Govt to spend Rp 2.5 t on public housing

The Jakarta Post  | Sat, 01/31/2009 8:10 PM  

The government will disburse Rp 2.5 trillion (US$220 million) in the form of subsidies to help develop 170,000 units of houses 40,000 apartment units this year. 

State Minister for Public Housing Mohammad Yusuf Asy’ari said in Banda Aceh on Saturday that the subsidies would be equally distributed throughout the province. 

“We will work with the provincial government in distributing the funds. It will be implemented in a first come-first served basis,” Yusuf said. 

Earlier reports state that those eligible to get the subsidy tax payers with monthly income no more than Rp 4.5 million. (and)

Japan announces Asia aid package

BBC World

Prime Minister Taro Aso: 'I have decided on an economic stimulus package' 

Japan's PM Taro Aso has announced a 1.5 trillion yen ($17bn;£11.6bn) aid package to help Asian countries weather the economic downturn.

The money will be spent over three years on infrastructure projects and promoting trade.

It is hoped the proposed funding, which will be finalised at a summit later this year, will boost regional growth.

Mr Aso called on wealthy nations to help smaller countries and warned against protectionism.

Asia's banks have weathered the financial crisis better than their European and US counterparts.

But the region's export-dependent economies have been hit as the global downturn saps demand for consumer goods.

"Japan is ready to provide ODA (overseas development assistance) of not less than 1.5 trillion yen or about $17bn in total," Mr Aso told the World Economic Forum in Davos.

"It will be necessary to strengthen regional cooperation towards strengthening Asia's growth potential and expanding domestic demand," Mr Aso said.

Mr Aso also said that Japan's development assistance would be on the precondition "that the flow of trade and investment not be prohibited".

"We will resolutely fight all protectionism," he said.

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Japan's PM: Help smaller countries, help ourselves

With arms stretched out

The Jakarta Post  |  Sat, 01/31/2009 4:08 PM  
 

 Kindergarten and elementary students reach their hands to touch two characters of Jalan Sesama, the local version of Sesame Street TV show, during the show's launching ceremony at the National Gallery in Jakarta on Saturday. The show is produced by a non-profit educational institute Sesame Workshop in cooperation with Jakarta-based Creative Indigo Production with funding from the United States Agency for International Development. JP/P.J. LEO

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City to Fix Drainage

The Jakarta Globe, Ambang Priyonggo, January 31, 2009

The Jakarta administration has allocated Rp 41 billion ($3.6 million) to improve the city’s drainage system this year, Governor Fauzi Bowo said on Friday. 

Fauzi said the poor drainage system had already contributed to severe flooding in many areas of the city this year, and that the city needed to allocate special funding in its 2009 budget to plan for drainage projects. 

However, Fauzi declined to give any details regarding the additional spending, only adding that the project would be the city’s first priority this year. “We are going to work on it,” he said. 

In other efforts to mitigate the flood danger, the city plans to drill five million biopores across the city in coming years. Biopores are small holes that act as organic waste catchments, increasing the absorption of groundwater. 

City Secretary Muhayat said that there were currently only about 450 biopores within the city’s five muncipalities, but that efforts were underway to change that. “We expect that there will be one million biopores in each municipality,” he said, while supervising the drilling of 1,000 biopores on the grounds of the National Monument park on Friday. 

Muhayat said he would urge district and subdistrict heads to intensify biopore drilling efforts in their areas by enlisting the help of local residents. Biopores, he said, could be drilled in private yards as well as local parks to help cope with rainy season flooding. 

Meanwhile, the Meteorology and Geophysics Agency, or BMG, has warned Jakarta residents of heavy rains potentially leading to floods over the next three days. 

“We warn Jakarta residents to be aware of the heavy downpours and the likelihood of more flooding in some areas of the city,” BMG spokesman Achmad Zakir Zamawi said. 

Achmad added that heavy rain was predicted for Bogor and Depok, which might cause the Ciliwung River to overflow. The BMG has predicted thunderstorms for much of February.

Indonesia Strikes Oil With Arab Investors

The Jakarta Globe, Janeman Latul & Muhammad Al Azhari, January 30, 2009

Abu Dhabi’s crown prince, Sheikh Mohammed bin Zayed al-Nahayan, is one of two investors from the United Arab Emirates who are set to invest at least $3.7 billion in infrastructure projects and oil refineries in Indonesia by March, said the co-head of the World Islamic Economic Forum on Wednesday. 

“Two foreign investors from the Middle East have already committed around $3.7 billion, out of our forecast of $5 billion in total,” said Tanri Abeng, co-chairman of the Wief and chief commissioner of PT Telekomunikasi Indonesia Tbk, or Telkom. “An investor from Abu Dhabi is in the final stages of investing in infrastructure and energy projects in East Kalimantan and South Sumatra, by teaming up with the two provincial governments.” 

Tanri revealed few specific details about the projects. 

“The Crown Prince himself will be investing, and the total investment will be about $2 billion to $3 billion,” he said. 

Early this month, Tanri said he expected Indonesian companies to sign more than $5 billion worth of deals during the Wief, which will be held from March 2 to 3 in Jakarta. “The figure may end up lower than our projections, but hopefully we will be able to achieve our targets at the forum,” he said. 

The crown prince is the head of Mubadala Development Co., which functions as the main investment vehicle for the Abu Dhabi government. 

Dubai, the second-richest emirate in the UAE, is also interested in investing in Indonesian assets. Tanri said representatives from Dubai were expected to sign a joint-venture agreement with PT Pertamina that would increase the state oil and gas producer’s oil-refining capacity. 

“The value of this investment will be between $1 billion and $1.7 billion,” Tanri said. “[The deal] has come quite far and is now down to lawyer-to-lawyer negotiations. I expect the two sides to actually sign a joint-venture deal during the forum, rather than just a tentative memorandum of understanding.” 

