Contractors to spend nearly $16b in 2010

Alfian, The Jakarta Post, Jakarta | Thu, 12/31/2009 8:42 AM

Although this year’s investment has failed to meet the target, an upstream oil and gas regulator claims that oil and gas contractors have proposed a US$15.99 billion investment for upstream activities in 2010, or a 41 percent increase from investment in 2009.

Anditya Maulana, head of the operation division at BPMigas, told reporters Wednesday the investment figure was based on the work program and budget (WPNB) submitted by oil and gas contractors to BPMigas.

“Of the total planned investment, $13.63 billion is expected from production working areas, while the remaining $2.36 billion is expected from exploration working areas,” he said.

Energy analyst Pri Agung Rakhmanto said the figure from the production working areas was still reasonable as two massive oil and gas projects, the Cepu block and the Tangguh gas fields, were likely to attract huge investment next year. However, he said the high figure was not necessarily a good indication.

“Please remember that part of the investment will be paid back by the government to the contractors under the cost recovery mechanism,” he said.

Pri Agung questioned the $2.36 billion investment planned for the exploration working areas.

“As we know, many oil and gas blocks have failed to attract investors recently,” he said.

The high investment figure was also proposed by the contractors in 2009. BPMigas said that oil and gas contractors initially proposed a $15.15 billion investment in 2009, but only $10.87 billion of the plan was realized.

“This was caused by the increasing efficiency of contractors and the fact that some projects were delayed both in EPC [Engineering, Procurement and Construction] and drilling,” said Priyo Widodo, head of BPMigas’s division in charge of government revenue shares, adding the investment in the delayed project would be continued over the coming years.

BPMigas also reported that the country’s oil lifting in 2009 was at 949,138 barrels of oil per day (bopd), or 98.8 percent of the state budget’s target of 960,000 bopd.

“This is a result of some delayed projects and unplanned closures that occurred in several working areas,” said Susanto, head of the field operations division at BPMigas.

“More than 197 unplanned shutdowns occurred in 2009 and this caused a loss of about 22,000 bopd of oil,” Susanto added.

BPMigas said it would strengthen its monitoring of the contractors’ maintenance works to avoid similar problems in the future.

There are currently 232 oil and gas contractors operating in Indonesia. As many as 64 contractors are in the production stage, while the remaining 168 contractors are in the exploration stage.

Surakarta to Build a Rp 5.5 billion City Border Monument

Tempo Interactive, Wednesday, 30 December, 2009 | 16:12 WIB

TEMPO Interactive, Surakarta:The Surakarta city government plans to build a city border monument in Adisucipto Street. The budget is planned to amount to Rp5.5 billion.

“The monument will reflect Surakarta’s character as cultural city,” said the Head of the Surakarta City Planning Office Agus Djoko Witiarso yesterday.

The monument will have eight sides and its form resemble Kresna’s hat, the hero of a shadow-puppet story.

According to Agus, the monument will be 38 meters high, with a diameter of 23 meters and it will be installed lying across the street and sheltering it.

Head of the Surakarta Revenue, Financial Management and City Asset Office Anung Indro Susanto said that the monument construction will amount to Rp5.5 billion.

The expense, he said, will not be taken from regional funds.”But from a third party source,” he said.

AHMAD RAFIQ

Rembang Beach Planted with Mangroves

Tempo Interactive, Wednesday, 30 December, 2009 | 16:49 WIB

TEMPO Interactive, Rembang: Hundreds of students from the Nature Lovers Community of the School of Economic Science at YPPI Rembang and other students from Rembang district have planted mangroves on a beach situated in Dukuh Kaliuntu, Pasar Banggi village, Rembang Kota district.

”There are 5,000 mangrove seeds to restore the beach,” said Swantika, coordinator of the activity when contacted yesterday.

They plan to plant the 5 hectare beach with 10.000 mangrove trees. But due to difficulties in obtaining seeds, Swantika said, this year they can only plant 5,000. The students have been planting mangroves now for two years.

The 60 km long Rembang beach is considered to have suffered serious damage. Many areas are transformed into shrimp, milkfish or salt embankments.

There is no regulation to protect the area until now,” said the Head of the Rembang Environment Office Purwadi.

BANDELAN A

Marine Station Launched

Tempo Interactive, Wednesday, 30 December, 2009 | 16:53 WIB

TEMPO Interactive, Semarang: Diponegoro University, Semarang, has launched a Marine Station in Awur Bay, Jepara. The Marine Station is projected as to be a maritime and coastal research and study center with international standards.

“This is an effort to develop marine science productivity,” said the Head of the Marine Station Laboratory Ir. Suryono yesterday. The Marine Station launching was held on Monday.

The station will be the center of maritime and coastal research and study. The research results can be accessed and used for studies or business development purposes.

The research service includes management of coastal and maritime resources which studies exploration potential, conservation and pollution. Besides that, the station will also study sea cultivation, biotechnology, area management and sea cultivation technological package.

“There will also be studies on non-biological potential exploitation, such as embankments, soil water and electric resources,” he said.

ROFIUDDIN

Last trade

The Jakarta Post, Wed, 12/30/2009 8:06 PM | Business

Stock brokers gather during the last stock trade in Jakarta on Wednesday. Finance Minister Sri Mulyani Indrawati said the Jakarta Stock Exchange was closed at 2,534.356 points, or up by 0.61 percent, making it one of the best in Southeast Asia. (Antara/Andika Wahyu)

Carrefour refuses to sell Alfa, files appeal

The Jakarta Post, Jakarta | Wed, 12/30/2009 9:19 PM

France-based retail giant Carrefour defies the anti-monopoly watchdog’s order to sell its Alfa subsidiary and instead files an appeal against the verdict to the court.

