Govt to announce tender awardees of nine oil and gas blocks

Jakarta (ANTARA News) - The government is to announce the winners of tenders for the exploration of nine oil and gas blocks in the country, an Energy and Mineral Resources Ministry official said. 

"The tender awardees are the result of regular tenders for the exploration of 21 oil and gas blocks offered in 2007 and 2008," Director General of Oil and Gas Evita Legowo said on the sidelines of Energy and Mineral Resources Minister Purnomo Yusgiantoro`s visit to PT Darmex Biofuels in Bekasi, east of here, on Friday. 

Evita said only nine bidders were declared winners in the tender for the exploration of 21 oil and gas fields. 

The other 12 oil and gas blocks remained unsold because they were mostly located in difficult areas which lacked infrastructure facilities, she said. 

On October 17 this year, the government also announced the winners of tenders for the exploration of 22 out of 25 oil and gas blocks put out to tenders in June 2008. 

Most of the tender awardees were foreign companies. 

Fourteen of the 22 blocks went to foreign companies and the rest to national companies.

European investors view on Indonesia investment condition

Jakarta (ANTARA News) - Managing Director of Indonesian Netherlands Association, Elmar Bouma delivered his remarks on the policies application of investment service in Indonesia from European investors` perspectives in a national seminar entitled "Regional Administration Strategies in Improving Investments Condition" as reported here Thursday. 

"Good governance, good policies with supportive facilities and infrastructures are the main expectations from foreign investors," he said in a seminar attended by 76 participants from regional administration, business practitioners and media. 

Promotion strategies are also one of his main point mentioning some efforts such as establishing an investment promotion institution, strengthening each potential area`s image and using information technology. 

When asked about the investment prospects, Bouma mentioned the visit of a number of potential business people from 25 companies lead by Netherlands` Minister of Economic Affairs, Maria van der Hoeven to Indonesia next month and another business group visit from Belgium as a good sign that Indonesia still drew investors` interests. 

He also said the investment opportunities and cooperation on agriculture products could happen considering Netherlands as the third largest agriculture products exporting country in the world. Meanwhile cacao and metal materials used for machineries such as iron could prospect from Belgium investors. 

Earlier the seminar featured Muhamad Lutfi, head of Investment Coordinating Board as keynote speaker, Faisal Basri, an economist and Fauzi Bowo, special capital district of Jakarta`s governor.

Bali offers scholarships for nursing, midwifery

Wasti Atmodjo, The Jakarta Post, Denpasar 

The Bali provincial administration has allocated Rp 4 billion (US$363,000) for 80 senior high school or vocational school graduates willing to pursue an education in nursing or midwifery. 

Ketut Kariyasa, head of the Provincial Legislative Council's (DPRD) Commission IV overseeing education and welfare, said the program was designed to prevent a possible shortage of able nurses and midwives in some of Bali's underdeveloped areas such as Karangasem and Buleleng regencies. 

According to Kariyasa, there has been a decline in the number of able nurses and midwives willing to work in underdeveloped areas, with most preferring to work in developed regions such as Denpasar municipality or Badung regency. 

"The data we've received show a worrying lack of proper nurses and midwives," Kariyasa said at the DPRD building Wednesday. 

"So you can say that this program is a type of long-term investment, considering the numerous positive outcomes we could achieve in the future." 

He said each student would receive a total of Rp 50 million to cover all their expenses. 

"We've settled on this amount after consulting with the deans of medical schools and nursing schools in Bali," Kariyasa said. 

"You can say that it is more than enough for tuition fees, accommodation and pocket money. 

"Since we've come up with a target of 80 students, we've allocated Rp 4 billion. Once students are awarded a scholarship, the money will be sent directly to their schools." 

He said the 80 successful recipients of the scholarships would be sent to an accredited nursing or midwifery college and receive a qualification similar to an associate degree program. 

Graduates from senior high school or with a comparable educational background who hail from underdeveloped areas or from poor families and are willing to work in underdeveloped areas would be given preference for the scholarships. 

Applicants must receive a recommendation letter or an approval letter from the local village chief, along with a letter stating their poverty status. 

Applicants must also be willing to sign an agreement stating their commitment to work in underdeveloped areas after they graduate. 

The scholarship program for nurses and midwives is included in the 2009 provincial budget. 

Kariyasa said Bali had allocated a further Rp 98 billion for the state-implemented School Operational Assistance program, with billions more to trickle in as subsidy money for schools and scholarship money for students at all education levels. 

He said the provincial administration had prepared Rp 1.6 billion to provide for some 800 eligible undergraduate students in state and private universities, who would each be given Rp 3 million in scholarship money. 

If the provincial administration delivers on its promise, the region's total spending on education will be Rp 518 billion, or about 20 percent of the island's regional budget allocation.

Indonesia, India cooperation in IT wide open

Yogyakarta (ANTARA News) - The chance of cooperation between Indonesia and India in information technology is wide open. 

India is now well known as the country improving rapidly its information technology. 

"There are many potential of cooperation between Indonesia and India in information technology sector. Many companies in India are willing to expand their business in Asian countries like Indonesia," Indian ambassador to Indonesia Biren Nanda said on Thursday in an international seminar in Yogyakarta`s State University (UNY). 

At this moment, Nanda said, countries using India`s information technology service are the United States and Europe. 

"The information technology can cut down the cost of companies and government. It is very suitable to be implemented in Indonesia," Nanda said. 

Indonesia, like India, has many factors such as a number of qualified human resources that can support the development of information technology. 

Nanda also said the information technology has many advantages to be developed because it does not need much physical means, no pollution resulted and it can absorb many work forces. 

Meanwhile, UNY head Rochmat Wahab said the information technology cannot be separated in people`s life in this globalization era. 

"The information technology will be implemented in the daily life so people have to use it in their daily life to improve it," Wahab said. 