On Jan. 9, Pertamina, Japan’s Itochu Corp. and Dubai-based ETA Star Property Developers announced plans to jointly increase Pertamina’s refining capacity in Balikpapan, East Kalimantan Province, from 260,000 barrels per day to 280,000 bpd by this year.  

Gita Wirjawan, founder of Jakarta-based private equity firm PT Ancora Investment Capital Management, said Indonesia was insulated from the worst of the global economic downturn because of its relatively small export sector. This, along with the country’s mineral resources, made it an attractive investment destination for oil-rich countries. 

“Compared with other countries, we are less dependent on exports. So if you had money, what would you do? It would be better to pour it into this country than an [export-led country] where growth is going to contract,” Gita said. “Don’t forget — investors from Qatar, Abu Dhabi and Saudi Arabia have already invested billions of dollars here.” 

However, Eric Sugandhi, an economist at Standard Chartered Bank, cautioned that inward investment would probably not substantially offset the impact of the global slump. 

“I applaud [the Wief] for the investments, but they won’t come into play until around the second half or early next year.”

PLN Gets $378m in Syndicated Loans

The Jakarta Globe, Muhammad Al Azari & Mita Valina Liem, January 31, 2009

State electricity firm PT Perusahaan Listrik Negara said on Friday that it has secured syndicated loans worth about Rp 4.3 trillion ($378.4 million) to finance the building of power plants across the country in a bid to meet the growing domestic demand for electricity. 

As part of its “fast-track” power generation program, PLN has signed three loan agreements with state and local government-owned banks, including the country’s fourth largest lender, PT Bank Negara Indonesia Tbk, PT Bank Rakyat Indonesia Tbk and local development banks, or BPDs. 

“The success of the negotiation process and the approval of a loan facility to PLN from syndicated banks show strong support from the national banks and the government [of the program],” said Fahmi Mochtar, president director of PLN. The fast-track program aims add 10,000 megawatts of coal-fired power generation by 2010. 

The loans, which will finance 85 percent of the projects, will mature in 10 years with a three-year grace period and a floating rate based on the Jakarta interbank rate, or Jibor. 

“Until now the [electricity] demand in the market is much higher than the current capacity of PLN to supply consumers,” said Gatot M. Suwondo, president director of PT Bank Negara Indonesia. 

The first agreement that PLN signed was a syndicated loan of Rp 1.1 trillion with BNI and BRI to finance a coal-fired power plant project in Tanjung Awar-Awar, East Java Province, consisting of two power plants with a 350 MW capacity each. 

The second agreement was with BRI and BPDs from districts in Jakarta, Papua, South Kalimantan and South Sumatra provinces for another Rp 1.1 trillion-worth of loans to help finance six power plants in Bangka Belitung Islands, South Kalimantan Province, and Papua Island. 

The remaining Rp 2.1 trillion will be used to construct eight power plants with the capacity to generate a total of 310 MW. The plants will be constructed in the Sulawesi, Kalimantan, Papua and Sumatra Islands. 

Bloomberg reported on Friday that PLN may cut coal buying costs by 38 percent to Rp 500,000 a ton, from around Rp 700,000 to Rp 800,000 a ton last year, due to softening energy prices. 

Last week, Jacobus Purwono, director general of electricity at the Ministry of Energy, said PLN would pay Rp 750,000 for a ton of coal. However, Jacobus said that the earlier estimated coal price was made when the oil assumption was at $80 per barrel, while the ministry is now proposing the oil assumption to be between $40 to $60. 

PLN estimates that it would consume 34 million of coal this year, about 13 percent more than last year, Nasri Sebayang, PLN’s head of primary fuels said, as quoted by Bloomberg. PLN hasn’t priced all the coal it will use, he said, without elaborating further.

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Bosowa Power Plant Project Postponed As China Development Bank Pulls Out

The Jakarta Globe, Janeman Latul, January 30, 2009

PT Bosowa Corp., the largest diversified business group in eastern Indonesia, said on Friday that it has postponed a $200 million, 250-megawatt coal-fired power plant project in South Sulawesi Province because China Development Bank was “having problems” with financing the project. 

“The current global liquidity crisis has affected the venture,” said Erwin Aksa, Bosowa’s chief executive. 

“We are struggling to find investors to finance it after the China Development Bank postponed its investment.” 

Late last year, Bosowa told the Jakarta Globe that the project — part of the government’s “fast-track” generating capacity expansion program — was going ahead, and that its main financier, the China Development Bank, was committed to it. The power plant, if constructed, will be the biggest in eastern Indonesia. 

The delay is likely to cause problems for state power utility PLN, which is targeting 10,000 MW of new generating capacity as part of the first stage of the fast-track program, which is scheduled for completion by the end of this year. All of the planned new plants are coal fired. 

Erwin said the project had to date only secured about $50 million in financing from PT Bank Rakyat Indonesia Tbk, with between $140 million and $150 million still needed. 

The plant, located in Jeneponto district, South Sulawesi, is likely to be delayed until 2011 or 2012, Erwin said. 

“Our investor postponed the project as it is struggling for liquidity and PLN is paying a very low price for the electricity, which convinced them that the project would not be viable,” Erwin said, adding that local and international commercial banks were charging high interest rates, which made it difficult for Bosowa to find other investors. 

“We’re currently looking for new investors, both local and international, although we’re still negotiating with the Chinese bank to see if we can change their minds,” Erwin said. 

Bosowa is has interests in the construction, finance and automotive sectors. The group, based in Makassar, South Sulawesi, is owned by tycoon and politician Aksa Mahmud, the brother-in-law of Vice President Jusuf Kalla. 

