Rajawali to Invest in Sugar, Mining

Jakarta Globe, Reuters & Yessar Rosendar, March 31, 2010

PT Rajawali Corporation said on Wednesday it will use the $1.08 billion raised from the sale of its 23.7 percent stake in cement maker PT Semen Gresik to invest in sugar plantations and mining, possibly including BHP Billiton’s Maruwai coal mine project.

Darjoto Setyawan, Rajawali’s managing director, said the group is still interested in investing in the Maruwai coal project in Central Kalimantan.

Earlier on Wednesday, BHP Billiton said it had chosen PT Adaro Energy, Indonesia’s biggest coal miner by market value, as a local partner to help develop the Maruwai project, less than a year after it had abandoned the project. Adaro will get a 25 percent stake in Maruwai.

Darjoto said Rajawali would invest about $400 million in sugar plantations over the next four years, including in the government-led food estate in Merauke, Papua. “We plan to invest in a huge sugar plantation at Merauke,” he said. “We expect to have 70,000 hectares in the next three to four years.”

Rajawali is also planning to offer its remaining 1.25 percent stake in Semen Gresik to the government, which currently owns 51 percent of the company.

The government said it had not yet decided whether to buy the Semen Gresik shares.

“We can’t decide now. We have to study it first,” said Muhammad Said Didu, secretary at the State-Owned Enterprises Ministry.

United Nations to Help Fund REDD Program

Tempo Interactive, Wednesday, 31 March, 2010 | 15:51 WIB

TEMPO Interactive, Jakarta: The Department of Forestry and the United Nations (UN) agreed to a collaborate on a joint Reduction of Emissions from Deforestation and Degradation (REDD) project valued at US$ 5.6 million.

Through this program, the United Nations will help the Indonesian government to prepare the REDD program on a national scale. The Minister of Forestry, Zulkifli Hasan, said that this cooperation is part of the UN program to reduce emissions from deforestation and forest degradation in developing country (UN-REDD) funded by the Norwegian government.

PINGIT ARIA

RI, Australia, Unicef to enhance basic education in Papua

Antara News, Wednesday, March 31, 2010 19:18 WIB

Jakarta (ANTARA News) - A new joint partnership to enhance basic education in Papua and West Papua provinces is to be signed by the Indonesian and Australian governments and UNICEF (United Nations Children`s Fund).

"Australia is very pleased to extend its support to education in Papua and West Papua with UNICEF through this program," said Australian Ambassador to Indonesia Bill Farmer said ahead of the agreement`s signing, according to a press statement from the Australian Embassy on Wednesday.

Australia will contribute seven million Australian dollars (58.9 billion US dollars) to UNICEF for the next two years to support the two provinces in order to more quickly achieve universal primary education.

Ambassador Farmer said that the program will give kids, who are in poor and remote areas in Indonesia, a better opportunity to receive quality education."

The Director General of Primary and Secondary Education Management at the Ministry of National Education, Professor Suyanto said that the program is committed to ensure Indonesian children have the best possible education, including in Papua and West Papua.

Besides, the program also supported the local governments to improve planning and management of human resources as an important effort, Suyanto said.

"Indonesia has made significant progress in achieving basic education targets. Though this country as a whole is on on the right track to achieve universal primary education, the situation varies from province to province," said UNICEF representative to Indonesia, Angela Kearney.

She also said that UNICEF was committed to supporting Indonesia to achieve its objective to ensure that all children in Indonesia have access to quality basic education.

This program will work with the two provinces to develop a strategic plan for education, and improve teaching and learning practices in more than 800 schools in six selected districts, also help to improve literacy and numeracy skills in small schools and remote areas through the provision of teacher training and learning materials.

Foreigners Can Own Property, Indonesian Government Says

Jakarta Globe, Katrina Nicholas, March 31, 2010

It's game on after the Investment Coordination Board of Indonesia announced that foreigners will be allowed to own property.

Indonesia plans to allow foreigners to own property in the country and has completed its review of investment rules under the so-called negative list, the country’s investment coordination agency said on Wednesday.

The country will deregulate its property industry by the end of the first half, paving the way for foreigners to buy homes and commercial real estate directly, Gita Wirjawan, chairman of the Investment Coordination Board of Indonesia, said in Jakarta. The move will “unleash value,” he said.

Indonesia has been reviewing a 2007 presidential decree known as the “negative investment list,” which limits overseas ownership in companies. The new rules may include changes in the cap on foreign stakes in some industries, and a provision that companies whose shares are traded on the exchange are excluded from the regulation, the investment agency said in July.

A draft of the revised investment rules is with President Susilo Bambang Yudhoyono, Wirjawan said at a forum on Indonesia’s investment climate. He said he sees no reason why Indonesia’s credit ratings won’t rise to investment grade in the next 18 months.

Standard and Poor’s raised the country’s sovereign credit rating to a 12-year high of BB from BB- on March 12, prompting investors such as Cornel Bruhin at Clariden Leu AG in Zurich to predict more upgrades by rating companies in the coming months. The SandP rating, which has a positive outlook, is two levels below investment grade.