In November, the Business Competition Supervisory Commission (KPPU) found PT Carrefour Indonesia guilty of unfair business practices following the acquisition of the PT Alfa Retailindo.

The commission ordered the retail giant to sell all of its shares in Alfa worth Rp 675 billion (US$ 71.55 million) within a year and fined it Rp 25 billion.

Irawan Kadarman, Carrefour Indonesia's corporate communications director, told The Jakarta Post on Wednesday that the retail giant would not obey the orders for the moment until final legal decision in courts have been reached.

An appeal against the verdict had been filed to the South Jakarta District Court, Irawan said.

“We stay in our stance that Carrefour has in no way been conducting monopoly practices,” he said.

The first court hearing is scheduled on Jan. 11, 2010.

KPPU spokesman Ahmad Junaidi said that Carrefour’s rejection was lack of legal and fact basis.

“It’s their right to file appeal,” he said.

“We, however, are optimistic that the court will rule in favor of us. Our ruling is based on deep analysis and investigation which has resulted convincing evidence that Carrefour has conducted unfair business practices,” he said. (bbs)

Indonesia to Relax Forest Protection Rules for Some Infrastructure Projects

The Jakarta Globe,

Indonesia will allow some infrastructure projects deemed in the public interest such as toll roads and geothermal energy plants to operate in protected forests, the chief economics minister said on Wednesday.

Under Indonesian law it is currently forbidden to undertake any kind of activity that could impact on a forest conservation area.

But chief economics minister Hatta Rajasa told reporters that the government would issue a new rule to allow some development in forests after discussions between relevant ministers.

“For the public interest such infrastructure projects and geothermal projects can use protected forests,” Rajasa said.

The users of protected forests would have to compensate by setting aside twice as much land within another part of the province for use as forested land, he added.

The minister said the regulation would give investors certainty and denied it would disturb forest conservation.

“We know that there are many geothermal projects located in protected areas. That’s why this regulation is part of the government’s 100-day program,” he said.

The administration of President Susilo Bambang Yudhoyono, who started a second term in October, has set 100-day programs focused on removing bottlenecks that have stalled investment and infrastructure development in Southeast Asia’s biggest economy.

Overlapping regulations on the environment and resource development frequently complicate plans to develop projects in Indonesia, although green groups also complain that firms are sometimes wrongly given permission to exploit forests.

Indonesia also currently has one of the fastest rates of deforestation in the world that threatens to swiftly erode its dwindling untouched tracts of tropical forests.

At the same time, the developing nation desperately wants to speed up spending on airports, roads, ports and other infrastructure to help reduce inefficiencies and speed up economic growth in order to reduce poverty and unemployment.

On energy, Indonesia has established two crash programs to increase power generation by 10,000 megawatts (MW) in a bid to resolve chronic power shortages in the country.

The first program, which is due to be 40 percent complete by the middle of next year, relies on coal-fired power stations, while a second program, due to start next year, has nearly half, or 4,733 MW, of power slated to come from geothermal sources.

Abadi Poernomo, president director of Pertamina Geothermal Energy (PHE), said previously the company planned to increase its geothermal capacity but had been blocked by the conservation law.

PHE, which is a unit of the country’s state oil and gas firm Pertamina, planned to increase its geothermal capacity to 1,342 MW in 2014 from 272 MW currently. Pertamina already operates geothermal projects in West Java and North Sulawesi. Indonesia is hoping to tap alternative sources of energy to meet rising power demand and cut consumption of expensive crude oil as its own reserves dwindle.

The vast archipelago, with hundreds of active and extinct volcanoes, has the potential to produce an estimated 27,000 MW of electricity from geothermal sources.

However, most of the potential remains largely untapped because the high cost of geothermal energy makes the price of electricity generated this way expensive.

Reuters

Govt to allocate Rp16.68 trillion for road repair

Antara News, Wednesday, December 30, 2009 00:15 WIB

Jakarta (ANTARA News) - The government is preparing a budget amounting to Rp16.65 trillion for road and bridge repairs in 2010, down from the previous year`s allocation of Rp18.64 trillion, a deputy minister said.

Deputy Minister for Public Works Hermanto Dardak said here on Tuesday that of the 2010 year allocation, Rp1.34 trillion would be used to finance repair of 1,477 km highways in northern coasts of Java.

"The highways in the coast of Java get the biggest allocation of the funds because they constitute the backbone of the nation`s transportation and economic distribution," Hermanto said.

He said that the government would also allocate Rp373.26 billion for the repair of 1,186 km of Java`s central axis roads and Rp224.33 billion for the 1,132 km southern Java lanes.

In Sumatra, according to Hermanto, the allocation that would be provided for the 2,805 km eastern trans-Sumatra highways amounted to Rp848.79 billion, the 2,540 km central trans-Sumatra Rp543.06 billion and the Sumatran 2,493 km western lanes Rp418.68 billion.

"We have set a target that in 2014 the whole trans-Sumatran highways would have a width of seven meters,," he said.

The road repair in Kalimantan in 2010 will included the 3,408 km southern highways with allocation of Rp996.89 billion, the 1,900 km central highways with Rp232.63 billion and the 1,557 km northern ones with a fund allocation of Rp192.66 billion.