Erwin said he also doubted that financing for a number of other independent power projects would be finalized this year. Forty-three independent producers are currently contracted to build plants with a capacity of about 5,700 MW. A total of 44 plants are involved. 

The government plans to soon increase the tariffs paid to IPPs for the electricity they produce by up to 63 percent to encourage more investment in the sector.

Pay TV operators feeling good for 2009 despite adverse global economic conditions

The Jakarta Post, JAKARTA | Fri, 01/30/2009 11:44 AM  

Pay TV operators are confident they can increase their subscribers by between 65 to 70 percent this year to push total users to over 1 million, regardless of the global financial crisis, an industry player say. 

The optimism comes from the fact that only about 7 percent of  the potential market has been penetrated, according to pay TV subscriber operator Indovision corporate secretary Arya Mahendra Sinulingga.

“The potential market for the industry is around 10 million users, while only 700,000 of them have subscribed to pay TV. It shows that there is still a lot of market share to fight for,” Arya  said.

With the prospect of increasing the number of subscribers by 65 percent, there would be at least 1.1 million subscribers that could  be registered by the end of 2009. 

With an average fees of Rp 140,000 (US$14) per subscribers per month, the total revenue projected is around Rp 1.87 trillion.

However, the projected number of official subscribers is still smaller than those subscribing to “illegal operators.”

According to Arya, illegal operators usually subscribe to one of the pay TV industry official operator services and then re-distribute the broadcast content for cheaper fees using illegal connection wires and analog signals.

“Based on our investigations, there are around one million subscribers to illegal operators, and they are clearly visible with their cable connections on their roof-tops,”

“There are government regulations for these violations, but in practice, the authorities have yet to make enough efforts to punish the illegal operators,” he added.

Sinulinga said that another challenge the industry would face during the coming year would be the unclear anti-monopoly broadcasting regulations.

The industry saw similar  growth in subscribers from 2007 to 2008, growing from 450,000 subscribers to 700,000 in one year.

This growth was the largest in the Asian pay TV industry scene, according to the Cable and Satellite Broadcasting Association of Asia (CASBAA).

Six major companies — Indovision, First Media, IM2, Aura, Telkom Vision and Oke Vision — are participating in the country’s pay TV industry, with Indovision having the largest market share of around 480,000 subscribers (68 percent).  (hdt)

Aceh reconstruction body aims to boost

The Jakarta Post, JAKARTA | Sat, 01/31/2009 9:21 AM  

The Aceh-Nias Reconstruction and Rehabilitation Agency (BRR) has allocated part of Rp 168 billion (US$14 million) from a trust fund raised by private donors to a grassroots economy empowerment program in Gayo Lues, an area unharmed by the 2004 tsunami. 

The Reconstruction Aceh-Nias Trust Fund (RANTF), a special unit of the post-tsunami reconstruction body, have built a micro-hydro power plant in the Puteri Betung village. The plant is urgently required in six Gayo Lues villages, where local economies are desperately in need of stimulation, RANTF executive director Nazmiyah Sayuti told a media conference in Jakarta on Friday. 

“This is an environmentally-friendly project which involves the active participation of locals, especially women,” Nazmiyah said. 

The plant will also discourage local people from cutting down trees in the Mount Leuser National Park conservatory. 

State electricity company PLN failed to reach remote villages which are located near the conservation forest. 

RANTF wraps up its work Saturday having distributed funds for infrastructure projects such as schools, housing complexes and hospitals. 

Nazmiyah said the power-plant project would be managed by locals under a kampung-run business, so sustainability was not an issue. 

She said local people had helped build the plant and therefore were entitled to the facility as “rightful owners”. 

With the departure of the RANTF imminent, the Institute for People-Friendly Economies (IBEKA), which assisted RANTF with the project, will continue to guide locals over the next five years to ensure they can independently manage the plant. 

IBEKA executive director Tri Mumpuni Iskandar said the facility would provide a considerable amount of income to the Puteri Beliung village. 

“The plant will supply electricity to five neighboring villages, with each family paying around Rp 100,000 per month. In total, around Rp 125 million per month will be generated from this plant.” 

Aside from the direct income, electricity is expected to also boost productivity in small-scale businesses, especially in the dried candlenuts, dried cocoa and distilled patchouli industries.

“It took the home industry days to process these products, but it now only requires a few hours,” Tri Mumpuni said. 

Nazmiyah said the project would serve as a model of development for the rest of the country.

Despite positive projections for the area, locals have expressed concern the local government will take control of the plant. 

“We do not want the regent to take the power plant away from us,” Syamsudin Lubis, a villager currently working at the facility, said. 

Village development programs have been providing funding for projects in areas such as Papua and Aceh, which enjoy special autonomy status, for several years. (dis)

Semen Gresik cements expansion drive

The Jakarta Post, JAKARTA | Sat, 01/31/2009 9:54 AM  

Publicly listed PT Semen Gresik has named Credit Suisse Group AG to advise the country’s largest state enterprise cement producer on its overseas acquisition plans. 

President director Dwi Soetjipto told reporters Friday after a shareholders’ meeting that Credit Suisse would come up with a decision, over whether the company should go ahead with its overseas expansion plans, in about one month. 

“We have hired a financial advisor, which is Credit Suisse, to study this plan,” Dwi said.

The expansion plan, initially covering countries in Southeast Asia, is part of the company’s long-term strategy to explore potential overseas markets, having long been  the leader in domestic cement production with a 44 percent market share. 

Moreover, a boost in overseas demand would help make up for the slower growth in domestic demand this year due to the global economic downturn. 

Chalil Hassan, Semen Gresik finance director, said national demand would likely increase at the rate of 3 to 4 percent, less than around 7 percent last year, but still supported by the government’s intensified infrastructure projects. 