"In the future, to form the world class university, I hope there will be an exchange program, like students exchange, lecturer as well as university`s staffs," Wahab said. 

India in the recent years rapidly develops information technology and has gained profit of 47.8 million USD for the national income in 2008. 

Some policies to improve the information technology in India like the making of legal protection, fiscal intensive, the simplified procedure, the building of infrastructure and investment in education was made by the government.

Indonesia to host Int`l humanitarian conference on Palestine

Jakarta (ANTARA News) - Indonesia will host an International Humanitarian Conference on Assistance for Palestine at the Jakarta Convention Center (JCC) here from October 31 to November 2, 2008, the chief organizer said. 

Deputy Chief of Commission III of the House of Representatives (DPR) which deals with legal and human rights affairs, Suripto, said here on Thursday that about 300 domestic and international non-governmental organizations (NGOs) would take part in the conference. 

Suripto who is also the conference`s chief organizer said that the participants would discuss various forms of assistance for the Palestinian people, both for those who lived the Palestinian areas and for those who still stayed in refugee camps in the Middle East. 

The conference is also expected to stress rejection of the Israeli occupation of the Palestinian territories. Besides, it will also voiced its rejection of the Israeli oppression and captivation of Palestinians who are posing a threat to the people of Palestine. 

Indonesia will host the conference as part of its efforts to create world peace and justice. During the colonial era, Indonesia in its struggle for independence also got support from other countries, including nations in the Middle East. 

"India provided food assistance. So was Egypt, a country which was the first to give its international recognition of the Indonesian Independence in 1945," Suripto said. 

Suripto who is also chairman of the National Committee for the Palestinian People (KNRP), said that a number of KNRP noted members would attend the conference, such as Permadi (of the Indonesian Democratic Party of Struggle), Abdullah Toha (of the National Mandate Party-PAN), Khofifah Indar Parawansa (of the National Awakening Party -PKB) and women`s prominent figure Tuty Alawiyah. 

Sometime in the past a number of countries in Asia and Africa (beginning from Indonesia and South Africa) in turn hosted ministerial conferences on capacity building for Palestine. 

Various sides were able to play significant roles in the program, Suripto said.

Scholarships still provided despite global economic crisis

Tifa Asrianti, Triwik Kurniasari, and Anisa Basuki, The Jakarta Post,  Jakarta    

The city administration will still provide scholarships to gifted and dedicated students, especially those requiring financial assistance, despite the U.S.-led economic crisis, an official says. 

Jakarta Middle and High Education Agency head Margani Mustar said the crisis would not affect the agency's scholarship program. 

"The National Education Ministry has made it a priority program so it is using state budget funds. I'm sure the global economic crisis will not affect the ministry's policy and the scholarship program," Margani said. 

The agency gives scholarships to 45,600 high school and university students, or 12 percent of the 380,000 students recorded at the agency, he said. 

"Besides scholarships from the agency, several foundations provide scholarships through us." 

In 2008, 400 university students received scholarships from the agency, 34,000 vocation school students received scholarships from the central government and 8,000 state high school students received scholarships from foundations, he said. 

Students eligible for scholarships were high achievers from low-income families, Margani said. The agency obtains the eligible recipients' names from school principals, he added. 

During economic crises, there is a tendency for companies and institutions to cut items from their budget, for example corporate social responsibility (CSR) programs, to curb expenses. 

But this kind of crisis has not affected the Sampoerna Foundation's scholarship program, the foundation's senior media relations officer, Agatha Simanjuntak, said. 

The foundation has made a commitment and will continue supporting the education sector no matter what happens, she said. 

"There will be reduction of funding on regular programs provided for elementary, junior high and senior high school students," Agatha said. 

"There will be no reduction of scholarships for bachelor's and master's programs for local and overseas in the near future." 

Besides the regular programs, she said, the foundation welcomed companies or people to help fund its programs. 

Sampoerna creates a model program, like training for teachers or principals, before offering them to companies or individuals, she said. 

The foundation has at least 80 partners, Sampoerna public relations officer Silfia Febrina said. 

"Our partners have a strong commitment to supporting our programs, so up to now we have faced no problem with the global economic crisis," Silfia said. 

The crisis has not reduced foreign countries spending aimed at providing Indonesian students with equal opportunity to access quality education. 

Katsunori Tsunoda from Japanese Embassy said the Japanese government was committed to providing full scholarships to deserving students every year. 

He said the scholarships covered registration fees, test fees, tuition, return flight tickets and monthly allowances. 

Every April, the Japanese government sends more than 160 Indonesian students to study in Japan, Tsunoda said. 

The Japanese government offers various scholarship programs for research, undergraduate, technical college, professional training college, teacher's college and Japanese studies students, he said. 

The students take Japanese for the first six months before joining classes, he added. 

M.K Singh from the Jawaharlal Nehru Indian Cultural Center said the Indian government was fully committed to providing scholarships to Indonesian students. 

"It is not going to be affected or curtailed by the prevailing global economic crisis," Singh said. 

"So feel free to apply for our scholarship programs, including Training under the Indian Technical and Economic Cooperation Programme (ITEC), Colombo Plan and Indian Council for Cultural Relations (ICCR)."

All expenses in connection with the recipients' studies, including international travel costs and living expenses, are borne by the Indian government, he said.

Construction of Jakarta`s subway to start earlier

Jakarta (ANTARA News/Asia Pulse) - The Jakarta city administration said it will start construction of an underground railway track one year earlier than the original schedule of 2010. 

Jakarta Governor Fauzi Bowo said apart from facilitating economic development in the city, the project will help provide jobs for 50,000 people. Local products will make up most of the building materials and equipment used in the construction of the project, Bowo said. 

Construction will be handled by a Japanese contractor in cooperation with local partners, Bisnis Indonesia reported. 