In Sulawesi, the allocation for the 2.099 km western highways is set at Rp943.98 billion, the 2,346 km central highways Rp 495.03 billion and the 2,054 km western roads amounted to Rp228.93 billion.

In Papua, the government will provide Rp980 billion for 2,060 km strategic roads and Rp460.21 billion for other 1,038 km other roads.

Hermanto said that the government also targeted that in 2014 about 95 percent of national roads in the country would have been in good condition.

First Lady calls for intensified Posyandu activities

Antara News, Tuesday, December 29, 2009 20:07 WIB

Jakarta (ANTARA News) - First Lady Ani Yudhoyono has asked members of the Family Welfare and Empowerment (PKK) team to intensify the activities of integrated health posts (Posyandu).

"Intensify innovative activities (of Posyandu) in accordance with local conditions," she said when visiting Matahari II posyandu at Lubang Buaya , Cipayung sub district, East Jakarta, Tuesday.

The First Lady was accompanied by Health Minister Endang Rahayu Sedyaningsih, Jakarta Governor Fauzi Bowo, National PKK Team Chief Vita Gamawan Fauzi, Jakarta`s PKK Team Tatiek Fauzi Bowo and members of the United Indonesia Cabinet Ministers` Wives Solidarity (SIKIB).

She said around 50 percent of Posyandu`s health funds was contributed by the public.

Meanwhile, the health minister reported that the number of Posyandus had increased from 232,000 in 2004 to 267,000 in 2007.

The maternal mortality rate in 2007 had dropped to 228 per 100 thousand and would continue to be cut to 118 per 100 thousand live births by 2015.

The mortality rate is expected to be reduced from 34 per 1000 live births in 2007 to 24 per 1000 live births in 2015.

"And the number of malnourished infants will be down from 18.4 percent in 2007 to less than 15 percent in 2015," the health minister said.

Improvement of Micro-credits Channeling

Tempo Interactive, Tuesday, 29 December, 2009 | 15:37 WIB

TEMPO Interactive, Medan:The central bank, Bank Indonesia (BI), has predicted that credit channeling for small- and medium-sized enterprises (SMEs) in North Sumatra this year could reach above 50 percent following improvements in this area’s economic development.

Up until October, micro credit channeling reached 49 percent of bank total credits of Rp68.29 trillion.

“We are optimistic because micro business potential here is quite large,” said BI Medan branch Head Gatot Sugiono.

According to Gatot, up until last October, micro-credit channeling amounted to Rp3.41 trillion, an increase compared to September, which amounted to Rp33.07 trillion.

The credit development is deemed positive because it occurs in the midst of credit channeling general decreases all October.

To increase micro-credits channeling, BI will try to push the banking industry to increase their credit portion for SMEs.

Moreover, this sector has proved to be more resistant to the financial crisis that occurred since the end of last year. “The potential for micro businesses in North Sumatra is still quite good,” he said.

ANT | FAMEGA

Subang to Build Patimban Harbor

Tempo Interactive, Tuesday, 29 December, 2009 | 15:39 WIB

TEMPO Interactive, Subang:The Subang Government, West Java, will build a harbor in the Patimban beach area, Pusakanagara. “We hope the harbor could be a support for Tanjungpriok International Port,” said Subang Regency Head Eep Hidayat in his office yesterday.

Eep went on to say he hoped that loading and discharging activities of exported and imported goods from West Java manufactures could also take place there.

So far the government has constructed a 5.6 kilometer road, but it has not yet been covered in asphalt.

“It is estimated that this project will cost Rp50 billion,” he said.

NANANG SUTISNA

No More Barren Land in 2010

Tempo Interactive, Tuesday, 29 December, 2009 | 15:41 WIB

TEMPO Interactive, Semarang:In 2010, the Central Java Forestry Office targets planting trees in a 647,000 hectare forest area. “In 2010, Central Java is targeting the realization of a green forest program,” said the Head of the Central Java Forestry Office Sri Puryono yesterday. The target is no more barren land.

Up until this December, Sri said, there were only 3,000 hectares left in Central Java that were barren and critical land. This land is included in the tree planting program in 2010.

ROFIUDDIN

PMI receives Rp1.5 B from capital market community

Antara News, Tuesday, December 29, 2009 02:38 WIB

Jakarta (ANTARA News) - The Indonesian Red Cross (PMI) has received Rp1.5 billion in aid from the Indonesian capital market community for earthquake victims in West Sumatra and Tasikmalaya.

Indonesia Stock Exchange (BEI) President Director Ito Warsito handed over the aid to new PMI Chief M Jusuf Kalla at the PMI Headquarters here on Sunday, the PMI said in a press statement on Monday.

Kalla expressed gratitude to the capital market community for trusting the PMI to channel the aid to quake victims in the two areas.

The aid would no longer be used for an emergency response phase but for a recovery one, Kalla said.

Realizing that Indonesia was highly vulnerable to natural disasters, the nation must keep watch against various natural disasters, particularly those caused by human activities, he said.

The one-time president said the PMI had committed itself to providing maximum services to victims of natural disasters by training more volunteers to achieve the goal.

"To that end, we will always cooperate with all partners to support the PMI`s activities," he said.

Ito Warsito meanwhile said his side had chosen PMI to channel the humanitarian aid because the agency had a better knowledge of the quake victims` needs, and was quick in channeling aid.

PMI data show the agency has so far channeled aid to 25,020 families and distributed more than 4 million liters of clean water among quake victims in West Sumatra.

