"Decentralization is not intended to create more corruption but to make the local systems more transparent," the president said while also asking the governors and district heads to be more competitive in selling the potentials of their respective regions.

"Investors will not knock on doors from house to house like book salesmen. Remember that they have a lot of choices. Therefore, know that you are not only competing with other provinces and districts in Indonesia but also with provinces in other countries as well," Yudhoyono said.

Meanwhile, DPD sources said the IRIF was participated in by more than 400 investors from 20 countries around the world.

MTD Capital sees Indonesia toll road deal inked by month-end

Kuala Lumpur (ANTARA News) - MTD Capital Bhd is likely to sign a toll road project agreement in Indonesia by the end of this month, the Edge Daily reported, quoting the company's managing director Azmil Khalid.

Azmil said the company could not proceed with the signing until now as the Indonesian government has made moves to address several issues pertaining to risks sharing, land acquisition and default clauses.

The agreement involves the 33.9 km Cikarang-Tanjung Priok toll road project in Jakarta valued at some 250 mln usd.

MTD is undertaking the project with an Indonesian company, Nusa Cipta, on a 90:10 joint venture basis.

The Indonesian government, going all out to win investors, has announced a series of measures to allay investors' concerns, including those on land acquisition issues, the report said.

The Government of Indonesia announced the following toll road infrastructure projects.

Toll Roads Projects

CIRANJANG - PADALARANG Toll Road
BEKASI – CAWANG – KAMPUNG MELAYU Toll Road
WARU (ALOHA)-WONOKROMO-TANJUNG PERAK Toll Road)
WARU - TANJUNG PERAK STAGE I (WARU-JUANDA) Toll Road
GEMPOL - PANDAAN Toll Road
JAKARTA OUTER RING ROAD (JORR) SECTION W1
CIAWI - SUKABUMI Toll Road
CIKAMPEK - CIREBON Toll Road
SURABAYA - MOJOKERTO Toll Road
KANCI - PEJAGAN Toll Road
PEJAGAN - PEMALANG Toll Road
PEMALANG - BATANG Toll Road
SEMARANG - BATANG Toll Road
KERTOSONO - MOJOKERTO Toll Road
PASURUAN - PROBOLINGGO Toll Road
PANDAAN - MALANG Toll Road
GEMPOL – PASURUAN Toll Road
BOGOR RING ROAD
MEDAN – BINJAI Toll Road
DEPOK - ANTASARI Toll Road
CINERE - JAGORAWI Toll Road
CIKARANG – TANJUNG PRIOK Toll Road
CILEUNYI – SUMEDANG – DAWUAN Toll Road
MAKASSAR SECTION IV
CILEGON – BOJANEGARA Toll Road
PASIR KOJA - SOREANG Toll Road
SUKABUMI - CIRANJANG Toll Road
SEMARANG - DEMAK Toll Road
JOGJA - SOLO Toll Road
SOLO - MANTINGAN Toll Road
MANTINGAN - NGAWI Toll Road
NGAWI - KERTOSONO Toll Road
PALEMBANG - INDRALAYA Toll Road
WARU - TANJUNG PERAK STAGE II Toll Road
PROBOLINGGO - BANYUWANGI Toll Road
JAKARTA OUTER RING ROAD (JORR) 2
JAKARTA OUTER RING ROAD (JORR) SECTION W2 NORTH Water Supply Projects

(Source: Indonesia Infrastructure Summit)

Singapore's SPC and Pertamina tie up for joint oil projects

The Jakarta Post, Jakarta

Singapore Petroleum Company Ltd. (SPC) signed an agreement Friday to strengthen its collaboration with state oil and gas company PT Pertamina, promising up to US$1 billion for joint exploration and production projects over the next five years.

According to Pertamina president director Ari Soemarno, the memorandum of understanding (MoU) -- signed by Energy and Mineral Resources Minister Purnomo Yusgiantoro, State Minister for State Enterprises Sugiharto, and Singapore Trade and Industry Minister Lim Hng Kiang -- underlines the commitment of the two companies to working together on the exploration, development and bringing to production of oil and gas projects both in Indonesia and overseas.

The preliminary agreement would also provide a platform for information-sharing between SPC and Pertamina.