Moody’s Investors Service in September raised the country’s sovereign debt ratings one level to Ba2, the highest level in 11 years. Fitch Ratings on Jan. 25 raised Indonesia‚Äôs credit rating to BB+, one level below investment grade.

Bloomberg

$1.6 million in grants for geothermal projects

Alfian , The Jakarta Post, Jakarta | Wed, 03/31/2010 10:48 AM

The US Trade and Development Agency (USTDA) has committed US$1.6 million in grants for feasibility studies for two private geothermal projects in West Java and Halmahera.

The commitment was signed by USTDA’s director Leocadia I. Zak on Tuesday, the US Embassy said in a press statement.

“USTDA is pleased to announce that over $1.6 million is being committed to help Indonesia draw upon its extensive geothermal reserves. We hope that the US-Indonesia Geothermal Energy Initiative will be the start of a strong commercial relationship between the US and Indonesia.” Zak said.

Of the total grant commitment, as much as $732,722 is granted to PT Star Energy Geothermal Halmahera which will use the funds for a feasibility study for the 370 megawatt s(MW) Jailolo Geothermal Power Plant in Halmahera. Los Angeles-based engineering and management company AECOM USA has been selected for the feasibility study.

The project in total could cost over $110 million.

A second grant amounting to $934,308 was awarded to PT Indonesia Power to fund the feasibility study for the 300 MW Tangkuban Perahu geothermal power project in West Java. The study will be done by Indonesia Power and Utah-based Raser Technologies. Raser Technologies will do the feasibility study and share costs. Indonesia is believed to hold 28,100 MW of geothermal potential, but only about 1,200 MW of this has been tapped.

The government expects to utilize more geothermal energy in the second phase of the 10,000 MW electricity crash program, to be implemented between 2010 and 2014. The project is expected to generate up to 10,153 MW in total and as much as 39 percent is expected to be generated from geothermal energy.

Murtaqi Syamsuddin, a business and risk management director at state electricity firm PT Perusahaan Listrik Negara (PLN), said the development of geothermal power plants included high risks especially during the exploration stage. He added that PLN now was discussing the possibility to insure the exploration activities of the geothermal projects.

“The study will help provide certainty for the geothermal developers,” Murtaqi said.

Govt to build Rp 800b dam in E. Java

The Jakarta Post, Jakarta, Tue, 03/30/2010 10:13 PM

The government has planned to build a Rp 800 billion [US$88 million] dam named Bendung Gerak Sembayat in Bengawan Solo river, located between Lamongan and Gresik of East Java, says a minister.

“The proposal plan [of the dam construction] has been approved,” Public Works Minister Djoko Kirmanto said Tuesday during his visit to Lamongan as quoted by tempointeraktif.com.

Djoko said the dam would be built immediately to counter floods during rainy season.

The government is seeking foreign investors to support the project, he added.

Solo Batik Carnival to be held in Netherlands

Tempo Interactive, Tuesday, 30 March, 2010 | 17:42 WIB

TEMPO Interactive, Surakarta: The Surakarta Cultural Office will send six members of the Solo Batik Carnival to The Hague, Netherlands, today. They have been invited by the Embassy of Indonesia in the Netherlands to perform at the Indonesia Night Market event, to be held in early April in The Hague. “All expenses will be paid by the Foreign Ministry,” said the Head of the Surakarta Cultural Office, Purnomo Subagyo, yesterday. The costumes to be worn in the performances have the sekar jagat motif. According to Subagyo, the motif is varied and lively, appropriate for a costume party.

Similar costumes have been worn at the Chingai Festival in Singapore, last February. According to Purnomo, the six persons selected are among Solo Batik Carnival participants in Singapore. He hoped that by sending these cultural ambassadors, Surakarta’s tourism image in the Netherlands can improve. “Moreover, Indonesia is quite well known in the country,” said Purnomo. The performers will be given travel brochures on this year’s Surakarta cultural agenda to be distributed in The Netherlands. The Indonesia Night Market is held by the Indonesian Embassy and the Indonesian community living in the Netherlands. The event will exhibit various Indonesian cultural attractions.

AHMAD RAFIQ

Pasar Malam Indonesia, The Hague

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Korea’s Doosan eyes railway project in South Sumatra

Nani Afrida, The Jakarta Post, Jakarta | Tue, 03/30/2010 7:24 PM

South Korean-based company Doosan Engineering & Construction is interested in investing in double track railway construction in South Sumatra to transport coal, an official told reporters in Jakarta on Tuesday.

“We have met Doosan. The company is interested in constructing a double track railway in South Sumatra,” said Tundjung Inderawan, the transportation ministry’s director general for trains.

The railway track, Tundjung said, would be part of a distribution line for coal produced by state owned PT Bukit Asam.

“There is no feasibility study yet as we are still discussing the plan,” he said.

Tundjung said the company was also looking for a local partner for the upcoming investment. He said that railway operator PT Kereta Api and state owned train company PT Inka were the most probable partners for Doosan.

“I think it is okay to construct double track besides the existing track that belong to Kereta Api, because the Bukit Asam president director has told me that coal production will be increased as long as the railway transportation is available,” he said.

Bukit Asam plans to produce 14 million tons of coal this year up from 11.6 million tons in 2009, and states that its output can grow in line with improvements in the railway system for transporting coal.