An earthquake measuring 7.6 on the Richter scale rocked West Sumatra province on September 30 this year, killing more than 1,100 people and injuring thousands of others.

VP hands over PNPM assistance for North Sulawesi

Antara News, Tuesday, December 29, 2009 02:33 WIB

Manado, North Sulawesi (ANTARA News) - Vice President Boediono handed over a National Self-reliant Community Empowerment Program (PNPM) assistance for 2010 worth Rp204.8 billion here on Monday.

The vice president who handed over the assistance to North Sulawesi Governor Sarundajang said that the government would continue to carry out the program and increase its amount in the future.

"With the PNPM program many activities which directly benefit the people could be carried out," Boediono said.

Rp46 billion in Financial Aid for Small Entrepreneurs Disbursed

Tempo Interactive, Monday, 28 December, 2009 | 17:23 WIB

TEMPO Interactive, Jakarta:The Jakarta Government disbursed Rp46.7 billion in financial aid for micro-scale businesses. “The program is expected to be an economic foundation for Jakarta,” said Jakarta Governor Fauzi Bowo yesterday.

Fauzi explained that the funds came from the local government, not from donations. The people are asked to follow the regulation agreed to.”The funds will not bring any added value if not properly and honestly managed, “he said.

For now, Fauzi said, only 88 cooperatives could channel the funds. The number of cooperatives will be added step by step until it reaches 267 cooperatives starting next year. “So that every district has a source to manage micro funds,” he said.

Fauzi explained that district level channeling was chosen because cooperative members understand more the condition of their residents. “We will also provide training to cooperative administrators. They will be accompanied by experts,” he said.

Head of Cooperatives, Small- and Medium-Sized Businesses Ade Soeharsono added that the persons eligible for the funds are those in non-formal sectors who don’t have business permits.” Like meat ball sellers, small store owners, barbers and other micro business owners,” he said.

They can ask for loans after joining cooperatives in their district. Every application will then be selected by cooperatives administrators based on feasibility analysis.“The loan limit is Rp5 million,” said Ade.

The fund must be returned to the government in form of dividends in two year time.

RIKY FERDIANTO

Pertamina Loses Monopoly on Domestic Subsidized Oil Products

The Jakarta Globe

An Indonesian worker rides a bike past barrels of oil at a Pertamina depot. (Photo: Bagus Indahono, EPA)

Indonesia’s state oil firm Pertamina has lost its exclusive right to distribute subsidized oil products in 2010 after a unit of Malaysia’s Petronas and a local firm won supply tenders, a regulator said on Monday.

Petronas has won the right to distribute 20,440 kiloliters (128,547 barrels) of subsidized low-octane gasoline in the city of Medan, North Sumatra, next year, the head of Indonesia’s downstream oil regulator, BPH-MIGAS, said.

Indonesia’s PT Aneka Kimia Raya (AKR) Corporindo would also distribute 56,500 kiloliters (335,328 barrels) of subsidized diesel oil in Lampung province, in South Sumatra and in the cities of Banjarmasin and Pontianak in Kalimantan.

“By law, Petronas and PT AKR Corporindo are allowed to supply subsidized fuel. After we evaluated their capabilities in providing fuel, we selected them,” Tubagus Haryono, head of BPH-MIGAS, told reporters.

The remaining subsidized fuel would be supplied by Pertamina in 2010.

Overall, the government planned to supply of 21.4 million kiloliters (134.5 million barrels) of subsidised gasoline and 11.2 million kiloliter of subsidized diesel oil in 2010, Haryono said.

This year, Indonesia expects 19.44 million kiloliters of subsidized low-octane gasoline and 11.6 million kiloliter of diesel to be supplied.

BPH-MIGAS decides each year on the rights to supply and distribute subsidised oil products such as low-octane gasoline, kerosene and diesel.

Royal Dutch Shell Plc had also joined the tender to distribute fuel this year.

“The volume of subsidized gasoline and diesel is expected to be higher than the government’s 2009 plan, due to higher transportation consumption,” Haryono said without elaborating.

Separately, the director general of oil and gas at the energy ministry, Evita Legowo, said the government wanted the supply of subsidized fuel to be cut in the future.

The level of consumption of fuel is critical because it helps determine the scale of subsidies the government has to set aside in the budget.

Pertamina’s monopoly over all sectors of the oil market was ended in 2001, and three years later Indonesia opened up its domestic downstream oil business to foreign firms, paving the way for them to directly import fuel and sell to local customers.

But Pertamina had up until now retained the exclusive rights to supply subsidized oil products — which includes almost all products except for premium motor fuel — in the domestic market.

Reuters

Fingers are crossed for a spirited New Year

Prodita Sabarini, THE JAKARTA POST, JAKARTA | Sun, 12/27/2009 2:05 PM

The Indonesian Hotel and Restaurant Association (PHRI) is optimistic booze will be flowing on New Year's Eve as shipments of alcoholic beverages are scheduled to be delivered to the Jakarta port this week, the association chairman said.

PHRI Jakarta chairman Khrisnadi said this week that hoteliers and restaurateurs were counting on the country's sole importer of wine and spirits, PT Sarinah, to deliver the alcohol soon.

He said they were experiencing shortages of wine and spirits and needed fresh supplies to meet increased end of year demand.

Earlier this month, custom officials detained 34 containers of wine and spirits in Tanjung Priok Port because Sarinah officials under-reported the value of the shipment.