Semen Gresik produced 18.2 million tons of cement last year, 8.6 percent higher than 2007, with this year’s output likely to be about the same. Of last year’s output, only about 1 million tons were exported. 

Friday’s shareholders meeting approved the management’s plan to spend US$1.4 billion between 2009 and 2012 in capital expenditure, including the construction of two factories and a power plant. 

Of the total capital expenditure, around 30 percent would be spent this year, Dwi said. 

Dwi has said that out of around $371 million to be spent this year, the firm will use up to Rp 2.5 trillion ($227 million) of internal cash to finance expansion, as loans have become harder to come by in the current economic conditions. 

For 2009, other capital expenditure would be allocated to plant optimization ($49 million), capacity expansion ($203 million), power plants ($23 million), corporate restructuring ($10 million), equipment replacement ($20 million) and other items (47 million). 

The company is 51 percent owned by the government, 24.9 percent by the public and 24.1 percent by Blue Valley Holdings — a subsidiary of the Rajawali Group conglomerate. 

For 2008, the company may have booked a 20 percent increase in net profits from a year earlier. In the first nine months of last year, it booked Rp 1.9 trillion in net profits, more than the Rp 1.8 trillion posted in the whole of 2007.(fmb) 

Of $1.4 billion of investment, around 30 percent would be spent this year.

Textile makers ponder new markets as crisis hits

Yuli Tri Suwarni, The Jakarta Post, Bandung | Fri, 01/30/2009 1:24 PM  

Several textile and garment makers in Bandung have been forced to cut prices and lay off workers as international orders dry up amid a world sweeping financial crisis.

Some are looking for new markets outside of Europe and the United States, which have posted reduced orders.

Ade R Sudrajat, secretary of the Bonded Zone Entrepreneurs Association, said some 25 percent of its members had slashed production due to reduced orders.

The association groups 100 exporting firms in Bandung, Bekasi, Cikarang, Merak and East Java.

An electronics producer in Bandung has closed down and others have laid off up to 300 workers.

Ade, who is also manager of export/import firm Dewhirst, said she advised companies to employ efficiency measures, but urged them not to lay off workers.

She said she managed to maintain her 5,300 workers at a factory producing Marks and Spencer shirts and trousers in Rancaekek, Bandung regency with efficiency measures such as employing more workers than needed for certain tasks.

Ade also said she was looking for new orders so she could avoid resorting to layoffs.

“Despite the crisis, we have still been able to ship 200,000 shirts and trousers every week to Europe and the US,” she said

Liem Jo Ping of CV Ceika Pauli Industry said he would wait to see what course the financial crisis would take before he resorted to radical measures, adding that the present crisis differed from the 1998 Asian financial crisis. 

“Currently, buyers in Europe and the US are experiencing a shortage of orders while in 1998, exporting firms reaped huge profits because American and European buyers were not affected by the Asian crisis,” she said.

“I prefer to wait and look to new markets. I have been exporting woven clothes for 20 years and this is the first time I have found it difficult to get orders.”

Liem said her factory in Rancaekek produced 1,000 to 2,000 items of high-end woven clothes every week.

Pick me up

The Jakarta Post   |  Sat, 01/31/2009 10:02 AM  

  A container being picked up by newly installed double quay cranes operated by container port operator Jakarta International Container Terminal (JICT) at the Tanjung Priok port in Jakarta, on Friday. The new cranes, supplied by China’s Zhen Huan Port Machinery Company Ltd., will boost container handling capacity of JICT, which already has 18 cranes in place. JP/Ricky Yudhistira

Honda car sales in Indonesia up 31.2 Pct

Jakarta (ANTARA News) - Honda car sales in Indonesia increased 31.2 percent to 52,500 units in the January - December 2008 period compared to the same period in 2007 when sales stood at 40,000 units, the Japanese car maker`s affiliate said in a press statement on Friday. 

PT Honda Prospect Motor (HPM), the sole agent for Honda in Indonesia, said that sales of Honda cars in 2008 increased by 12,500 units from the figure in 2007. 

With the sales achievement, Honda controlled 8.6 percent of the market in Indonesia and ranked fifth in the car market in Indonesia after Toyota (34.8 percent), Mitsubishi (14.4 percent), Daihatsu (12.8 percent) and Suzuki (12 percent). 

HPN`s Marketing and After-Sales Service Director Jonfis Fandy said the achievement in the car sales which reached 52,500 units in 2008 exceeded the initial target of 51,000 units. 

"Honda retail sales in 2008 reached 52,251 units, which is the highest sale proceeds in its business operation history in Indonesia," he said. 

He said that his company would continue to carry out innovations and introduce quality, fuel-efficient and environment-friendly new products. The company will also give a priority to after-sales services and expand Honda`s dealer networks in Indonesia.

Police launch Quick Wins program fix image

The Jakarta Post | Fri, 01/30/2009 9:03 PM  

The National Police, which was recently dubbed the most corrupt state institution by Transparency International Indonesia, launched Friday an internal bureaucratic program aimed at improving its services and transparency. 

The program, called Quick Wins, is set to quicken police response time to calls from the public, as well as to boost transparency in criminal investigations and the application process for documents such as drivers licenses and vehicle ownership papers. 

The program also aims to make the recruitment process for new police officers, currently viewed as plagued by bribery and nepotism, more transparent. 

"I know it is not at all easy to implement this program, but I can say that we are committed to doing it," National Police Chief General Bambang Hendarso Danuri said in a speech during the launch of the program. 

He said Quick Wins was part of a series of National Police bureaucratic reform programs first established in 1999, which cover the evaluation of the institution's work performance, organizational structure reform, renumeration system management and work culture reform. 