Medco Energi to Invest $1.7b in Projects by 2014

Jakarta Globe, Muklis Ali, March 30, 2010

Energy company PT Medco Energi Inter national plans to invest $1.7 billion between 2010 and 2014 in several major projects, including oil development in Libya, a company official said.

Medco Energi’s Area 47 oil project in Libya is expected to produce between 50,000 and 100,000 barrels per day and is due to start production in 2014.

“We are waiting for approval from the Libyan government for commercialization of the Area 47 block. We will fund the project with a loan of about $200 million,” Medco president director Darmoyo Doyoatmojo said late on Monday.

“Medco will also apply to the Libyan government to operate the Area 47 project.”

Darmoyo said the company was still optimistic that its liquefied natural gas project in Sulawesi would go ahead in 2014 despite issues over where the gas would be sold and whether the project would be economical.

Medco, together with state oil firm PT Pertamina and Japan’s Mitsubishi, had agreed previously to build the Donggi-Senoro LNG plant in Sulawesi, with a capacity of 2 million metric tons per year. The government wants the gas to be sold only to the domestic market, whereas the partners want to export LNG, which they say is essential if the project is to be profitable.

“This project will provide benefits not only for the companies involved but also for the government,” Darmoyo said.

Other Medco projects are the Sarulla geothermal power plant in North Sumatra, with capacity of 330 megawatts, expected to start operations in 2014, and the Block A gas field in Aceh.

Darmoyo said the Block A project would supply a fertilizer firm in Aceh and was waiting for approval by the governor.

Reuters

Obama`s science envoy to visit RI in May: US Envoy

Antara News, Tuesday, March 30, 2010 16:19 WIB

Jakarta (ANTARA News) - US President Barack Obama will send a science envoy to Indonesia next May, according to US Ambassador to Indonesia Cameron R. Hume.

"President Obama`s Science Envoy will visit Indonesia in May. We are eager to begin joint activities," Hume said here on Monday after the signing of a bilateral agreement on scientific and technological cooperation between the United States of America and the Republic of Indonesia.

The agreement was signed by Ambassador Hume and Research and Technology Minister Suharna Surapranata, according to information on the official website of the US embassy in Jakarta.

Ambassador Hume said President Obama has called for new partnerships around the world based on mutual respect, mutual interest, and mutual responsibility; a shared commitment to universal values, and comprehensive engagement with governments and citizens alike.

"Together we can address global challenges," the Ambassador said.

The bilateral framework agreement will strengthen and promote scientific research and technological cooperation and will be based on shared responsibilities, equitable contributions and benefits.

The agreement enhances the scientific and technological capabilities, broadens and expands relations between the scientific communities of both countries.

Cooperation under this agreement could include exchange of scientific and technological experts, information, and best practices; joint research projects; joint seminars, meetings and workshops; and the development of direct cooperation between government agencies, universities, and other entities of the two countries.

The United States and Indonesia have a long history of scientific exchange and collaboration that continues today. The previous Agreement for Cooperation in Scientific Research and Technological Development between the United States and Indonesia was signed in 1992 but expired in 2002.

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South Korea and Indonesia Reinforce Cooperation

Tempo Interactive, Monday, 29 March, 2010 | 14:17 WIB

TEMPO Interactive, Seoul: The Coordinating Minister for the Economy, Hatta Rajasa, said that trade between South Korea and Indonesia will be reinforced after quite a deep slump caused by the global financial crisis. The total trade between both countries amounted to US$ 16 billion in 2008. But, because of the crisis, it declined to US$ 13 billion the following year.

Korean investment in Indonesia has also been increasing. From 2000-2004, Korean investment was ranked eighth from 10 countries with a value of US$ 596 million covering 287 projects. But from 2005 to 2009, Korea is ranked fifth with an investment value of US$ 2,46 billion covering 774 projects.

This was reported by Hatta in the closing session of the South Korea-Indonesia Task Force meeting in Seoul, South Korea, last weekend. Korea, according to Hatta, is one of Indonesia’s main business partners. “This year, if possible, investment can increase to 2008 levels,” said Hatta after the meeting held on March 25 and 26.

The Deputy Minister for Transportation, Bambang Susantono, who is part of the delegation, said that the government needs a huge capital for several sectors, especially electricity and infrastructure. In the power sector, for example, Indonesia needs 320 terawatt/hour until 2018 to build electricity generators in Java.

“Because of the big capacity, Indonesia needs new investment in the electricity sector,” said Bambang. He added that the power plant project with a total capacity of 10.000 MW is ongoing. The project needs an investment of US$ 1-1.2 billion per MW.

Besides electricity, the infrastructure sector also needs new investment. With a growth of 58 vehicles per kilometer in 2008, about 47 percent of Indonesian citizens spend 20 percent of their revenue for transportation.

The South Korea Chamber of Trade and Industry chairman, Khyung Shik-Sohn said that Korean entrepreneurs needsbusiness forum such as this is to choose the best industry offered by Indonesia. “We are looking (for new investment). Infrastructure and energy sectors are very attractive,” he said.

Bambang said that the Korean government promised to extend soft loans for infrastructure projects in Indonesia. “From around US$ 370 million promised, only US$ 82 million have been realized," said Bambang.