Source: Business in Asia Today - Oct. 29, 2008 / published by Asia Pulse

GMR to buy Indonesian coal mine for $100 million

Raghuvir Badrinath, Business Standard / Bangalore October 30, 2008, 0:02 IST 

Bangalore-based GMR Infrastructure, which has interests in power generation, airports, roads and urban infrastructure, is set to acquire a coal mine in Indonesia for close to $100 million (around Rs 490 crore). 

The mine is understood to have reserves of 110 million tonnes. This move comes close on the heels of GMR acquiring a 5 per cent stake in a South African mining firm for $15 million. The infrastructure major is further evaluating its option of raising stake in the African mining firm to 50 per cent for $115 million by 2008-end. 

Sources in the company indicate that they had initially agreed at a price of $100 million for the Indonesian mine, but are negotiating to bring down the cost by 10-15 per cent due to the current downturn in the global economy. A spokesperson for GMR Energy offered no comment on the deal. 

GMR Energy is the operational arm executing the projects and is understood to have lined up various projects with an estimated capacity of 3,300 MW over a period of time. 

Currently, the company has a power generation capacity of close to 420 MW – one unit in Tamil Nadu with a capacity of 200 MW and another barge-mounted power plant capable of producing around 220 MW. 

The company is on an aggressive fund-raising drive for its various power projects and is understood to have recently raised Rs 450 crore debt from Axis Bank. It is further looking at raising an additional Rs 1,000 crore in the next 12 months. 

“The project which we have lined up does not have immediate need for cash. We are evaluating funding options and intend to move at an appropriate time,” an official detailed. 

Earlier this year, GMR Infrastructure had planned to take GMR Energy public, but has kept the plan in abeyance due the dismal market conditions. 

GMR is also set for financial closure of its 1,050 MW thermal power plant at Kamalanga in Orissa. The project's financial closure is expected by November and the company's equity contribution will be to he tune of Rs 750 crore. 

Company sources further indicate that one of its gas-based projects in Vemagiri in Andhra Pradesh with a capacity of 370 MW is idle due to non-availability of gas from the KG Basin and is expected to be operational by February 2009, once the gas starts flowing in. 

In addition to India-based power projects, GMR recently bought 50 per cent stake in Intergen NV, a global energy major with operational capacities of 8,086 MW and developmental capacities of more than 4,600 MW for around $900 million.

City to move on projects to create employment

Tifa Asrianti, The Jakarta Post, Jakarta  

In anticipation of a looming global financial crisis and mass layoffs, the city administration says it will push forward several labor-intensive projects. 

Governor Fauzi Bowo said his administration would expedite projects that create employment, in a bid to soften the blow to Jakarta from the economic downturn. 

"We will accelerate the budget disbursement and start projects such as river dredging, subway construction and school operational funds. It will be a pro-poor policy because it will create jobs," he said. 

"The city budget may only be 10 percent of the regional domestic product, but it is still the economic motor. So once it's disbursed, we expect the work to start rolling in." 

The city administration is planning to dredge Jakarta's rivers and waterways to tackle flooding. 

One of the projects is the dredging of 12 waterways, slated for completion in December. The Rp 23 billion (US$2.4 million) project will dredge 243,322 cubic meters of garbage out of the waterways, which vary in length from 467 meters to 3,533 meters. 

"We expect to sign a contract with the tender winner by the end of this month," said Budi Widiantoro, deputy head of the city's public works agency. 

State-of-the-art dredging equipment will be brought in from the Netherlands to dredge the Ancol and Mati canals and the Pademangan River. 

"With the equipment already at Tanjung Priok Port, we can start dredging the canals in November," Fauzi said. 

Besides dredging minor waterways, the city administration will next year dredge the 13 major rivers crisscrossing the city, using a Rp 1.2 trillion loan from the World Bank. 

Mochamad Tauchid Tjakra Amidjaja, the city's transportation agency head, said his office would try to expedite land acquisition for the subway project, expected to help ease Jakarta's notoriously atrocious traffic jams. 

The administration says it will complete the land acquisition in 2009 and continue with the subway construction in 2010. 

"The land acquisition and construction can be done simultaneously. We will use Rp 22 billion to acquire 7,000 square meters of land near Lebak Bulus Terminal in South Jakarta to build the subway depot and final station. We're still in discussions with the South Jakarta mayor," Tauchid said. 

Fauzi was upbeat about the projects' prospects of creating enough jobs. 

"We will also prepare for mass layoffs in industries affected by the global financial turmoil. We have asked businesses to find alternatives to such layoffs," he said.

PLN operates Asia's first CPO-fueled power plant

Alfian, The Jakarta Post, Jakarta   

State electricity company PT PLN fired up the engine of Asia Pacific's first crude palm oil (CPO) fueled power plant in Dumai, Riau, on Wednesday. 

"This is a pilot project. The power plant is operating, but it is still in the commissioning stage," PLN director Murtaqi Syamsuddin said. 

The power plant will be able to generate 10 megawatts (MW) of electricity. 

Murtaqii said the plant had to be fired up with diesel fuel in order for the engine to reach the required temperature before it could operate entirely on CPO. 

"The equipment converts crude palm oil to fuel," he said while adding that the conversion was done by an engine produced by Neue Maschinenbau Halberstadt GmbH (NMBH), a German-based biofuel engine producer. 

NMBH's director for Marketing and Sales, Franz J. Komischke, said that to convert CPO into fuel for a power plant the size of the one in Dumai would require an investment between Rp 22 billion (US$ 1.9 million) and Rp 29 billion. 

"The investment figure pretty much depends on how many engines a power plant has and the size of the engines," he said. 

According to Komischke, by replacing diesel fuel with CPO, the power plant's production costs could be reduced by 40 to 60 percent. 

Based on the current oil price level, the conversion of a 15MW power plant will reduce production costs by $4 million to $4.5 million per year, he said. 

About 1,500 tons of CPO is needed per year for a 10MW power plant, he added. 