"This MoU underscores SPC's strategy of building regional alliances and cooperation with the aim of creating sustainable growth and development across the oil and gas value chain," SPC chief executive officer Koh Ban Heng said.

Purnomo, meanwhile, said he expected the fruits of the agreement to be mutually beneficial, with Pertamina having the experience and expertise, and SPC having the money to allow Pertamina to undertake more production projects.

Pertamina president Ari Soemarno said a number of the company's oil and gas fields were being considered for joint development under the MoU.

These consisted of at least eight fields in North Sumatra, including the Besi Tang gas field, Pertamina upstream director Sukusen Soemarinda explained.

However, more than half of Pertamina's 71 oil and gas fields are considered to be marginal or nearing the end of their productive lives.

In Indonesia, SPC -- an associate company of Keppel Oil and Gas Services Pte. Ltd., itself a wholly-owned subsidiary of conglomerate Keppel Corp. -- currently has concessions in the Kakap and West Natuna blocks in the South China Sea off the Riau Islands, as well as the Sampang block on Madura island in East Java.

Local leaders say they see the light on investment

The Jakarta Post, Jakarta

Local government chief executives attending the Indonesian Regional Investment Forum at the Shangri-La Hotel in Jakarta on Friday agreed on the need to create legal certainty and greater security in order to attract investors to their provinces.

"If you do business in Gorontalo, you will no longer be required to pay any local government charges. I have set up a special team to eliminate these kinds of charges," Gorontalo Governor Fadel Muhammad said.

"When I asked how much they contributed to the local budget, I discovered that it was only 2 percent. So I instructed my subordinates to just get rid of them as they were only imposing an unnecessary burden on investors," said the businessman turned politician.

In addition, he said that his administration had issued an ordinance to simplify licensing procedures for those willing to invest in the province, which is located in the northern part of Sulawesi island.

"People used to have to go through at least 17 desks when applying for a business license. Now, I've cut the number down to only one desk," he said.

As the result, economic growth in Gorontalo had increased to 7 percent this year from 4 percent last year. Currently, Gorontalo is among the wealthiest provinces in the country, with its principal industries being agriculture and fishing.

The autonomy given to local governments has given them greater powers to manage their own assets and economic affairs. But many observers say that provincial administrations have frequently taken advantage of these powers by imposing various kinds of charges, mainly to augment their local budgets, but not infrequently for purposes of self-enrichment. In many areas, local government autonomy has, in fact, severely hurt business instead of helping spur economic growth.

Meanwhile, in the case of Central Kalimantan province, which boasts abundant untapped natural resources, including oil and gas, gold, coal, plantation land, forests and fisheries, Governor Teras Narang said that the local government there had been doing all in its power to create an investment-friendly environment.

"We are trying to reduce the number of charges that have to be paid by businesspeople. We also plan to streamline the bureaucratic procedures that have to be gone through by investors when applying for licenses," he told The Jakarta Post.

He further said that his administration was working together with the police to ensure the security and safety of investors and their business operations in the province.

North Sulawesi Governor Sinyo Sarundayang said that his administration was providing non-fiscal incentives for investors putting their money into the province, which is known for the rich diversity of its agricultural produce, which include corn, cloves, coconuts, nutmeg and vanilla.

He said that his province provided a one-stop service at the provincial, municipality and regency levels for investors interested in doing business there. (09)

MRT Cooperation to be Signed End of November

Wednesday, 01 November, 2006 | 17:17 WIB

TEMPO Interactive, Jakarta: The Indonesian and Japanese governments will sign a cooperation agreement for the Jakarta mass rapid transportation (MRT) project by the end of November.

The Japanese government is offering a loan of US$800 million, or around Rp7.2 trillion, with 30 percent project components from Japan, 30 percent from Indonesia and 40 percent to be on an open tender.

According to Transportation Minister Hatta Rajasa, the cooperation will be signed by the finance ministers of both countries.

In the preliminary stage, the government offers funding for detail engineering design (DED) amounting to US$16.5 million to Japan in order to find out the exact value of Jakarta MRT project.

The agreement for the whole MRT funding will be carried out after the value is determined by the DED.

It is estimated that this stage will take a year after the cooperation agreement is signed.