The Korea Exim Bank and Korea Expressway Corporation are still conducting feasibility studies on a plan to construct the Solo (Central Java) – Kertosono (East Java) highway. The 177 kilometer project with a value of US$ 380 million will be implemented by private companies and the government.

“The Korea Exim Bank and the Korea Expressway continue to conduct negotiations,” said the Director General of Construction Policy at the Department of Land, Transportation and Marine Affairs, Doh Tae-ho, in his presentation to the Deputy Minister of Land, Transportation and Sea, Kim Jung-han.

GRACE S. GANDHI

RI, US sign science, technology cooperation deal

The Jakarta Post, Jakarta, Mon, 03/29/2010 8:30 PM

Indonesia and the United States signed on Monday a cooperation agreement in the fields of science and technology, paving the way for an exchange of information, ideas, knowledge and skills between scientists of the two countries.

Under the cooperation agreement, all Indonesian scientists will be able to continue existing cooperation and embark on new cooperation with their US counterparts, Indonesian Minister of Research and Technology Suharna Surapranata was quoted by Antara after signing the agreement with US Ambassador to Indonesia Cameron Hume.

The deal covers 23 fields, including science and technology, agriculture and biotechnology, medical and biomedical sciences, food security, marine research, energy, information and communication technology, aerospace, environment, forestry and biodiversity.

Suharna underlined that the agreement was based on the principles of equality and was aimed at supporting the development of national science and technology.

Indonesia and the US began their science and technology cooperation in 1978 and extended the cooperation until 2002, he said.

It was not until 2008 the two countries realized the importance of renewing the cooperation, he said.

Ambassador Hume said the US hoped the cooperation to help Indonesia grow as its strong partner.

Bakrieland to build Disneyland in Sukabumi

The Jakarta Post, Mon, 03/29/2010 1:35 PM

PT Bakrieland Development is planning to expand its entertainment and recreational properties by building a Disneyland park, following the development of its Jungle Water Park at the Lido tourism spot in Sukabumi, West Java.

The American-based Disneyland project plan is in line with Bakrie’s 54-kilometer toll road project that will connect Ciawi and Sukabumi, kompas.com reported Monday

Bakrieland president director Hiramsyah S. Thaib, however, declined to elaborate on the proposed Disneyland project.

Lampung’s geothermal plant ready for auction

Oyos Saroso H.N., The Jakarta Post, Bandarlampung | Mon, 03/29/2010 10:06 AM

The West Lampung administration plans to auction the management of the Suoh-Sekincau geothermal power plant next month to help solve energy shortages in the province, says an official.

Regent Mukhlis Basrim said that the power plant was ready for auction following the decision from the Energy and Mineral Resources Ministry allowing it to be mined.

“With the additional energy supply expected to be generated from the site, hopefully Lampung’s energy crisis will come to an end,” Mukhlis said.

Covering an area of 33,333 hectares, the geothermal site comprises of two blocks — Suoh and Sekincau. It is estimated the blocs have the potential to generate 430 megawatts (MW) of electricity.

“That is just from one geothermal site. We have several others in West Lampung that can be exploited to help fulfill the local demand for electricity and speed up development in the region,” Mukhlis said.

Data from the Lampung Energy and Mining Agency shows there are 13 geothermal sites in Lampung, with a combined potential of 2,945 MW of electricity.

Lampung has the country’s third-largest geothermal potential.

Of the combined potential, more than 800 MW are ready to be developed.

They include Ranau Lake in West Lampung (183 MW), Mt. Sekincau (West Lampung, 100 MW), Suoh Antata (West Lampung, 163 MW), Ulu Belu (Tanggamus regency, 156 MW), and Way Ratai and Kalianda (South Lampung, 194 MW and 40 MW respectively).

He said his administration had signed a memorandum of understanding with the management of the Bukit Barisan Selatan National Park (TNBBS) following the central government’s decision to allow the Suoh-Sekincau blocks to be mined.

Lampung Governor Sjachroedin Z.P., said that his administration would keep pushing the regencies to develop geothermal energy.

The move, he said, aimed to ensure that all subdistricts in the province would have electricity in the next three years.

Currently, out of 2,331 subdistricts in Lampung, only 1,533 have electricity networks.

In an effort to reach the target sooner, Sjachroedin said his administration had also been developing micro-hydro power plants in a number of areas across the province, including the Mt. Betung micro-hydro plant.

Electricity shortages have increased in Lampung for the last three years.

With an average demand of 442 MW, it can only produce 325. The remainder is supplemented by the Sumatra interconnection.

The PLTA Batutegi hydroelectric power plant in Tanggamus (90 MW) and the PLTA Way Besai plant (45 MW) in West Lampung, are designated as the main suppliers of electricity for state electricity company PLN, but the plants have been unable to produce enough electricity due to water shortages.

To deal with the problem, PLN is currently developing a number of power plants, including steam-powered electric generators in South Lampung.