After delivering the speech, Bambang signed a "bureaucratic reform performance contract" with chiefs of provincial police offices across the country, represented by the Police Chief of Jakarta and Banten. 

As part of the Quick Wins program, Bambang said police officers in Jakarta, Banten and West Java would be equipped with a total of 800 minivans for mobile service units, which would be sent to safeguard places known as being prone to crime. 

He said the Jakarta police office had received 200 minivans. 

In regards to transparency in criminal investigations, Bambang promised the police would allow the public to access information on the development of their cases either through letters or online media. 

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Riau Airlines makes maiden flight to Jakarta

The Jakarta Post | Thu, 01/29/2009 10:12 PM  

Riau Airlines (RAL), owned by the Raiu provincial government will introduce Friday two Avro RJ100 aircraft to serve the Pekanbaru-Jakarta route, a Riau provincial officer said Thursday. 

"RAL will debut tomorrow," Riau provincial spokesman, Zulkarnain, said, as quoted by the Antara news agency. 

Zulkarnain added that Riau province governor Rusli Zainal would officiate the debut of the Pekanbaru-Jakarta-Pekanbaru route. 

He added that the British-made 100-seater planes would fly twice daily from Pekanbaru's Sultan Syarif Kasim Airport to Tangerang's Soekarno-Hatta International Airport.(amr)

Antam rushes for gold mines

Ika Krismantari, The Jakarta Post, Jakarta | Fri, 01/30/2009 2:15 PM  

State-run mining company PT Aneka Tambang (Antam) is intensifying efforts to jack up its gold output by securing more gold mines.

As a slump in global nickel prices has cost the publicly listed mining company dearly, it is seeking to gain control of Martabe gold mine in North Sumatra from its partner Australian-based Oxiana Limited.

Antam president director Alwin Syah Loebis said on Thursday Antam was seeking more than a 50 percent stake in the project, which has a resource base of 6 million ounces of gold and 60 million ounces of silver in a 2,563 square-kilometer area.

Martabe is owned by PT Agincourt Resources, in which Oxiana holds a majority interest.

“Under earlier arrangements, we have secured a 10 percent stake in the project, however we want to increase it,” Alwin said.

Under a memorandum of understanding signed in April last year, Antam had purchased a 10 percent stake in the Martabe project for US$66.5 million, and had an option to acquire a further 10 percent for another US$66.5 million.

The new price, however, is subject to an adjustment based on fluctuations in the gold and silver prices.

“We want to take a majority in the project should the price be attractive and suitable with our budget,” Alwin said, refusing to give figures.

He said Antam had logged the offer to Oxiana, but had no reply yet.

With the acquisition, Antam is expected to be able to reduce its dependency on the nickel business, which accounted for 73 percent of revenue during the first nine months of last year, while the remaining 23 percent was contributed by gold and 4 percent by bauxite and iron ore.

Antam’s revenue slumped by 8 percent to Rp 7.57 trillion ($670 million) in the first nine months of last year as against Rp 8.27 trillion in the same period of 2007 due to the plunge in nickel prices affected by the global economic slowdown.

The company signed on Thursday a memorandum of understanding with the Central Kalimantan administration to develop untapped mineral resources in the province, including high-grade coal, iron ore and bauxite.

Alwin said Antam had budgeted Rp 140 billion this year for exploration, and Rp 3.04 trillion for capital expenditure, up by 301 percent from Rp 758 billion in 2008.

The company expects to produce 12,000 tons of ferronickel this year, down from 17,000 tons in 2008 on declining demand and prices.

Due to difficulties in securing mining concessions, Antam only forecast bauxite and gold output to reach 1 million tons and 2.9 million tons, respectively. The figure is similar to last year’s.

Global Industries lands US$75m pipeline repair contract offshore Indonesia

29-JAN-2009 Intellasia | Rigzone, Jan 29, 2009 - 7:00:00 AM 

Global Industries' wholly owned subsidiary, PT Global Industries Asia Pacific Pte., Ltd, has entered into a contract with PT Transportasi Gas Indonesia (Transgasindo) to provide the replacement and zero downtime repair of a 28" pipeline offshore Indonesia. 

The contract is valued at approximately US$75 million and is scheduled to commence in February 2009, with a scheduled completion date of April 2009. 

Global will be utilising its pipelay barge Comanche, assisted by additional support vessels, to install a new 23 kilometres section at KP 110-KP 133 Kuala Tungkal --Panaran, Grissik-Singapore Pipeline. The project also includes a total of eight hot tap installations to tie the new pipeline to the existing pipeline. The repair is to be carried out without interruption of the gas flow. The pipeline is of strategic importance to both Indonesia and Singapore as it is a major source of gas supply to Singapore. 

John Clerico, Global's Chair and Chief Executive Officer, stated, "The award of this contract supports our long-term commitment to the Asia Pacific region and we appreciate Transgasindo's confidence in Global's ability to deliver their project within the required schedule."

Papua Officials Seek BRR Development Aid

The Jakarta Globe, Putri Prameshwari, January 29, 2009 

Authorities in Papua Province hope to learn how to develop the vast province by taking cues from the Aceh-Nias Reconstruction and Rehabilitation Agency, or BRR, which has earned praise for its transparent management and procurement system, officials said on Wednesday. 

Kuntoro Mangkusubroto, BRR chairman, said Papua Governor Barnabas Suebu had expressed interest in learning about the methods the BRR used to rebuild Aceh after the provincial capital, Banda Aceh, and the province’s western coastline were devastated by the Indian Ocean tsunami in December 2004. 

“We are ready to help Papua and other disaster-prone parts of Indonesia,” Kuntoro told a panel discussion hosted by the Jakarta Foreign Correspondents Club. 

Agus Sumule, an adviser to the Papua governor who is in charge of regional development, said in a telephone interview from Jayapura that the province was particularly interested in learning how to build and manage infrastructure. 