The Finance Ministry's custom and excise office said Sarinah had to pay a fine equal to 1,000 percent of the total value of the goods.

"It was agreed that Sarinah would deliver the alcohol *after paying the fine*," Khrisnadi said.

PT Sarinah director Jimmy Gani said they were working to deliver the alcohol. "Some of the shipment is still being detained in the warehouse because of technicalities. We have to pay the fines and have not yet done so fully," he said.

He said the cost of the fine would not be passed on to consumers. "Most consumers are foreign tourists who will complain if the price goes up," he said.

Alcohol is heavily taxed at around 500 percent.

Khrisnadi said it would be disgraceful for Indonesia if the alcohol failed to be delivered.

"The alcohol shortage would not affect expatriates who have lived here for a while. We have had shortages previously so they understand the situation," Khrisnadi said. "But it will be a problem for foreign tourists who are here on vacation and want to celebrate New Year's Eve and find there's no alcohol."

Jimmy said Sarinah had imported 270,000 crates of alcohol this year, around "70 percent of our quota".

In 2008, PT Sarinah, reported only Rp 62 billion (US$5.8 million) in collected tax revenue from its alcoholic imports. The government has reported recently that up to 60 percent of alcohol consumption in Indonesia is supplied by the black market, causing annual losses about Rp 1.5 trillion in alcohol tax revenue.

The Customs and Excise Office has urged the Trade Ministry to allow more companies to import alcoholic beverages, instead of just Sarinah, to help curb smuggling.

Malaysia to set up museum in Makassar

Antara News, Sunday, December 27, 2009 11:35 WIB

Makassar (ANTARA News) - The Malaysian government will open a museum gallery in Makassar, provincial capital of South Sulawesi, in 2010, a Malaysian official said.

"We will build a Malacca museum in the city of Makassar in the near future. We are planning to commence the building of the museum early in 2010," head of Malaysia`s Malacca Museum Datuk Wira Hj Hamdin Bin Abdollah said here over the weekend.

He said that the Malaysian government expected that a number of historical items from Malacca, Malaysia, would be displayed at the museum.

Makassar was known as the biggest port city several centuries ago.

The Malaysian official said that the Malaysian government had also set up Malaccan museum galleries in Indonesian cities such as in Sawahlunto (West Sumatra), Palembang (South Sumatra), Jambi, Aceh and Lampung.

"We have established Malacca museums in these cities," Datuk Wira said.

KPK to hold anti-corruption music event

The Jakarta Post, Jakarta | Sat, 12/26/2009 3:45 PM

In a bid to educate the public on anti-corruption efforts, the Corruption Eradication Commission (KPK) will hold an event featuring some local bands and singers on Saturday night at the anti-graft building in South Jakarta.

Kompas.com reported that the event, carrying the theme of “Indonesia is Free from Corruption”, would begin at 7:30 p.m.

Some groups of students are scheduled to read some orations on their stance against corruptions.

“Some local actresses like Happy Salma and Kurcaci will be present at the stage,” said a member of the event organizing committee, Riben Anggayuda. (ewd)

Ministry Offers Indonesia's Forests for Investment

The Jakarta Globe, Arti Ekawati

The Ministry of Forestry is offering 44.3 million hectares of forest for industrial development and hopes to bring in more than Rp 1.6 trillion ($170 million) in revenue.

Hadi Daryanto, the director general of forest production at the ministry, said the forest areas will be available between 2010 and 2014. Developers will be able to use the land for plantations, logging or eco-tourism.

“Information about the areas can be seen on the ministry’s official Web site if investors are interested in developing the forest area,” Hadi said.

There are about 150 million hectares of forest across the country, with 36.8 million hectares earmarked for industrial use.

In 2008, the government received Rp 2.5 trillion of non-tax revenue from forest concessionaires and other companies in the forestry sector. In 2009, the government only targeted Rp 2.3 trillion because of the economic crisis.

Hadi added that investment in the forestry sector has a bright future, especially as it can help to reduce carbon emissions. He cited South Korea’s plan to build a wood-chip factory in Central Kalimantan. These chips can be used as a raw material for producing paper or as a substitute for coal.

South Korea is trying to replace 5 percent of its coal consumption with wood chips. The South Koreans are searching for overseas sites where they can plant the acacia other eucalyptus trees that are needed to make these chips.

South Korean Ambassador Kim Ho-young said Indonesia is a good place to start investing in the forestry sector. He encouraged cooperation between South Korean and Indonesian companies in planting trees.

“If South Korean and Indonesian companies work well together, this will become a good model for companies from other countries to invest in Indonesia,” Kim said.

Forestry Minister Zulkifli Hasan plans to plant one billion trees starting next year to help reduce carbon emissions by 26 percent by 2020.

The minister has launched a program called “one man, one tree”, which encourages citizens to plant at least one tree during their lifetime.

“However, aiming to reduce emissions, the president asked me to increase the amount of trees into one billion trees to be planted in one year starting 2010,” Zulkifli said. The trees are expected to be planted in one million hectares of dry land across the country.

The ministry will also a launch monitoring, reporting and verification system, using a satellite data system, to supervise the planting of trees during the program.

The monitoring program will cost Rp 15,000 per hectare.

New PLN leader urged to develop sustainable energy sources

Antara news, Friday, December 25, 2009 12:10 WIB | Economic & Business

Jakarta (ANTARA News) - The Indonesian Young Entrepreneurs Association or HIPMI has asked the newly installed president director of state-owned electricity company PT PLN, Dahlan Iskan, to help accelerate development of sustainable energy sources.