Then the value of the project which will have been concluded will be agreed upon.

The next stage is construction tender.

It is expected that the construction can begin at the end of 2008.

Anton Aprianto

Indonesia selects 43 bidders for power plants

Reuters / Yahoo Finance - 2006-09-12 09:16:34

JAKARTA, Mon Sep 11, 2006 (Reuters) - Indonesia's PT Perusahaan Listrik Negara (PLN) has selected 43 local and overseas bidders as potential candidates to build coal-fired power plants, an official from the state-owned power monopoly said on Monday.

The planned plants are part of a 45 trillion rupiah ($4.93 billion) investment planned by Indonesia in its ageing power generators and its distribution system.

Bidders include companies from China, Japan and South Korean.

"There were more than 200 companies that applied to build the power plants, but only 43 qualified for further evaluation before we announce the winner soon," PLN spokesman Mulyo Aji told reporters.

Chinese bidders selected included Harbin Power (1133.HK: Quote, Profile, Research), Shanghai Electric (2727.HK: Quote, Profile, Research) and Dongfang Electric (1072.HK: Quote, Profile, Research).

Japanese firms chosen as bidders included Marubeni Corp (8002.T: Quote, NEWS, Research) and Mitsubishi Corp (8058.T: Quote, NEWS, Research), while South Korea's Hyundai Engineering and Construction Co. Ltd. (000720.KS: Quote, Profile, Research) was also part of a consortium named.

The power monopoly has the capacity to produce 21,700 megawatts (MW) of electricity, but ageing plants mean actual generation is lower.

About 30 percent of the plants run on oil products, such as diesel and fuel oil, while coal and natural gas account for the rest.

PLN's immediate plans include building 6,900-MW of coal-fired generating capacity to meet growing domestic demand.

In July, it invited investors to build three 600-700 MW coal-fired plants; in Banten, West Java; Paiton, East Java and in Tanjung Jati, Central Java.

The firm has also opened a tender to build several power plants outside Java island, each with a capacity of 300-400 MW.

PLN has said it will cut its power plants' dependency on oil products by around 18 percent this year as it looks to counter soaring crude costs.

Dubai Ports World eyeing US$722 mln Indonesian Port Project

Jakarta (ANTARA News/Asia Pulse) - Dubai Ports World of the United Arab Emirates hasindicated interest in financing the Rp6.5 trillion (US$722 million) Bojonegoro International Port project in Banten.

Syaifuddin, president of state-owned port operator PT Pelabuhan Indonesia, said Dubai Ports is among the investors showing interest in building the Bojonegoro port project.

Dubai Ports, the fifth largest port operator in the world, wants to expand operation in Asean, especially Indonesia, and sees good prospects in this region, Syaifuddin said.

Source: Business in Asia Today - Oct 31, 2006

Indonesia to phase out COEs monopoly on managing ports, airports, railways

Jakarta (ANTARA News) - Coordinating Minister for the Economy Budiono said the government plans to phase out state-owned companies' monopolies in managing ports, airports and railways, in a bid to bring in investors and improve efficiency in these sectors.

He said the phase-out plan is contained in new draft laws on ports, airports and railway. The government submitted the drafts to the lower house of Parliament recently and is hoping to have them passed into law in early 2007."

One important theme in these laws is the phasing out of the monopoly power of the state-owned companies (SOEs) in infrastructure services which we think has so far hindered efficiency and stifled investment in these sectors, " Budiono was quoted by XFN-Asia as telling a major international infrastructure conference here."If the laws are passed, opportunities will open up for private investments in ports, airports and railways," he added.

Currently, state-owned port company PT Pelindo monopolises ports management, withe railways controlled by PT Kereta Api Indonesia and airports by PT Angkasa Pura.

Emerging Markets Partnership to set up 1bln usd Indonesia infrastructure fund

JAKARTA (XFN-ASIA) - Emerging Markets Partnership (EMP), a Bahrain-based private equity investment company, said it plans to launch an Indonesian Infrastructure Fund worth 1 bln usd in the next 3-6 months, a company official said.

'It is a private equity fund. All of the funds will be invested in infrastructure projects,' EMP Indonesia operation's director for investments Dimitri Pantazaras told XFN-Asia on the sidelines of a major infrastructure conference here.