The government issued a regulation last month mandating the use of biofuel by manufacturers, commercial business, fuel retailers and power plant operators.

BCA signs deal for UIB sharia takeover

The Jakarta Post, Wed, 10/29/2008 10:52 AM  

Publicly listed PT Bank Central Asia (BCA), the nation's second largest lender, announced Tuesday a deal to acquire PT United International Bank (UIB) to help expand its sharia business. 

The bank said it had inked a sale and purchase agreement to acquire a 100 percent stake in UIB, which is owned by the Tjahyadikarta family. 

Under the deal, the takeover will be worth about Rp 242 billion (US$24.2 million), BCA said in a statement. 

BCA plans for the whole purchasing process to be completed in early 2009, after the company receives approvals from the shareholders and the central bank. 

The bank's next step will be to convert UIB into a sharia bank, BCA said. 

The conversion process will be done after completing the acquisition process, which will need at least one year. 

BCA has more than seven million accounts and owns the central bank's certificate worth Rp 26.8 trillion. It currently has 815 branch offices. 

UIB is a national private bank with assets valued at Rp 665.7 billion at the end of June 2008, a credit portfolio of Rp 462.2 billion and third party funds of Rp 553.6 billion. -- JP/iwp

Obama's former house in Jakarta up for sale

The Jakarta Post 

Robin McDowell, The Associated Press, Jakarta   

The small colonial-style house Barack Obama lived in as a child has received a steady stream of visitors ahead of the U.S. presidential election, from potential buyers and journalists, to a businessman who wants to turn it into the "Sweet Home Obama Bar."

 BEWARE OF DOG: An Indonesian "Beware of Dog" sign sits in front of the two home compound of which the house where Obama lived in Indonesia, right, is part Tuesday in Jakarta. (AP/Ed Wray)

Tata Aboe Bakar, the 78-year-old owner, is in little mood to sell, noting that the property, sequestered between a large mosque and park in an upscale neighborhood of the Indonesian capital, has been in the family since 1939. 

Much, he said, would depend on the price. 

The two-bedroom pavilion Obama lived in - initially built as a guesthouse - would be sold with the main, sprawling residence next door and the 12,900 sq. foot (1,200 sq. meter) plot of land. Together, they have an estimated market value of $3 million dollars. And that does not take into account the potential Obama-factor if the Democratic presidential candidate wins on Nov. 4. 

Aboe Bakar says one broker claimed a U.S. Embassy official was ready to pay five times its worth if that happened, though Tristram Perry, the embassy's public diplomacy officer, said he was not aware of any such offer. 

Obama moved to Jakarta with his American mother and Indonesian stepfather in 1967, spending the first two years in another humble home, where chickens and ducks used to cackle in the backyard and two baby crocodiles slithered around in a fenced-off pond. 

They relocated to the small red-tile roofed pavilion with art deco windows on Taman Amir Hamzah Street in 1970 when Obama was 9 years old and stayed there for the next two years.  

BARACK'S BARRACK: Syahhrial Rozali, the current resident of the house where U.S. Presidential Candidate Barrack Obama lived as a child, walks in front of the home Tuesday in Jakarta. (AP/Ed Wray)

Aboe Bakar has few stories to tell about Obama as a child, except the time his poodle ran away, never to be seen again. 

"Oh, he cried for two days," the former Navy admiral said, wearily taking a drag from his third cigarette as he showed off a long list of visitors who have knocked on his door in recent weeks. 

He also flashed a photograph of the young family sitting on a wooden bench in the front yard that, like much else, remains in place nearly four decades later. 

Among those who have expressed interest in the house have been Bart Bartele, a Dutchman who owns several popular pubs in Jakarta. 

He says he offered to rent the smaller pavilion to open the "Sweet Home Obama Bar" - a cafe that would feature an "Obama-blend coffee," a mix of beans from Kenya and Java. He would also serve "stroopwafels," a caramel-type treat brought to Indonesia during the centuries-long occupation of the Dutch. 

"The idea is to have snacks, simple food and maybe some merchandise," Bartele said, adding that he was not certain, with all the recent interest, if Aboe Bakar would go for it. "We'll see. It's mostly just for fun anyway."

Govt to end VAT, luxury tax and duties in FTZs

Mustaqim Adamrah, The Jakarta Post, Singapore   

The government will soon abolish value-added tax (VAT), luxury tax and import duties on production goods in free trade zones (FTZs) in the Riau Islands province in a bid to stimulate businesses. 

The provincial administration and the customs and excise directorate general have finalized a draft regulation that will eliminate these taxes and duties in these areas, according to Riau Islands governor Ismeth Abdullah. 

The draft regulation, he said, would henceforth be based on the 2007 law on FTZs, which stipulates that no VAT, luxury tax or import duties on production goods are applied in FTZs. 

"We (the administration), along with the customs and excise directorate general, just finalized the idea (of the draft regulation) this (Thursday) morning," Ismeth told The Jakarta Post recently. 

Customs and excise director general Anwar Suprijadi would submit it within one to two days to Finance Minster Sri Mulyani Indrawati and to President Susilo Bambang Yudhoyono for approval, he said. 

He said the draft regulation, when enacted, would automatically annul the 2003 government regulation on the imposition of VAT and luxury tax on industrial estates in the bonded zone of Batam Island - the province's biggest island. 

He also said the draft regulation would instead help the central government generate more income from corporate income tax as the elimination of VAT and duty would stimulate more trade. 

"I understand the draft regulation may seem to result in lower revenue from VAT, luxury tax and import duties," Ismeth said. 

"However, we could collect bigger revenues from income tax generated from higher frequency of business activities as a result of the tax reductions," he added. 

According to Ismeth, income tax revenue collected from companies in Batam Island alone reached Rp 1.7 trillion (US$171 million) in 2006 and nearly Rp 2 trillion in 2007. 