“We’d like to finish projects on time, with no corruption in the process,” Agus said. 

Papua is one of the country’s most corrupt provinces, according to Indonesian Corruption Watch. Danang Widoyoko, vice coordinator of the watchdog, said weak supervision of local governments was a key problem in Papua. “Good governance in Papua can only be achieved by strengthening law enforcement,” Danang said. 

Agus said eight officials from Papua would work out of BRR’s office in Aceh for two weeks to learn about how to manage development projects. 

On Dec. 26, 2004, a 9.1-magnitude earthquake off the west coast of Sumatra Island triggered giant waves that washed away entire villages in Aceh, killing more than 170,000 people and leaving millions more homeless. 

Three months later, an 8.6-magnitude earthquake struck the region, killing more than 1,000 people on Nias Island and destroying tens of thousands of homes. 

BRR began work in 2005 and has since rebuilt 90 percent of the homes, roads and public facilities that were destroyed. The agency, which has been praised for its work, will see its mandate expire in April. 

William Sabandar, head of BRR’s Nias chapter, said an agency team visited Papua earlier this month to run training sessions for local government officials. 

“They’re mainly interested in how to put budgets into action,” he said, adding that BRR would assist the province with governance issues, help it plan major infrastructure projects and provide guidance on a special program designed to strategically develop remote areas by granting villages Rp 100 million ($8,800) a year. 

“BRR is offering technical support for [the village program] by setting up a control mechanisms to oversee those funds,” Sabandar said. “There should be an anticorruption division within the initiative.” 

BRR also plans to share computer software it used to plan projects and ensure fiscal accountability. The agency uses online database software that has allowed the public to track its progress with reconstruction efforts in detail. 

Danang said that due to a lack of infrastructure, Papuans and even the media were not well-informed about the province’s leaders. “A district head can buy an airplane without people noticing,” he said. “But in some parts of Java, people become suspicious the second a district chief buys a new car.” 

Law enforcement agencies in Papua, Danang said, are too focused on the separatist movement there to notice corruption. Papua was granted special autonomy by the central government in 2001 as part of efforts to curb separatist unrest, but widespread corruption has hindered development, further fueling separatist sentiment. 

Heru Prasetyo, BRR’s director of donor and international relations, said any reform program in Papua would be done gradually. “It will take time, especially in more remote parts of Papua.” 

Related Article:

President Yudhoyono presents community empowerment funds to WPapua

Foreign Investors Still Interested in Bukopin

Thursday, 29 January, 2009 | 20:00 WIB 

TEMPO Interactive,  Jakarta: PT Bank Bukopin CEO Glen Glenardi said foreign investors are still attracted to Bank Bukopin to be their strategic investor. The plan is being delayed due to the economic downturn. "They are still biding their time," Glen said in Jakarta yesterday. 

Bukopin also said it was continuing with its rights issue plans, scheduled to take place during the first semester of 2009. The company will offer 20 – 30 percent of its share to the current shareholders in order to support Bukopin's business and to add the capital sufficiency ratio which is currently at 11 percent. 

According to Glen, Bukopin's rights issue was supposed to happen in 2008, targeting earnings of about Rp800 billion to Rp1 trillion. However, the unsupportive market situation forced them to cancel the plan. This year, Bukopin has targeted funds from third parties fund to increase by 20 – 30 percent from last year's Rp27 trillion. 

Besides the rights issue, Bukopin will also launch 30 micro- financial institutions in February 2009. These institutions are intended to counsel small and medium-scale businesses through cooperation with the community or through partnerships.  

EKO NOPIANSYAH

West Java aims to lure Middle Eastern tourists

Bandung, West Java (ANTARA News) - The West Java provincial government was planning to attract tourists from the Middle East to visit the province`s tourist sites, a local tourism official said. 

Chairman of the West Java Tourism and Culture Office Herdiwan said here Wednesday the province had a number of interesting tourist objects which could attract Middle Eastern tourists, such as mountains and plantation sites. 

"Middle Eastern tourists used to make Malaysia`s Bukit Bintang sites tourist destinations. Now, they are getting bored and start to have an interest in Indonesian tourist objects, especially those located in West Java," Herdiwan said adding that there would be 600 Middle Eastern tourists to visit West Java this year. 

Therefore, he said, in order to promote West Java`s tourism industry and create enjoyable tourism sites, the local government would restructure a number of its tourism sites. 

The program, Herdiwan said, would be focused on three factors, namely access to tourist sites, development of well-known tourist sites and tourism promotion campaigns. 

According to him, the West Java provincial government had put the development of tourism sites in its agenda this year. 

To that end, he added, the local government had set aside Rp 11 billion to support the plan.

Apexindo told to delist from the stock market

Ika Krismantari, The Jakarta Post, Jakarta | Thu, 01/29/2009 1:49 PM  

Publicly listed oil and gas services provider PT Apexindo Pratama Duta may soon disappear from the signboards in the Indonesia stock exchange (IDX) as the stock market authority sees the recent acquisition of the company by another publicly listed company, PT Mitra Rajasa, as being involved in a chain listing. 

A chain listing happens when the acquired company makes a revenue contribution of more than 50 percent to the purchasing company, so the acquired company has to be delisted from the bourse. 

In the Apexindo case, it has contributed 88 percent of Mitra's revenue after the acquisition, leaving Mitra with no option but to delist Apexindo, IDX president director Erry Firmansyah said Wednesday. 

"The company's management has come to us and requested suspension to be able to carry out the delisting plan," he said. "We will execute the plan as soon as possible." 

Mitra, which was once focused on the transportation business, acquired 98.14 percent of Apexindo for US$ 500 million in November last year, making it the largest integrated oil and gas services company. 