'We're looking to invest in many kinds of infrastructure projects, including toll-roads, ports, etc. But we haven't made any decision yet on which specific projects we're going to participate in,' he said.

He said EMP currently manages several global infrastructure funds worth 7 bln usd.

ADB to Assist in Developing Major Natural Gas Project in Indonesia

JAKARTA, INDONESIA - ADB today signed a $350 million loan to help develop the Tangguh Liquefied Natural Gas Project in Irian Jaya Barat province, Indonesia.

“ADB is committed to assisting in the development of Indonesia’s energy-producing capabilities in line with international standards and best practices for environmental and social standards,” said Robert Bestani, Director General of ADB’s Private Sector Department.

The Tangguh Liquefied Natural Gas Project will develop, build and operate gas production wells, platforms and a liquefied natural gas (LNG) facility to export gas initially to the People’s Republic of China, Republic of Korea and the West Coast of North America.

The multi-billion dollar project is being developed by the London-based energy firm BP, which has significant equity interest in the project. The remaining financing will come from various international investors and banks, including Japan Bank for International Cooperation (JBIC).
ADB expects the project to generate financial benefits to the Indonesian government to support the shared goal of reducing poverty via sustainable economic growth.

“The project encourages clean energy use around the region,” said Mr. Bestani. “At the same time, it will increase revenue flows to the national, provincial and local governments. These funds can accelerate social and economic development and reduce poverty.”

The project is important for Indonesia in its energy development and export efforts, and it will help Indonesia maintain its position globally as a key LNG export centre. It will also provide environmentally benign LNG to the region, and promote the use of cleaner fuel in countries such as the PRC and Korea.

The project includes a comprehensive social and environmental program based on extensive consultations with the affected communities and in line with ADB's social and environmental safeguard standards. Currently, BP is also working with other donor agencies and civil society in implementing its corporate social responsibility programs.

ADB, through its Indonesia Resident Mission in Jakarta, will also coordinate with BP and other donor agencies in scaling up capacity-building programs aimed at strengthening local governance, according to Edgar A. Cua, ADB’s Country Director in Indonesia.

“Sustainable development, cultural preservation, maintaining biodiversity and improved local governance are core principles at the heart of this project,” Mr. Cua said. “Moreover, this is an excellent example of the large scale infrastructure projects that are needed in Indonesia.”

ADB's participation will catalyze a significant amount of long-term debt to support Indonesia's energy sector. Since this is ADB's first private sector project in Indonesia's oil and gas sector, it has the potential to spur subsequent projects not only in Indonesia but also in the region.
“Tangguh LNG is the largest private sector project for Indonesia since the Asian financial crisis,” said Mr. Bestani. “Its successful completion demonstrates the private sector’s increasing confidence in the country.”

Support for the private sector is one of ADB’s key financing tools, and ADB’s Private Sector department is one of the fastest growing parts of the institution. A total of 29 financial markets and infrastructure projects providing $1.3 billion in assistance in the private sector are expected by end of August this year. These investments act as a catalyst to mobilize funding from other sources, leveraging ADB’s own funds by nearly 10 times.

About ADB

ADB to Assist in Developing Gas Pipeline Project in Indonesia

MANILA, PHILIPPINES - A $75 million loan will promote clean, indigenous energy in Indonesia by assisting in the construction of a 661 km natural gas pipeline from South Sumatra to West Java.

In addition to a direct loan without government guarantee to the Indonesian energy firm PT Perusahaan Gas Negara (PGN), ADB will support loans of up to $125 million to PGN provided by other international financial institutions and commercial banks, also without government guarantee.

The $652.5 million project involves the construction of a pipeline for the transportation of natural gas from major gas fields in South Sumatra to the major gas consuming areas of West Java. The pipeline is one of two being built by PGN to address a shortage of natural gas in West Java.

“This pipeline will promote clean energy,support economic growth in West Java and is also a strong endorsement of Indonesia’s sector reforms in the oil and gas sector,” said Stephen N. Edwards, Structured Finance Specialist with ADB’s Private Sector Department.