The draft regulation will also designate particular seaports on Batam, Bintan and Karimun Islands -- the province's FTZs - to channel export and import activities. 

"We'll cooperate with customs officials to record and control goods entering and going out through the future designated ports," he said, adding that each of the three islands were expected to have two ports. 

The Indonesian Chamber of Commerce and Industry (Kadin) chairman, M. S. Hidayat, told the Post he welcomed the draft regulation as it would encourage businesses in the area.$736 billion of assets under management worldwide as of Aug. 31 this year.

Morgan Stanley remains upbeat on RI, opens local branch

Ika Krismantari, The Jakarta Post, Jakarta 

Against the backdrop of the global financial crisis, the United States financial giant Morgan Stanley has officially opened its doors in Indonesia in a decision which reflects investor confidence toward the country's economy in general. 

Morgan Stanley Asia Indonesia president director Inghie Kwik announced Monday the opening of the company's local branch after it had secured licenses from the country's stock market regulator (Bapepam) in July. 

"This (decision to open a branch) is a long term investment for us...compared with Thailand, the Philippines, and Vietnam Indonesia is a very big country, its population and its associated industries, such as retail, consumer goods and telecommunications are examples that the country's potentials remain promising despite the global financial crisis," Inghie said. 

The decision, he said was also part of the company's long term strategy in expanding its operation in Southeast Asia's emerging markets. 

The Jakarta office is the fifth Morgan Stanley branch operating in the Southeast Asia region. 

Morgan Stanley's presence in Indonesia dates back to the 1990s, when the company supported local companies in international fund raising and in advising on merger and acquisition plans. 

As its confidence grew on the economy, the company established a supporting office in 2005 and it then sought a brokerage and underwriting license from the regulator. 

Inghie said the Jakarta office would focus on providing services related to capital market businesses, including bond issuance and initial public offerings (IPOs) and also on mergers and acquisitions. 

"We believe the stock market will be normal again, but we don't know yet if the recovery curve is going to take an L shape, a U or a V," he said when asked his view on the local bourse, which has felt the impact of the global financial crisis. 

Next year, Morgan Stanley has been given a mandate to underwrite four IPOs worth about U$600 million in total, Inghie said. 

The company, whose largest shareholder is now Japan's Mitsubishi UFJ Financial Group, was the financial advisor to the country's second largest IPO, that of Adaro Energy worth $1.3 billion in July. 

It was also the sole financial advisor for the selling of the local bank Buana to Singaporean UOB and the merger of Lippo Bank and Bank Niaga. 

Aside from capital market services, the company will remain open to opportunities for expanding its business to other sectors such as commodities or real estate, the two sectors where Morgan Stanley has enough experience consider expansion. 

The company will host a reception in Jakarta next week to market the formal opening of Morgan Stanley's office in Indonesia. 

Morgan Stanley, with 600 offices in 35 countries, had $736 billion of assets under management worldwide as of Aug. 31 this year.

Riau Islands FTZs to cut red tape

Fadli, The Jakarta Post, Batam    

The Batam, Bintan and Karimun (BBK) Special Economic Zone Commission has ensured speedy licensing procedures free from illegal levies in a bid to attract foreign investors impacted by the global financial crisis, given lower local production costs compared to other countries in the region, such as Vietnam, Malaysia, Thailand and China. 

Head of the commission, Ismeth Abdullah, also the Riau Islands governor, told The Jakarta Post recently the commission was resolved to complete every investment license procedure in three weeks, compared to up to three months previously. However, environmental impact analysis reports would still take more than a month to complete. 

"We have cut the long and costly bureaucratic red tape and there won't be illegal levies demanded from officers in the field because we have provided them with proper incentives, besides monthly salaries," said Ismeth. 

Ismeth considered that the economic crisis in the United States and Singapore would have positive impacts for foreign investment growth in the Riau Islands, despite some forecasts by provincial foreign investors of a decline in business in 2009. 

He said the competitive position of the area would remain advantageous, given the far higher production costs in neighboring countries. 

"The crisis in America and Singapore has apparently affected the productivity of companies from these countries, so (our) bureaucrats should be able to conjure up strategic breakthroughs and be more proactive toward the business world given the current economic situation," said Ismeth. 

Total investments in the Riau Islands are currently valued at US$10 billion, with Singapore having the lion's share at $4 billion, followed by the U.S.at $1.5 billion. 

The BBK Zone Commission has projected further foreign investments of $5 billion over the next five years. 

According to Ismeth, the BBK zone performs more competitively than other industrial areas in Asia. Commission data shows that the production costs of a company in BBK were 15 percent lower than a similar company in Vietnam and 10 percent lower than in Johor Baru, Malaysia. 

"We must ensure that the flow of goods in Batam can run smoothly and free of illegal payments," said Ismeth. 

He was positive this initiative would get a positive response from business circles and assured business people that this would not merely be lip service but could be counted upon. 

Investors can file a complaint to the commission if licensing procedures exceed the fixed time limits and receive incentives, such as facilities in the next licensing procedures. 

Riau Islands Chamber of Commerce and Industry head Johannes Kennedy Aritonang said the commitment by the BBK zone commission to speed up investment license procedures should be applauded, but his office expected that this would not be just lip service. 

"Although (licensing procedures in) a number of countries are faster, this new breakthrough must be well appreciated. This shows that the government is committed to facilitating the business sector, a prerequisite for a special economic zone," said Johannes.

Japan builds new school for disabled children in Tangerang

Multa Fidrus, The Jakarta Post, Tangerang 

SLB Yanaiz, a special school for children with learning disabilities sponsored by the Japanese government officially opens its doors Tuesday. 

Japanese Ambassador to Indonesia Shiojiri officiated at the opening of the school which particularly aims to educated disabled children from low-income families. 

The school is located on Jl. H. Ridwan, Pinang district, in Tangerang municipality. 