State-owned Enterprises Invited to Manage Middle East Projects

Tempo Interactive, Saturday, 27 March, 2010 | 09:38 WIB

TEMPO Interactive, Jakarta:State-owned Enterprises Minister Mustafa Abubakar said his office has invited state-owned enterprises to meet with Iraqi and Jordanian businessmen who offered business in the construction sector. “I invited them for a business-to-business meeting,” Mustafa said in Jakarta yesterday.

Among the state-owned enterprises invited were PT Wijaya Karya, PT Adi Karya, and PT Pembangunan Perumahan. With regards to the financial loss suffered in the Middle East, Mustafa said state-owned enterprises have learned a lot from their experience. “They have learned their lesson and will not let it happen again,” he said.

The investments offered included projects in road, housing, and building construction in post-war Iraq. The collaboration would be in the form of a partnership or a possible joint-venture. The investment value is high although Mustafa does not know the exact figures. “We have not talked about numbers yet,” he said.

PUTI NOVIYANDA

Jakarta launches Transjakarta website, SMS center

The Jakarta Post | Sun, 03/28/2010 1:33 PM

The Jakarta administration on Sunday launched the Transjakarta busway website, www.transjakarta.co.id, to provide passengers with information related to its services.

“The website provides a complete map of the Transjakarta busway routes and updated information in relation to bus services. If you need any information about Transjakarta, just click on the website,” Jakarta administration officer Rina Suryani said, on the sidelines of “Jakarta Great Clean 2010” event, as quoted by kompas.com.

Transjakarta also launched a short message service [SMS] center 9250 for customers’ queries or complaints.

Int'l Involvement in Breeding Rhinoceros in Indonesia

Kompas.com, Sabtu, 27 Maret 2010 | 08:46 WIB

Indian Rhinoceros

PANDEGLANG, KOMPAS.com - The International Rhino Foundation (IRF) in cooperation with an Indonesian counterpart is to establish a Javanese rhinoceros breeding center near the southern foot of Mount Honja in the Ujungkulon Natonal Park, Banten.

"IRF has stated its preparedness to fund the project which is to be implemented in collaboration with the Indonesian Rhino Foundation (YABI)," the park’s chief, Agus Priambudi, said here Friday.

Preparations to carry out the project had already started, and when the 4,000-hectare reserve was completed, it would be dedicated by Banten Governor Ratu Atut Chosiyah. If everything went well, work to build the center would begin later this year, he said, adding the area would then also serve as a wild life park.

He said the Javanese rhinoceros (rhinoceros sondaicus) population in the Ujung Kulon National Park in Pandeglang district now stood at 50 head. The number had remained relatively small because the animal was multiplying at a slow rate with most of them being studs.

So far, the one-horn rhinoceros in the park had never been killed by hunters and when dead rhinos were found, they proved to have died because of their advanced age or by an illness. The average Javanese rhino had a maximum life span of 40 years which was quite high among animals.

He said the park authority in cooperation with other parties including the World Wildlife Fund (WWF) was conducting periodic head counts on the rhino population.

Govt earmarks Rp 800b for infrastructure in disadvantaged regions

The Jakarta Post, Antara, Pontianak| Sat, 03/27/2010 6:14 PM

Disadvantaged Regions Development Minister Helmy Faisal Zani said his office has allocated Rp 800 billion (US$88 million) in funds for infrastructure development in 147 regions.

"The disadvantaged regions need such an affirmative policy," said Helmy in Pontianak, West Kalimantan, on Saturday.

The minister said his office had initiated several programs for development in disadvantaged regions. They covered electricity provision and road construction.

During the visit, Helmy and Health Minister Endang Rahayu Sedyaningsih signed a Memorandum of Understanding (MoU) on a cooperation to enhance health services in remote and border areas and islands.

He said 26 out of a total of 37 regencies or cities in Indonesian border areas were categorized as disadvantaged regions. Such a condition is quite ironic as border areas function as Indonesia's front gate, he said.

"Development in remote areas is needed to accelerate the eradication of poverty there," he said.

‘Mosaic system’ proposed for plantations

Adianto P. Simamora, The Jakarta Post, Jakarta | Fri, 03/26/2010 9:27 PM

Forestry Minister Zulkifli Hasan has asked oil palm plantation companies to adopt mosaic systems to help maintain biodiversity in plantations, and to address mounting criticism of the industry over environmental concerns.

Minister Zulkilfli sent a letter to Agriculture Minister Suswono in February asking for the development of the mosaic system, requiring companies to maintain areas of original vegetation of high conservation value.

Forestry Ministry Forest Production Director General Hadi Daryanto said the ideal percentage of plantation on plots of land was around 70 percent.

“The remaining area should be set aside for, among others, the protection of biodiversity. We want both [the forestry and agriculture] ministers to have one voice in responding to protests on environmental issues from the international community,” he told The Jakarta Post on Friday.

Zulkilfli said the mosaic pattern system, which had been adopted in industrial forest plantations, could also minimize diseases that thrive in monoculture plantations.

India’s Essar Group Buys Aries Mines in Indonesia

Jakarta Globe, Dinakar Sethuraman, March 26, 2010

India’s Essar Group has agreed to buy the Aries coal mines in Indonesia to secure supplies for its power plants.

The mines, which hold as much as 100 million metric tons of power-station coal, are in the Kutai region of East Kalimantan.