The acquisition of Apexindo has contributed significantly to Mitra's net profits which rose by a multiple of 35 times from Rp 1.6 billion (US$142,400) in January-September 2007 to Rp 58.4 billion in the same period last year. 

Apexindo announced earlier that it expects to book $55 million in net profits this year, up on the estimated $30-$40 million last year. 

Apexindo currently operates eight on-shore rigs, six off-shore rigs and an FPSO (floating production storage and offloading facility). (hwa)

CPO producers see `good' prices

The Jakarta Post, Jakarta  |  Thu, 01/29/2009 1:54 PM  

Producers of crude palm oil (CPO) expect prices to reach as high as US$600 per ton this year, betting on higher domestic sales which would help avoid oversupply in global markets, thus stabilizing the prices. 

The Indonesian Palm Oil Association (GAPKI) said Tuesday the current prices of around $550 per ton was already far better than in the slump in late last year, which saw CPO prices go as low as $400. 

"Our target is to maintain the CPO average price between US$500 and US$600 per ton this year. Last week, the price averaged US$550 per ton," GAPKI executive chairman Derom Bangun, who is also a member of the Palm Oil Research Center (PPKS) Advisory Board, said. 

"Market conditions might not be as good as they were during the boom in the first half of 2008, but they are better than the conditions when the price slumped dramatically in the second semester of last year," he added. 

Bangun said producers planned to increase domestic sales, in line with a predicted rise in production for 2009. 

"Our production target for 2009 is 20 million tons, of which around 4 to 5.5 million tons are targeted for domestic sales. However, if the government can promote the use of biodiesel more vigorously, domestic sales can be increased up to between 5 and 6.5 million tons," Bangun said. 

"With more domestic consumption, we can reduce the pressure on the international market which in turn will help to stabilize the commodity's average price." 

Last year, Indonesia produced some 18.5 millions tons of CPO, around 14.5 million of which were exported. 

Indonesia exports CPO to over 100 countries, including 15 countries in western Europe such as the Netherlands and Germany. 

CPO producers are now exploring to improve sales penetration in eastern European countries. 

"Slovakia, for example, does not have an oil refinery plant, and we can cooperate with them to supply crude palm oil to their neigboring countries," Bangun said. 

However, sales in western Europe might face a new obstacle as the EU will require CPO to be "certified and sustainable" as of 2010. 

To have the certification, CPO should pass an environment-friendly test to prove whether or not it can reduce the greenhouse gas effect, also known as greenhouse effect, by as much as 35 percent. So far, only one out of about 300 listed producers in Indonesia has passed the test. 

Further details and development on the industry will be discussed in the International Conference and Exhibition on Palm Oil on May 27.-29 in Jakarta. 

The event will feature international speakers and host over 1,000 participants and provide 150 booths for multinational companies. Delegates from Britain, Malaysia, China, India, Nigeria, Vietnam, Thailand, Singapore and Germany have confirmed their participation.(hdt)

Indonesia joins race to host 2018, 2022 World Cup

The Jakarta Post, The Associated Press, Zurich | Wed, 01/28/2009 8:47 PM  

The Indonesian football federation officially expressed interest in staging one of the tournaments to FIFA late Tuesday, becoming the sixth potential host to show interest ahead of Monday's deadline. 

England, Japan, Qatar, Russia and a joint Spain-Portugal candidacy have already declared intentions to bid. 

Other contenders including Australia, a combined Belgium-Netherlands-Luxembourg proposal, Canada, China, Mexico and the United States are expected to enter the first stage of a two-year selection process before the cutoff. 

Though its team is currently No. 14 in the FIFA world rankings, Indonesia fulfills one major requirement of hosting the world's most-watched sports event - it has a stadium capable of holding at least 80,000 spectators for th opening match and final. 

The government-owned Bung Karno Stadium in the capital Jakarta has a capacity of 88,000 and staged the 2007 Asian Cup final, when Iraq beat Saudi Arabia 1-0. 

Indonesia has previously made World Cup history. 

It became the first Asian nation to play at a World Cup, at the 138 tournament in France under its colonial name of the Dutch East Indies. The team lost 6-0 to eventual runner-up Hungary in a first-round match at Reims. 

Indonesia was quickly knocked out of qualifying for the 2010 World Cup being played in South Africa. It advanced through the Asian first round when oppoent Guam withdrew, then lost 11-1 to Syria in a two-legged series in November 2007. 

FIFA began the process of choosing the 2018 and 2022 World Cup hosts two weeks ago. It will issue official bid forms next month, which must be returned by March 16. 

Candidates capable of providing around 12 stadiums eac holding at least 40,000 fans can apply for either the 2018 or the 2022 tournament, or for both. 

FIFA said no South American country can apply for either tournament because Brazil is hosting the 2014 edition. African countries can bid only for the 2022 event because South Africa is hosting next year. 

The hosts will be chosen by FIFA's 24-man executive committee in December 2010. 

If successful, Indonesia would be the second World Cup host from Asia. The 2002 tournament was played in Japan and South Korea.

Wika Plans to Enter Asphalt Business

The Jakarta Globe, Yohanes Obor, January 28, 2009 

State-owned construction company PT Wijaya Karya Tbk, or Wika, said it plans to expand by entering the asphalt business this year and by buying a mining contracting firm. The move would make Wika the first state-owned company to enter the mining contracting sector. 

“We plan to acquire a mining contractor because right now there are no state-owned mining contractor companies,” Bintang Perbowo, Wika’s president director, said on Tuesday. 

“Private companies, most of them foreign, dominate the mining contractor business. They are involved in this business because its prospects are good.” 

He said the company would use between Rp 30 billion ($2.67 million) and Rp 40 billion from its 2009 capital expenditure budget of Rp 250 billion to finance the acquisition, but did not disclose which contractor Wika planned to acquire. 