Hipmi chairman Erwin Aksa said in a press release on Thursday that PLN`s new top leadership was expected to show their competence in managing the company not only by preventing the recurrence of blackouts in all parts of Indonesia but also by enabling PLN to contribute to national economic development.

"It is impossible to carry out development without energy. So PLN must be able to help spur development," Erwin said, adding that the electric services trend in all countries whose economies are strong rely on the sufficiency and accessibilty of electricity apart from budget and efficient bureaucracy services.

Hipmi also believed that Dahlan Iskan was facing a great challenge because Indonesia would have to deal with very tight competition under the Asean-China Free Trade Agreement (AC-FTA) that would come into force in early 2010.

"Whether or not Indonesia will be successful in facing China will highly depend on the availability of electricity. China has no problem with electricity, what about us," Erwin said.

Dahlan Iskan was installed as PLN president director by the State Enteprises Minister Mustafa Abubakar on Wednesday (Dec.23) to replace Fahmi Muchtar.

Minister Mustafa Abubakar said at a press conference after inaugurating the new PLN board here on Wednesday that the newly-installed management of PLN is to save up to Rp15 trillion in expenditures by cutting fuel oil use by as much as 35 percent.

"The cut in fuel oil use will be one of the radical concepts Dahlan Iskan has offered," the minister said.

"The concept is good and radical. The concept is about empowering PLN now and in the future," he said.

Abubakar added that Dahlan had pledged leaps in the handling of the company.

PKT to spend US$140 million on capital expenditure in 2010

Nani Afrida, The Jakarta Post, Jakarta | Thu, 12/24/2009 9:57 AM

State fertilizer producer PT Pupuk Kalimantan Timur (PKT) plans to spend US$140 million in capital expenditure next year, mostly on building a new coal-fired power plant.

“We will spend $120 million of capex on constructing the plant” PKT President Director Hidayat Nyakman told journalists on the sidelines of new factory ceremony in West Java on Wednesday.

PKT also plans to spend $15 million on new factories and about Rp 400 billion on its cooperation with several plantation companies.

Hidayat said that the company will mobilize the capex from internal cash flow and loans from banks, including state bank PT Bank Rakyat Indonesia (BRI), which has committed $100 million for PKT.

“We will receive gas supply in the beginning of next year, so that it will be easy for us to get some loans from banks,” Hidayat said.

By the end of this year, about 208,000 tons fertilizer from PKT will be exported, he says.

“Vietnam and Thailand have won the biddings [for the purchases],” Hidayat said.

PKT, a subsidiary of state fertilizer company PT Pupuk Sriwijaya (Pusri), now operates five urea fertilizer factories with a total capacity of 2.98 million tons per year.

It also operates four ammonia factories with a total capacity of 1.85 million tons per year.

PKT is the biggest fertilizer producer in Indonesia as it supplies two-thirds of the country’s urea fertilizer production.

The company aims to produce 3 million tons of urea next year.

In the first half of the year, the company’s revenue dropped by 26 percent to Rp 3.7 trillion ($373.7 million) on the back of lower fertilizer prices, meanwhile its profits before tax stood at Rp 370 billion.

In 2008, the company booked Rp 627.8 billion in net profits, a 52 percent increase from a year earlier.

Domestic consumption of fertilizers currently stood at 1.4 million per year. The government predicts that in 2025 Indonesia will need about 23.2 million tons which will have to be provided by fertilizer producers.

On Wednesday, the government officially opened a new factory belonging to state fertilizer PT Pupuk Kujang, which can produce up to 100,000 tons of NPK granules per year to help meet growing domestic market demand.

Jakarta 2030: Public input needed

Evi Mariani, The Jakarta Post, Jakarta | Thu, 12/24/2009 10:10 AM

What will Jakarta be like in 2030? Would you entrust the future to city officials or would you want a say yourself?

Several urban activists who live in and love Jakarta gathered Wednesday at Tarumanagara University (Untar) in West Jakarta to emphasize that they should have a say in shaping the city’s future.

They claimed the city administration had compiled a document called RTRW (spatial planning) Jakarta 2010-2030 with almost no input from the public. The 2007 Spatial Planning Law stipulates that public participation is required when designing a city masterplan, but the administration has clearly failed to adhere to this law.

“They said they would have a campaign publicizing the planning draft to the people, but I have not heard any announcement or news on this,” Elisa Sutanudjaja, an architecture lecturer at Pelita Harapan University said.

Suryono Herlambang, a spatial planning lecturer at Untar, which hosted the meeting, said the city’s Regional Planning Agency (Bappeda) invited him in November to discuss the masterplan draft, but he found it to be lacking.

“What they meant by public participation is presenting us with the highly technical draft and asking for our opinions,” Herlambang said.

He said, as a spatial planning expert, even he could not immediately grasp the draft details.

“Even non-technical people should be able to envisage Jakarta in 2030,” Sri Palupi, the director of the Institute for Ecosoc Rights, said.

Bappeda has created the rtrwjakarta2030.com website where people can download the plan. However, Irvan Pulungan from the Indonesian Center from Environmental Law said not all resident had access to the Internet.

The website was set up in the third week of December, and Elisa said she received information that Bappeda were accepting emails from the public at rtrwdkijakarta@gmail.com until Jan. 10.

Herlambang said the contents of the plan itself seemed to pose a lot of problems that residents should scrutinize. Compared to 2030 masterplans for Sydney and Melbourne in Australia, New York City and London, Herlambang said Jakarta’s plan lacked vision.