The transaction is expected to be finalised in April and production could start within a year, Essar said in an e-mailed statement, without giving a value for the purchase.

Essar joins Indian utilities including Tata Power and Reliance Power in securing coal assets overseas to supply surging power consumption in the world’s second-fastest growing major economy. More than half of India’s electricity generation is coal-fired, according to the power ministry’s Web site.

“This acquisition adds another 100 million tons to our existing thermal coal resource base of about 275 million tons in India,” Anshuman Ruia, the group’s director, said in the statement.

Extractable reserves from the Aries mines were 64 million tons, the company said.

Essar Power Ltd. is building six power projects in India and will increase generation capacity to 6,100 megawatts by 2012 from 1,220 megawatts.

India’s thermal coal imports almost doubled last year to about 60 million tons from 2008, the Macquarie Group has said.

The Essar Group bought West Virginia-based Trinity Coal Corp. for $600 million to help lock in raw materials for steel plants, adding 200 million tons of coal reserves to Essar’s portfolio, chief executive officer Prashant Ruia said on March 6.

Essar, which is owned by Indian billionaires Shashi and Ravi Ruia, plans to raise $3 billion overseas to fund acquisitions, two people familiar with the matter said this month.

Tata Power, India’s largest non-state electricity generator, agreed to pay $1.3 billion in March 2007 to buy a 30 percent stake in two Indonesian coal mines owned by PT Bumi Resources. Reliance Power, controlled by billionaire Anil Ambani, bought three coal mines in Indonesia in 2008.

GMR Group bought Indonesia coal mining company PT Barasentosa Lestari last year.

Come clean

Indah Setiawati, The Jakarta Post, Jakarta | Fri, 03/26/2010 5:35 PM | Jakarta

Come clean: Jakarta government employees hang two containers carrying 20 cubic meters of garbage in front of the National Monument in Central Jakarta. The display marked the launch of jakartabersih.com to promote a clean city by Governor Fauzi Bowo on Friday. - JP/Indah Setiawati

Govt prepares Rp 1.2t for railway revitalization

Eny Wulandari, The Jakarta Post, Jakarta | Fri, 03/26/2010 11:10 AM

The government has prepared budget of Rp 1.2 trillion (US$131.6 million) to relocate squatters living next to three major railway stations in Jakarta, with some to be returned to their regions of origin, in a bid to restore the facilities.

The government has chosen three stations — Tanjung Priok in North Jakarta, Kota in West Jakarta and Senen in Central Jakarta — in its pilot project to clean up slum areas around the stations. As of last year, around 4,000 families resided at the stations.

Coordinating People’s Welfare Minister Agung Laksono told a press briefing on Thursday that the budget for the moves would come from the 2010 and 2011 state budget allocations. This money would mainly be used to build low-cost rental apartments (rusunawa) for the squatters and to construct fences and parks around the stations.

It was not immediately clear when the apartment development projects would begin, nor the locations, but Agung said “we expect the relocation and revitalization programs at those stations will be completed by 2011. If they are successful we will continue in other provinces.”

Deputy Governor Prijanto said the city administration would begin the relocation only once the construction of the low-cost rental apartments was complete.

Prijanto said his office had allocated Rp 10 billion to build roads along the railway routes. “These roads will be five meters away from the tracks and will enable fire trucks to enter the area if there are fires.”

Another Rp 2 billion would be spent to build parks and waste facilities at the stations, he said.

Also present at press briefing were Public Works Minister Djoko Kirmanto, Social Services Minister Salim Segaf Al Jufrie and State Public Housing Minister Suharso Monoarfa.

Around 1,000 mahogany seedlings were planted around the three stations during the event.

“The stations [had no squatters] when we visited them last year. But now, we see the squatters have returned,” Agung said, adding that optimal efforts were needed to address the problem.

Agung said his office would coordinate with the Social Affairs Ministry, Public Works Ministry, State Public Housing Ministry and city administration to organize the slum areas.

“Those who possess Jakarta identity cards will keep on staying at the capital. But some of those lacking ID will be returned to their regions of origin,” he said.

State railway company (PT KA) Greater Jakarta spokesman Sugeng Priyono said the directorate general for railway affairs at the Transportation Ministry should build a three-meter-high fence around railway stations to prevent squatters from occupying the areas.

Sugeng said evicting the squatters was a complicated procedure that required synergy between various departments.

“In this case, the railway company will help facilitate transport costs to return the squatters free of charge,” he said.

Obama To Bring Climate Change Agenda To Indonesia

Antara News, Friday, March 26, 2010 04:14 WIB

Jakarta (ANTARA News) - US President Barack Obama who has delayed until next June his planned visit to Indonesia will bring three agenda items on climate change, a WWF official said.

"There are three agenda items, namely forest and peat land management, clean technology and climate change, and coral triangle," WWF-Indonesia Program Director for climate and energy affairs, Fitrian Ardiansyah said here on Thursday.

Fitrian said that for the forest and peat land management, the United States would see how far Indonesia could cut its gas emissions and the chance for cooperation.

"There is a tropical forest conversion program where a fund would be made available for the Reducing Emissions from Deforestation and Forest Degradation (REDD) scheme," she said.