Slamet Maryono, Wika’s operating director, said the company was also planning to become an asphalt producer this year. 

“We will cooperate with Jakarta administration-owned construction company PT Pembangunan Sarana Jaya to set up an asphalt extraction plant with our deposits of bitumen located in Buton, Southeast Sulawesi,” he said, adding that the company’s has an annual extraction capacity of 200,000 tons. 

Slamet said proven bitumen deposits in Button amounted to between 50 million and 80 million tons and could replace imports of liquid bitumen, which amount to some 600,000 tons a year. 

He added the company may also invite local mining company PT Timah Tbk to invest in the asphalt plant, which is expected to cost at least Rp 40 billion. 

Ganda Kesuma, Wika’s finance director, said that of the firm’s 2009 capital expenditure budget, some 30 percent was drawn from internal funds or equity, with the rest coming from bank loans. 

He said the company was also buying a stake in road contractor PT Marga Nujyasumo Agung, or MNA, which is involved in building the Rp 3.22 trillion Surabaya-Mojokerto toll road project. 

“Wika, together with state-owned toll road operator PT Jasa Marga, is the contractor for MNA.” Bintang said. 

“However, PT Jasa Marga and Wika are in the process of becoming the majority shareholders of MNA with a total 75 percent stake,” he added, noting that after the deal was completed Wika would have a 20 percent stake in company and Jasa Marga 55 percent. 

MNA’s work on 36 kilometers of highway linking the towns of Surabaya and Mojokerto in East Java Province was scheduled to begin in 2011. However, the company was unable to carry out the project because its investors pulled out. 

Bintang said the toll road project could become Wika’s strength in the future as it would provide stable earnings for the company over the long-term. 

He also said that PT Bank Rakyat Indonesia Tbk, PT Bank Negara Indonesia Tbk and PT Bank Bukopin are set to provide Wika with syndicated loans to facilitate its acquisition of a 20 percent stake in MNA. 

Wika earlier said it expects a net profit of Rp 175 billion in 2009, up 21.5 percent from an estimated Rp 144 billion this year, largely due to expected government contracts for infrastructure work. 

The company also expects revenue to grow by 15.6 percent to Rp 7.4 trillion next year, compared with an estimated Rp 6.4 trillion this year.

Wedgwood faces identity crisis

By James Melik, Business reporter, BBC World Service 

Despite the efforts of Irish entrepreneur Sir Anthony O'Reilly, who has been pouring money into the parent company Waterford Wedgwood for years, the future of two of Britain's most venerable tableware brands, Wedgwood and Royal Doulton, is currently in the hands of administrators.

But as operations in the UK have struggled and several hundred workers in Britain have lost their jobs, the company's plant in Indonesia has been making money and is likely to be one of the main attractions to potential buyers.

About 1,500 people work in Indonesia for Royal Doulton and Wedgwood

Rising costs in the UK means overseas plants are competitive and while there used to be 26 manufacturing sites in the UK, that figure has now been reduced to just a couple.

Some 1,500 workers are employed in a clean modern factory just outside the Indonesian capital Jakarta, where they produce between five and seven million pieces of tableware every year.

The factory has been purpose built, whereas most of the British factories were Victorian buildings and were therefore less efficient.

Relocation

Outsourcing of production to Indonesia began more than a decade ago and has been controversial in Stoke on Trent, the city in the English Midlands that was once at the centre of the pottery industry.     

Some residents of Stoke have expressed anger at the Indonesian factory and have raised questions about the conditions there.

But the director of the subsidiary points out that there is a purpose-built mosque, a canteen providing one free meal a day, a health clinic, a trade union building and a football pitch.

As for pay, production director John Wright admits they do not pay the highest wages in the area.

"But the package we've put together is a good package," he insists.

"Our labour turnover and our absence rate is nearly 1%. Generally speaking it's a reasonable environment to work in."

Cultural changes

The loss of manufacturing jobs from industrialised countries to the developing world is not new, and neither are falling sales for Waterford Wedgwood.

Expensive formal dinner sets are no longer so popular among couples getting married and in a throw-away society many people prefer cheaper, more practical china that can be replaced more easily if it gets broken.

But Wedgwood does still have its fans, notably in the United States where many cities boast Wedgwood appreciation societies.

Jeffrey Tollman is president of the Wedgwood Society of New York, and he is not surprised at the company's demise.

He believes people no longer look for substance, quality and formality.

"People have moved away from formality, even when dining out," he says.

"If you look at restaurants in Manhattan, we are down to three restaurants which require a tie and a jacket."

Antiques expert David Harper blames consumers who are "suffering from the throw-away culture in society".

"Not very long ago, people wanted to buy items of extreme quality, which you could add to when you could afford it," he says.

"It would last a lifetime, you would pass it on to your children and you'd get great pleasure and enjoyment out of it."

Loss of status

Despite its location, the brands remain quintessentially British and the huge kilns and the expertise have been imported but could tableware brands synonymous with British values and tradition survive if they came exclusively from outside the country. 

Wedgwood china has graced royal tables and wedding lists for 250 years

Mr Harper thinks the company is losing the plot by going elsewhere.

"The clays and bones from cattle for the bone china Wedgwood is famous for are indigenous to Staffordshire," he says.

He firmly believes that the product loses kudos and style and desirability when manufactured away from its original factories.

Mr Tollman agrees.

"I recently bought a Wedgwood cup made in Portugal with pictures of London on it and gave it to a friend as a joke," he says.

So whilst administrators in the UK decide what to do with Waterford Wedgwood, work in Indonesia continues.

In the meantime, people within the Wedgwood family are planning to bid for the firm and bring manufacturing back to the UK.