Sydney planners, for example, stated in a separate “Vision Book” that they wanted a “sustainable city,” a city “with walkable streets,” “which celebrates outdoor life,” “which is not clogged by cars.”

Palupi added that Jakarta’s masterplan clearly lacked a human aspect as it included no mention of people or the demographic makeup of Jakarta.

Elisa said the masterplan had conflicting ideas. She said it included plans to build toll roads, which would encourage private car use but on the other hand, it planned a “park and ride” system, which suggested a well-planned public transportation.

Following the two hour discussion, the participants, comprising around a dozen people concerned with issues such as the environment, the economy, society, habitat, and urban poor, agreed they should help the city increase public participation.

They said they would scrutinize the masterplan and meet again on Jan. 7 to highlight problems and offer solutions.

Marco Kusumawijaya from the rujak.org community said participants accepted the 2030 masterplan was important, therefore they wanted to participate in shaping it. “We are concerned and we want to say, please take a look at New York, Melbourne and Sydney,” he said. “We want to be involved and we will do this with energy and courage.”

Indonesia power chief to build plants outside Java

Reuters, by Muklis Ali, Wed Dec 23, 2009 5:02pm IST

JAKARTA, Dec 23 (Reuters) - Indonesia's state electricity firm plans to build new power plants outside Java island with a combined capacity of around 2,000 megawatts to resolve chronic power shortages, the firm's newly appointed head said on Wednesday.

Dahlan Iskan, a 58-year-old media tycoon who also operates a small power plant in East Kalimantan, replaces Fahmi Mochtar as president director of PT Perusahaan Listrik Negara (PLN) after criticism over power shortages in the capital and other areas.

PLN operates around 25,000 MW of electricity, but most of its plants are old, so daily output is far below capacity.

"We plan to boost electricity generation outside Java, because they have already had shortages for years," Iskan told reporters after a ceremony to mark his appointment.

He said that the new small-scale coal-fired power stations with a combined capacity of around 2,000 MW would be built in areas such as Kalimantan and Sulawesi.

The administration of President Susilo Bambang Yudhoyono had put pressure on Mochtar, who was appointed in March last year, to increase power capacity after frequent blackouts across much of the archipelago.

Local media has been reporting for some time that Mochtar would go and Indonesia's state enterprises minister Mustafa Abubakar said the replacement of the president and other directors at PLN was aimed at refreshing management.

"We evaluated the board of directors of PLN and as a result we decided we needed new management to develop the company further," Abubakar said.

Yudhoyono has previously criticised PLN management for failing to respond to pressure from the regions to build new power plants.

The government has launched two crash programmes to increase power generation because Southeast Asia's biggest economy faces chronic power shortages after years of under investment.

The first crash programme aims to add 10,000 MW of coal-fired power stations to meet electricity demand that officials say is growing at around 10 percent a year.

The second phase, due to start next year, aims to tap more alternative sources of energy such as geothermal to meet rising power demand and cut consumption of expensive crude oil as reserves dwindle.

PLN plan to tender for power projects worth $2.3 billion next year under the second phase of the 10,000 MW programme with nearly half, or 4,733 MW, due to come from geothermal.

(Editing by Ed Davies)

Indonesia province offers $1.4 bln geothermal projects

Reuters, Wed Dec 23, 2009 10:37am GMT

JAKARTA, Dec 23 (Reuters) - Indonesia's West Java province is offering three geothermal projects requiring $1.4 billion of investment to be financed under a public and private partnership scheme, an official at the planning ministry said on Wednesday.

The government has launched two crash programmes to increase power generation because Southeast Asia's biggest economy faces chronic power shortages after years of under investment.

The first 10,000 megawatt programme relies on coal-fired power plants, while nearly half of a second 10,000 MW programme, due to start next year, will come from geothermal sources.

"The IFC (International Finance Corporation) may help with the feasibility studies as long as the terms are clear," said Bastary Pandji Indra, a director at the ministry in charge of projects under public-private partnership.

The IFC, the private arm of multilateral lender the World Bank, could also provide further financing for investors who win tenders, Indra added.

The geothermal projects being offered are Gede Pangrango with a potential capacity of 210 MW, Sangkan Hurip with 100 MW and Papandayan with 160 MW.

The government has in recent years sought to attract more investment by partnering with private firms, usually with authorities freeing up land and private firms financing most of the construction.

A second director at the planning ministry, Monty Girianna, who is in charge of mineral and natural resources, said investors were likely to be interested in the projects provided locations were free of any land disputes and it was clear how much state power firm PT Perusahaan Listrik Negara (PLN) would pay for the electricity.

An official at the mines and energy ministry said earlier this month that PLN would open tenders to buy the electricity from geothermal developers using a ceiling price of 9.7 U.S. cents per kilowatt hour, more than double the 4 U.S. cents per kwh currently, in a bid to lure investors.

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

However, most of the potential remains largely untapped because the high cost of geothermal energy makes the price of electricity generated this way expensive.

Nonetheless, local energy firms Medco Energi Internasional (MEDC.JK) and Star Energy, are looking at making new investments, while Chevron (CVX.N), the world's largest private producer of geothermal energy, has previously said it plans to double its geothermal business in Indonesia and the Philippines by 2020.