"We're very happy now we have a new school building. We feel comfortable in the classroom and it's closer to my home," Khalid, 20, told The Jakarta Post. 

Khalid, who is autistic and must manage the chronic condition of hydrocephalus, where excessive liquid buils up regularly in the crenium, said he only had to pay between Rp 5,000 (50 US cents) and Rp 10,000 in school fees each month. 

SLB Yanaiz is managed by Erihatu Samasuru Lesuri Tapirone (ESLT), a humanitarian foundation Izak Timisela established in 2000. 

"We started the school in a rumah petak (modest rental house). Now we have a three-storey building with 12 classrooms, a clinic, a kitchen, a teachers' office and an auditorium all because of the interest of community members and the Japanese government," Izak said. 

The new school building, which cost Rp 1.1 billion, was erected with financial assistance from the Japanese government on a 250-square-meter plot in Poncol Bojong kampung. 

It focuses on teaching children with various disabilities including autism, visual impairment, blindness and partial or complete deafness. 

According to Shiojiri, the Japanese government financed the project, which serves both children and adults, under the Grassroots Program with financial assistance amounting to $85,994.

Korea grants $3 million for road-building in Sumatra

The Jakarta Post, 10/28/2008 2:13 AM  

The Korea International Cooperation Agency (KOICA) has awarded a grant of US$3 million to the Ministry of Public Works to establish a master plan for a network of arterial roads in Sumatra. 

KOICA is a Korean government agency founded to assist socio-economic development in developing countries. 

"The roads will generate economic activity and raise the competitiveness of the region by connecting ports to businesses," said Achmad Hermanto Dardak, the ministry's director general of highways, speaking Monday on the sidelines of the first workshop for designing the master plan. 

Heads of regional development planning boards from all the island's provinces attended the workshop. 

The Indonesian government requested support from the Korean government to develop the master plan as a follow-up to joint task force meeting between the two governments in April 2007. 

KOICA is providing the Indonesian government with technical assistance to develop the master plan on behalf of the Korean government, Hermanto said. 

Technical planning experts from Korea Transport Institute and from two Korean engineering consulting companies, Sambo and Yooshin, will participate. The Indonesian government will provide administrative assistance. 

The planning project is expected to be completed in two years by July 2010. The preparation phase for road building will take place between 2010 and 2014. 

The construction of the Sumatra road network itself is planned in three phases of five years each, from 2015 to 2029. 

Sumatra has 10 provinces: Bangka Belitung islands, Bengkulu, Jambi, Lampung, Nanggroe Aceh Darussalam, North Sumatra, Riau, Riau islands, South Sumatra and West Sumatra. (iwp)

 

Government ready to carry out share buy-back program through PIP

Jakarta (ANTARA News) - The government is ready to continue its share buy-back program in the Indonesian Stock Exchange (BEI) through the Government Investment Center (PIP) whose fund management also involves the asset management company PT Perusahaan Pengelolaan Aset (PPA), a senior official said. 

"The funds available at the PIP amount to Rp4 trillion, of which Rp2.5 trillion is managed by the PIP itself while the remaining Rp1.5 trillion is managed by the PPA," Muhammand Said Didu, secretary of the office of the state minister for Natinal Development Plan/chairman of National Development Planning Board (Bappenas), said here on Monday. 

He said that at present PPI was under the process of appointing a security firm which would be named as a buy-back broker for state-owned enterprises (SoE). 

"Once the security firm has named, the PPI and PPA will realize this week the buy-back of SoE's shares," Didu said. 

The funds with PPI were reserve funds for infrastructure development. 

Apart from the PPA, the government is also encouraging 10 publicly listed SoEs to buy back their shares at BEI with a fund accumulation reaching Rp7 trillion. 

Didu said that the office of the Ministry of Enterprises only provided directives, not intervening in the implementation of the buy-back program.

IRN to build Rp3t Sumatra railway, roads

Khairul Saleh, The Jakarta Post, Baturaja, South Sumatra 

PT Inti Rajawali Nusantara (IRN) plans to build roads and railways in Bengkulu and South Sumatra provinces at a cost of around Rp 3 trillion (US$300 million). 

The projects will connect Muaraenim in South Sumatra and Linau Bintuhan in Bengkulu. The roads and the railway will pass through Ogan Komering Ulu and Ogan Komering Ulu Selatan in South Sumatra, IRN president director Hakman Novi said recently. 

The company is developing transportation infrastructure to facilitate the conveyance of its mining and plantation products such as coal and crude palm oil. 

Currently, IRN depends on the railway from Tanjung Enim, Muaraenim regency, for transporting the company's products to Palembang or Lampung. 

The new roads and railway will shorten the distance for transporting coal from the South Sumatran cities to the three major seaports, Tanjung Enim and Tanjung Api-Api in South Sumatra, and Tanjung Karang in Lampung. 

Once the new roads have been developed, the distance by road between Tanjung Enim to Linau Bintuahan will only be 150 kilometers. 

In the long-term, the company also plans to develop the seaport of Linau into an international class gateway to the provinces of Bengkulu and South Sumatra. 

"This will attract more investors and create jobs while at the same time offering safe, efficient, and competitive transportation, which will facilitate the development of the industries of the two regions," he said. 

The planned Rp 3 trillion investment would be spent during the next 3 to 5 years, he said. 

"Every legal requirement will be met, including the permit from the Forestry Ministry because the project will pass through the Bukit Raja Mandara protected forest," he said. 

"The land compensation for the people of the affected areas will be paid wholly by the company," he said. "No government funds are being used for this project." 

Ogan Komering Ulu regent Yuli Nawawi said that he appreciated the projects planned by IRN. 

He emphasized that central and provincial governments would ensure that the company used only the areas designated in their surveys for the purposes already stipulated. 

He added that the projects, for which all permits must be properly issued, would speed up the development of the region.