PGN, an Indonesian gas utility involved in the transmission, distribution, and sale of natural gas, is 61% owned by the Government of Indonesia. Holding over 90% of the gas distribution market, PGN has a dominant position in the country’s gas industry.

The project is ADB's second non-sovereign guaranteed operation in Indonesia's oil and gas sector. The first one, a $350 million loan to help develop the Tangguh Liquefied Natural Gas Project in Irian Jaya Barat province, was signed last 1 August.

About ADB

Foreign consortium to build US$1.5 bln resort area in Indonesia

Jakarta (ANTARA News/Asia Pulse)

A consortium of Singaporean and Malaysian companies is looking to build a new resort area in the regency of Bintan, at an estimated cost of US$1.5 billion.

Bintan Regent Ansar Ahmad, who did not disclose the names of the companies, said the consortium is expected to start work to build the project in 2007.

Ahmad said land is available for the project, adding 17,000 hectares of land have been cleared and so far only 3,000 hectares have been used by seven hotels and three golf courses.

Firms eye up 3 water-supply projects

Andi Haswidi, The Jakarta Post, Jakarta

Three private firms have expressed a keen interest in investing in three water-supply projects worth Rp 1 trillion (around US$109 million) that have been put on the table by the government at the Infrastructure Conference and Exhibition 2006.

"Many investors are interested in our water projects. At least three of them have directly approached me today and stated their intention of tendering for piped-water projects," Public Works Minister Joko Kirmanto said at the conference in Jakarta on Thursday.

Joko said the three companies were Tyco Water of the U.S., Ami Water from Singapore and a local firm from East Kalimantan.

During the three-day infrastructure forum, which will end Friday, the government is offering three water-supply projects that will serve as models for private-public partnership (PPP) projects in the water sector.

The three projects are the Bandung water-supply scheme, which is worth Rp 300 billion, the Tangerang water-supply scheme, worth Rp 300 billion, both of which are located in West Java, and the Dumai water-supply project in Riau province, which is worth Rp 400 billion.
Joko said that the three companies had already conducted studies at the project locations, which would give them an advantage in submitting unsolicited bids.

The tenders for the projects will be launched this month, while pre-feasibility studies will be conducted in November, prequalification in December and acceptance of the final bids by as early as January 2007.

The government is aiming to tackle the chronic underdevelopment of the country's water-supply sector. At present, about two-thirds of Indonesia's 220 million people do not have access to a clean-water supply.

In cities, piped-water coverage averages only about 39 percent, while in rural areas coverage averages less than eight percent.

Under a 2005 presidential regulation, PPP projects can be identified and initiated both by the government and the private sector, but the private-sector promoters must be selected through an open and transparent tender.

The regulation permits tariffs to be set so as to allow for full-cost recovery. Should full-cost recovery exceed the ability of consumers to pay, the government must make good the difference through the payment of a subvention to the operator.

One possible problem facing PPPs is resistance from regional governments in the form of bureaucratic, anti-private sector ordinances.

Aware of this possibility, Joko said that he had ordered the Water Supply System Development Supporting Agency to assist investors when dealing with local administrations.

"I am sure that every regional government wants to work for the benefit of its residents. Local administrations will be allowed to stipulate their own rules as long as these don't conflict with our national objectives," he said.

The minister also said there would be no restrictions on which parts of the country investors, whether local or foreign, would be allowed to develop projects.

"Any restrictions will be set by the market itself. I don't think that many big overseas companies will want to invest in rural areas that can only generate insignificant revenues. They will aim for the big cities and leave the rest to the local government water utilities," he said.

Indonesia hopes to hold tender for Lamongon port in December

ANTARA News - Jakarta, November 2, 2006 (ANTARA News) -

The government hopes to hold a tender for a contract to build the planned Lamongan container port, in East Java province, next month Transportation Minister Hatta Rajasa said.

"The tender of Lamongan Port could be conducted as early as next month," Rajasa was quoted by XFN-Asia as telling reporters at a major infrastructure conference here.

The cost of constructing the facility is estimated at around 600 mln usd. He said several major investors have expressed interest in the port, including Dubai Port and a major port operator from the Philippines, International Container Terminal Services Inc. Rajasa said Lamongan container port will become an alternative facility in East Java, since Tanjung Perak, is already "too congested," Rajasa said. (*)