If Indonesia is able to formulate it, there would be a clean technology such as renewable energy technology and energy conservation, she said.

Regarding the coral triangle, the United States will continue its scientific research and coral reef protection programs.

"We hope with the visit of Obama there would be comprehensive bilateral cooperation, but all this would depend on the ability of Indonesia to make use of this opportunity, provide a clear proposal and show its priorities to the United States," Fitrian said.

China Railway Wins $4.8 Billion Indonesia Project

BusinessWeek, March 25, 2010, 6:10 AM EDT

March 25 (Bloomberg) -- China Railway Group Ltd. won a $4.8 billion order from PT Bukit Asam, Indonesia’s state-owned coal producer, for a coal transport project on Sumatra island.

PT Bukit Asam Transpacific Railway, a unit of Bukit Asam, and China Railway signed the contracts on March 23, Tanjung Enim, South Sumatra-based Bukit Asam said in an e-mailed statement today. The contracts include rights to build and operate the facilities, the Chinese railroad builder said in a statement to the Shanghai Stock Exchange.

Inadequate infrastructure outside Java, Indonesia’s most populated island, has hindered companies’ ability to develop resources in Southeast Asia’s biggest economy. The railway project will enable Bukit Asam to tap the bulk of the company’s coal reserves on Sumatra, boosting its annual output.

The railway, which is scheduled to start operating in 2014, will increase Bukit Asam’s coal transport capacity by 25 million metric tons a year, the company said.

Bukit Asam and partners are in talks with four Chinese lenders to finance 70 percent of the project and the rest will come from internal cash, the statement said.

The project will help Bukit Asam increase its annual coal- transport capacity to 40 million tons by 2013, Achmad Sudarto, the company’s corporate secretary said on Oct. 21.

Shares of Bukit Asam gained 450 rupiah, or 2.75 percent, to 16,800 rupiah a share in the Indonesia Stock Exchange at 3:07 p.m. Jakarta time.

To contact the reporter on this story: Jian Guo Jiang in Shanghai at jjiang@bloomberg.net; Yoga Rusmana in Jakarta at yrusmana@bloomberg.net

To contact the editor responsible for this story: Greg Ahlstrand at gahlstrand@bloomberg.net;

Dubai Group Ready to Start $1b Rail Project in Indonesia

Jakarta Globe, Dion Bisara, March 25, 2010

Vice President Boediono calling for more private-sector investment in infrastructure in Jakarta on Thursday. (JG Photo/Yudhi Sukma Wijaya)

MEC Holdings, a subsidiary of the Dubai-based Trimex Group, said on Thursday that it had completed acquiring land for its $1 billion railway project in East Kalimantan and is ready to begin construction in the first half of this year.

The 130-kilometer railway is part of MEC’s plan to invest a total of $5.2 billion in the province, including in a coal terminal, an aluminum smelter and a power plant.

The projects will be developed by a joint venture with the Ras Al Khaimah Investment Authority and India’s largest aluminum producer, National Aluminium, MEC said in December.

The railway project will be run and operated by MEC Infra, a joint venture between MEC and Ras Al Khaimah. MEC Infra has obtained Indonesia’s first private railway license to develop a 130km integrated freight corridor from a mine site in Muara Wahau to a port in Bengalon, East Kalimantan.

Mashael Al Naimi, head of corporate communications at MEC, said in an e-mail to the Jakarta Globe that the major land acquisitions had been completed, with construction planned to start by the end of the first half.

MEC has said it expects the first commission of a cargo train in 2011.

Although many foreign developers have complained about the complex land-acquisition process and the frequent difficulties with local villagers, Madhu Koneru, the chief executive of MEC Holdings, said he did not find these traditional hurdles so severe.

“We were dealing with many stakeholders such as ministries in Jakarta, politicians, regional governments and villagers. The biggest concern they talked about was villagers who will not give up their land,” Koneru said.

He was speaking during The Economist’s Indonesia Summit in Jakarta on Thursday, which was attended by hundreds of prominent local and foreign business executives.

“But the truth is villagers are the easiest people to talk to. If you go to them and tell them that your plan will create jobs, they will give you their land,” he said, adding that government also proved especially cooperative in drafting the right policies.

Gita Wirjawan, the chairman of the Investment Coordinating Board (BKPM), said MEC’s experience demonstrated that the usual roadblocks deterring many foreign investors from investing in Indonesia have been reduced.

“Their ability to clear most of the land for the 130km corridor in just a few months goes against the traditional perception that land clearance is nearly impossible to do in Indonesia,” Gita said.

Foreign investors have long complained of the difficulties they face in acquiring and clearing land for large infrastructure projects. Part of the problem is that land owners tend to demand excessive prices for their property once they know that a major developer is interested.

Japanese businesses may develop green cars in RI: Minister

The Jakarta Post, Jakarta | Thu, 03/25/2010 8:41 PM

Four Japanese automotive companies claimed they were ready to develop cheap, green cars in Indonesia, Industry Minister MS Hidayat said Thursday.

“The four automotive firms are Daihatsu, Toyota, Suzuki and Nissan,” Hidayat said as quoted by tempointeraktif.com. “I challenged them.”