Biz Talk Interview – Mari Elka Pangestu, Indonesian Minister of Trade

By Gary Bowerman in Jakarta, Indonesia, on Sunday, 26 October 2008  

BizChinaUpdate,  Interviews, BizTalk Interviews 

Mari Elka Pangestu has been Indonesia’s Minister of Trade since October 2004. She gained Bachelor and Master of Economics degrees at the Australian National University in Canberra, followed by a Ph.D in International Trade and Finance at the University of California, Davis. She spoke to BizChinaUpdate at the opening of the 2008 Trade Expo Indonesia exhibition in Jakarta, before heading to Beijing to attend the Asia-Europe leaders summit. 

Can you summarise Indonesia’s trade relationship with China, and how do you see it developing? 

M.P.: Indonesia and China agreed a strategic partnership between the two nations, with a target for total trade of USD20 bn by the end of 2008, and USD30 bn by 2010. At the moment, there are differing numbers on each side. China says the balance on trade between the two nations is USD20 bn, our figures say it is between USD16-17 bn. So, from the Chinese figures, we have already surpassed the 2008 bilateral target. 

Most of our exports to China are in natural resources, such as gas, coal, oil, rubber, minerals and palm oil, and we import machinery and manufacturing products. We’d like to rebalance in future, and export more processed foods and manufactured goods to China.  

As manufacturing costs rise in China, what are the opportunities for Indonesian manufacturers? 

M.P.: Footwear is definitely an opportunity that we see coming back. Before the 1997 Asian Crisis, Indonesia was ahead of Vietnam and just behind China in footwear manufacturing, before a lot of footwear brands left for China. Toys is another area; China has suffered some quality and safety issues, and we are seeing a lot of interest from foreign brands. We’re also hopeful for our garments industries, and electronics – although, unfortunately, we’ve not seen the interest we would like coming back yet. It’s an industry that needs a fast turnaround, so we need to improve our roads, ports and infrastructure. 

In the automotive sector, we are quite competitive on parts and family cars, which we are already exporting. ASEAN and China will create more trade in components and specialised multi-purpose vehicles, which Toyota is already producing here. China will increasingly get into the game, and there are two Chinese automakers that have set up joint ventures in Indonesia, as well as motorcycle manufacturers. 

China has suffered damaging domestic and overseas product quality scandals. How will Indonesia try to avoid similar problems? 

M.P.: We must try to ensure that our manufacturers understand the regulations at home and abroad. To do this, we will improve testing, certification and enforcement in the market. For example, we are creating a taskforce to increase supervision of food and beverage products, both for domestic and overseas consumption. It’s also important to educate consumers and make sure they know what signs to look out for. The recent melamine scandal in Chinese dairy products has definitely had an effect, it has made consumers much more aware. 

A buzz phrase at the 2008 Trade Expo Indonesia is “market diversification.” Why is this so important? 

M.P.: Indonesia is relatively well insulated from the global slowdown, as exports account for only around 20 per cent of our total GDP. But, our traditional export markets are the United States, Europe and Japan, so we must find new ways to remain competitive in a global age. This means reaching out to new export markets. 

China and Korea are both growing export markets for Indonesia, and are becoming more important to our economy. Now, our exporters need to explore the Middle East, Russia, Eastern Europe, Africa and Latin America. We’ve seen growth in markets like Nigeria, South Africa and Brazil – and are focusing on the Central Asian republics that were formerly part of the Soviet Union, such as Kazakhstan, Tajikistan and Uzbekistan. These are resource-rich countries with a lot of purchasing power. We see opportunities to increase our exports of furniture, household accessories, consumer products and automotive parts to those nations. 

You have said that tourism is a potential growth sector for Indonesia. How will you promote Indonesia as a tourism destination in China? 

M.P.: We have identified China, India and Russia as high-growth tourism arrival markets for Indonesia, as all three countries have definable and growing middle classes that increasingly wish to travel. We feel there will be a slowdown for tourism from Europe, the United States and Japan next year. However, having our country removed from the U.S. travel warning was very important for showing Indonesia as a tourism destination. 

We have direct flights from China with Garuda, and have had visa-on-arrival for two years now. Chinese travellers need to have a visa before they leave the country, and we’ve been trying to work around that. Singapore has a good system whereby Chinese travellers can use a credit card to go there, and we are seeing if we can become involved in some way. 

We need to be more aggressive on tourism and promotional tours in China. We’ll be trying harder to raise our profile to Chinese tourists, especially leading up to the 2010 World Expo in Shanghai. We are currently in the process of finalising the design for our Expo pavilion.

China, Europe, Asia seek investment chance in Batam

Batam (ANTARA News) - Some companies from China, Europe and Asia were seeking opportunities of investment in Batam, as a result of batam`s participation in trade expo in Nanning, China. 

"Many companies from many countries are seeking the chance of investment in Batam," Batam Mayor Ahmad Dahlan said here Saturday, adding that majority of the entrepreneurs are interested in making investment in electronics industry. 

"I told them Batam is very close to Singapore, and they are interested in making investment," he said. 

From the talks with many bussinessmen, Dahlan said, many of them asked about the safety assurance, infrastructure and regulations in Batam. 

"I said the security and regulations in batam are very pro-business," Dahlan added. 

Meanwhile, Riau Islands province`s Kadin chairman Johanes Kennedy said Batam change its direction of investment chance source from the United States to Middle East. 

"It is safer than investment from the US, especially with the financial crisis nowadays," Kennedy said.

Mayors arrive for heritage cities forum

Blontank Poer, The Jakarta Post, Surakarta 

At least 156 mayors from 32 cities in Asia and Europe and others from across the country are expected to attend the 2008 World Heritage Cities Conference and Expo (WHCCE) in Surakarta, Central Java, running from Oct. 26 to 28. 

"Some of the delegations have already arrived in Surakarta," the event's promotion manager Irfan Sutikno told The Jakarta Post on Friday. 