(Reporting by Dicky Kristanto, Sonya Angraini and Andreas Ismar; Editing by Ed Davies)

Indonesia sees 116 Tangguh LNG (Papua) cargoes in 2010

Reuters, Thu Dec 24, 2009 5:49am GMT

JAKARTA, Dec 24 (Reuters) - Indonesia's BP (BP.L)-led Tangguh project in Papua is expected to export about 116 cargoes of liquefied natural gas (LNG) in 2010, an official from the country's oil and gas watchdog, BPMIGAS, said on Thursday.

The target is more than double an earlier estimate by BPMIGAS head Priyono in October that 50 cargoes would be shipped from Tangguh in 2010, against 16 cargoes in 2009.

"Based on volume of contracts, Tangguh's will export about 116 LNG cargoes. The exports will include to China and South Korea," Budi Indianto, the deputy head of BPMIGAS, told Reuters.

The Tangguh LNG plant has a capacity to produce 7.6 million tonnes per year via two trains.

Demand for LNG in the Pacific Basin market has fallen this year as the global economic recession took a toll, leading many buyers to use flexibility in their long-term contracts to cut back on shipments.

Global LNG prices will remain under pressure next year as new supply comes online and demand remains weak, the head of Qatargas Operating Co said at the World Gas conference last week.

Indonesia is the world's third-biggest LNG exporter after Qatar and Malaysia.

(Reporting by Muklis Ali; Editing by Ed Davies)

Govt to form infrastructure fund soon

Antara News, Thursday, December 24, 2009 02:29 WIB

Jakarta (ANTARA News) - The government is soon to form an Infrastructure Fund tasked with collecting long-term funds from donor countries and other sources to speed up infrastructure development, a top public works official said.

"The Fund`s establishment has been awaited for a long time because we badly need long-term financing sources for infrastructure development," Deputy Public Works Minister Hermanto Dardak said here on Tuesday.

The contributions to the Fund could come from Indonesia itself, the World Bank, the ADB or other institutions prepared to make long-term investments in infrastructure development in Indonesia, he said.

In fact, pension or insurance funds could also put their money in the Infrastructure Fund which was now in a preparatory stage.

The fund`s formation would enable the government to be more involved in providing a number of "missing links" in existing infrastrcture projects such as the Trans-Java turnpike and other toll road systems, he said.

The Fund would in effect be something like a holding company among PT SMI, the World Bank and ADB and operate under its own management.

Hermanto said the Public Works Department had so far had access only to short-term financing sources to carry out road construction projects which actually need long-term financing.

As a result, the projects were often subject to interruptions or delays. "With the present government budgets, we can only tackle certain missing links in exissting toll roads such as the Solo-Kertosono turnpike. "We cannot undertake whole projects," he added.

The Trans-Java toll-road project actually needs a huge budget to clear 4,500 hectares of land but because of budget constraints the government had to implement the project piecemeal or according to a priority system, Hermanto said.

This was why, after more than five years of land-clearing efforts, only 27 percent of the land needed for the Trans-Java toll had now actually been cleared.

Reducing carbon emissions 26 pct needs Rp83.3 trillion

Antara News, Thursday, December 24, 2009 02:31 WIB

Jakarta (ANTARA News) - Secretary of State Minister for National Development Planning/chief secretary of the National Development Planning Agency Syahrial Loetan said reducing carbon emissions 26 percent by 2020 would need Rp83.3 trillion.

"Our plan is that to reduce carbon emissions to 26 percent needs Rp 83.3 trillion up to 2020," he said in Jakarta Wednesday.

He said that to achieve the projected carbon emission reduction, the government has seven priority sectors.

The priorities include that the energy used would reduce carbon emission by one percent. The transportation and industrial sectors will support the reduction of carbon emissions respectively by 0.3 percent and 0.01 percent.

The agricultural sector is expected to reduce the carbon emissions by 0.3 percent, forestry by 13.3 percent, waste management by 1.6 percent, and peatland management by 9.6 percent.

He said that any donor institution with a commitment to take part in reducing carbon emissions in Indonesia, the government will raise the projected emission reduction to 41 percent by 2020.

"Donors with a contribution, our Corporate Social Responsibility may be set at 41 percent," he added.

Up till now, he said, commitments to the emission reduction program have yet to be better arranged. He said many countries had expressed interest in taking part in the program in Indonesia.

"As Indonesia has been assumed at one of the world`s lungs, but since we have yet to be arranged better, such as what had been offered for the program, the measures to be submitted, how to monitor them, we will try to see that all of them are transparent and accountable," he said.

Change Supply Chain Pattern to Prevent Counterfeiting

Tempo Interactive, Wednesday, 23 December, 2009 | 16:43 WIB

TEMPO Interactive, Jakarta:Head of Indonesia Anti-Counterfeiting Society (MIAP) Widyaretna Buenastuti has suggested that companies which own brands should change their supply chain system and pattern to prevent counterfeiting.

“This will limit consumers’ ability to buy counterfeit products in Indonesia,” he said on the launching of the Society for Original Products and the website www.peduliasli.com yesterday.

Present at the launch were the Justice and Human Rights Minister Patrialis Akbar and the Director General of Intellectual Property Rights Andy N. Sommeng.

The circulation of counterfeit products in Indonesia, said Widyaretna, was a cause for concern.

This was because all four counterfeit categories – true counterfeit products, look a likes, reproduction and imitations—are available in Indonesia.

Patrialis said that circulation of counterfeit products had a negative impact on the national economy.

It will create a negative perception to investors that their intellectual properties are not protected in Indonesia. “As a result, they will not invest in Indonesia,” he said.

Eka Utami Aprilia