At least 450 members in all have confirmed their participation. Mayors and regents from across the country have also registered as participants. An estimated 2,000 people will flock to Surakarta to attend the conference. 

Russia is the country with the highest number of participants (67), followed by Thailand (26), China (14), and Ukraine (9). Other countries participating in the event include Australia, Canada, Japan, South Korea and Spain. 

At least 93 mayors from Indonesia will also participate, in addition to those representing heritage cities. 

One heritage city, Kutai in East Kalimantan, will send a 150-member arts troupe to the event, to be opened by Culture and Tourism Minister Jero Wacik. 

Kutai will present a Hudoq performance from the Bahau Dayak tribe. The city of Kazan in the Russian Federation will also send a cultural group to perform at the Pura Mangkunegaran, the palace in Surakarta. 

Head of Sustainable Tourism at the World Tourism Organization and secretary-general of the Organization of World Heritage Cities, Eugenio Yunis, and Indonesian ambassador to Russia Hamid Awaluddin are also slated to attend the event. 

"Besides boosting networking, the conference will also be beneficial to share experiences among participants, especially in managing cultural assets as tourism potential," Surakarta Mayor Joko Widodo said recently. 

Joko said preparations for the event were almost completed both at the main site, the Sunan Hotel, and at the Pura Mangkunegaran where various art performances would be held and historical artifacts exhibited. 

Joko said the country's cultural riches have not been well promoted, so the heritage of many regions and cities were unfamiliar both to the Indonesian public and the outside world. 

He urged cities in Indonesia to present their respective local cultural products during the event, including cuisine, arts and handicrafts, music and dramatic performances. 

Joko has also requested the entire membership of the Organization of World Heritage Cities fully support this year's event in Surakarta. 

The event will commence on the afternoon of Oct. 26 with a parade involving the entire delegation and host committee. At least seven horse-drawn carriages and dozens of buggies have been prepared to carry the mayors who will don traditional attire. It will then be followed by various attractions, such as dances and music from cities across the country. 

A welcome dinner will be held the first night at Taman Balekambang, a new park in the city which rejuvenated a once-squalid area. 

The WHCCE conference will also organize various art performances and exhibit historical artifacts, such as masks, kris, leather shadow puppets and gamelan. Participants will also be invited to visit Kampung Laweyan and Kauman, two batik centers in Surakarta. 

The Pura Mangkunegaran will also organize workshops on gamelan playing and kris making.

Russia to appoint honorary consul in Bali

Andra Wisnu, The Jakarta Post, Denpasar 

In response to the increasing number of Russian tourists coming to Bali, the Russian government will open an honorary consul office in the near future, Russian ambassador to Indonesia says. 

In a meeting with Bali Governor Made Mangku Pastika at his office in Denpasar on Friday, ambassador Alexander Ivanov said the new consul would be located at Jl. Ngurah Rai Bypass No. 118A and the honorary consul would be handled by Chairul Nuku Kamka, the chairperson of an association of tour operators in Bali that deals specifically with Russian tourists. 

Nuku Kamka is an ideal candidate because he deals with Russian tourists directly, Ivanov said after the meeting with Pastika. 

Chairul will be Indonesias first Russian honorary consul to Indonesia, a position Russia endowed him in anticipation of the increase in Russian tourists to Bali. 

The number of Russian tourists has been growing over the past couple of years. Ivanov said he expected the number of Russian tourists to Bali to rise to 70,000, an increase from last years 50,000. 

Japanese and Australian tourists traditionally make up the most frequent visitors of Bali. 

As of last August a total of 1,298,046 foreigners visited Bali, with Japan and Australia making up the first and second spot for the islands top five markets for the islands tourism industry, respectively. 

Taiwan, South Korea and China make up the remaining top five markets, while the United States is in 10th place. 

Ivanov said he had discussed with Governor Pastika several services required for Russian tourists, including visa permits and other immigration services. He said he expected the rise in Russian tourists would improve bilateral relations between the two nations. 

Of course its an input to the Balinese economy. But apart from that, its an input to the cross-cultural relations between our countries because Russian tourists are very much interested in Balinese culture and its a great experience for them to know Balis culture, he said. 

He gave the example of a large number of Russian painters who came to Ubud a few weeks ago and stayed for 20 days to capture Balis landscapes and its architectural sensitivity. 

He said the painters will organize a painting exhibition in Moscow soon to show their perception of Bali. It will be so interesting for Russian people and as well as for Indonesian people to see how the Russian artists receive the local balinese nature,he said. 

"(Its) Balis nature through the eyes of Russian painters." 

He said the arrival of the consul would serve as an intermediary party to promote tourism programs for Bali in Russia that could benefit people from both nations. 

"This is very important. This is a very important aspect of our bilateral relations," he said. 

It was the first time a Russian ambassador to Indonesia had visited the islands governor office. 

Pastika welcomed the gesture, saying the honorary consul appointment signified a good level of trust from the Russian government in Balis government. 

Pastika said he hoped both nations relations would extend further to include industrial, trade and cultural cooperations.

Indonesian firm wins $630 m contract in China-ASEAN Expo

The Jakarta Post | Sat, 10/25/2008 9:26 PM  

An Indonesian company participating in the fifth China Asean Expo (CAEXPO) in Nanning has won a contract worth US$630 million to supply China with food products. 

CAEXPO vice secretary general Li Jinzao announced the news at the closing ceremony of the exposition on Saturday at the capital of the autonomous province of Guangxi as quoted by kompas.com. However, he did not disclose the name of the company. 

Jinzao said the fifth expo recorded total trade transactions worth $1.6 billion between China and ASEAN countries. 

The expo also saw 31 business promotion programs, which produced 136 business investment contracts worth $6.3 billion or up by 3.41 percent compared to the total value of investment contracts made in last year’s expo. (and)