He added that Nissan Motor Indonesia president director Takayuki Kimura, who had met him on Thursday, had expressed his interest in building a cheap, green car.

The prices of these vehicles are expected to range between Rp 70 million and 80 million per unit, he said.

Digital TV broadcast takes effect in 2018

The Jakarta Post, Jakarta | Thu, 03/25/2010 7:29 PM

The government has set a 2018 deadline for full implementation of digital TV broadcast, which is said to save specter of frequency by 50 percent in addition to far better quality of picture and sound than the existing analogue system.

Anang Ahmad Latif, head of television technology facilities sub-directorate at the Information Ministry, said Thursday both the government and TV operators were preparing regulations and infrastructure for the new era of TV broadcast.

“We have held a series of trials in several major cities like Jakarta and Bandung. This year we will move to Batam,” Anang told a gathering to familiarize digital broadcast in Yogyakarta.

He said most TV stations had been well prepared for the new system and some of them would go digital by the end of the year or early next year.

The long grace period given by the government will allow broadcasting companies to use up their investment in analogue TV industry, Anang was quoted by kompas.com.

Indonesia Merging Deforestation Rules to Spur Carbon Trading

Jakarta Globe, Fidelis E Satriastanti, March 24, 2010

A forest in South Sumatra. Indonesia has enacted three regulations to stem deforestation, and now wants to consolidate them to ease implementation and investment in carbon-trading schemes. (JG Photo/Afriadi Hikmal)

Less than a year after finalizing them, the government is set to untangle regulations aimed at reducing deforestation and forest degradation in a bid to attract carbon-trading investment.

Wandojo Siswanto, head of the climate-change working group at the Forestry Ministry, said the three regulations to be reviewed all cover the same ground, including demonstration activities, carbon-storage activities and Reducing Emissions from Deforestation and Degradation procedures.

REDD is a United Nations initiative aimed at reducing carbon-dioxide emissions from deforestation and degradation. In the scheme, rich nations provide incentives for developing countries to preserve woodlands.

“We want to review [the regulations] so people have a better understanding which one to follow,” Wandojo said.

The regulations are to be combined into one because they are all tied to a single purpose.

Indonesia is the first nation to establish a legal framework for REDD, which has not yet been implemented at international level, Wandjojo said.

“We want to keep the lead in the world and also at the negotiation table, and we have been trying to look at troubles for investment” resulting from the regulations, Wandojo said.

“We want to make sure that this [new regulation] can be easily implemented,” he said.

He added that the review was expected to be finalized before the Mexico climate summit in November.

The World Bank says 20 trial schemes are in various stages of development in Indonesia. Banks, including Merrill Lynch and Macquarie Group of Australia, are among the investors.

Indonesia is also under increasing international pressure to curb deforestation, particularly illegal logging.

The fate of indigenous peoples will also be dealt with in the revised regulation, offering legal grounds for tribes struggling to claim forests as their homes and their main source of support.

The first regulation, issued in December 2008, focuses on pilot projects for REDD, simply known as demonstration activities.

The second regulation, issued last May, deals with technical implementation for the REDD mechanism, starting with developers, verifiers and certifications. The rule outlines the rights and obligations of those who have implemented the scheme.

The same month, the ministerial regulation for procedures on carbon-storage activities was issued. It details benefit-sharing of REDD proceeds by the government, developers and local communities.

Commenting on the planned revision, Andri G Wibisana, an expert on environmental law at the University of Indonesia, said that it was not about reviewing the regulations but determining the country’s position at the inter national level.

“It’s obvious that overlapping regulations need to be sorted out. However, this is not just about the ministerial regulations but rather on clarity of the whole mechanism,” Andri said.

“There are no specific regulations made for REDD, even at the international level. There’s no standard for the measurement, definition and so on.”

Agus Setyarso, executive chairman of the National Forestry Council, said the government had not been very clear on where it wanted to go when it initially issued the regulations.

“From the beginning, the council strongly criticized the regulations, especially on the benefit-sharing part, because it is no different from concessionaires’ rights [HPH],” Agus said.

“REDD is to encourage people to take the initiative and help the government reduce emissions,” he said.

“They are supposed to be given incentives, not disincentives like this. I mean that these people should be rewarded for protecting forests and not merely trading carbon.”

Panasonic to relocate overseas factories to Indonesia

Aditya Suharmoko, The Jakarta Post | Wed, 03/24/2010 5:17 PM

Japanese electronics manufacturer Panasonic Corporation plans to relocate factories in Japan and Vietnam to Indonesia sometime this year, the Investment Coordinating Board (BKPM) said Wednesday.

Panasonic will build factories outside Java island, with an estimated investment between US$40-45 billion, BKPM head Gita Wirjawan said after a press briefing on the Indonesia Summit in Hotel Shangri-La in Central Jakarta.

"They have communicated with us, and it seems [the plan] can be actualized this year," he told reporters.

Panasonic considers the relocation because Indonesia has a large population of about 230 million, based on the latest data released by the Central Statistics Agency (BPS), he added.

"Business opportunities everywhere will always refer to the population scale of a country. Besides, Indonesia's purchasing power keeps increasing," Gita said.

According to the BPS, in 2009 Indonesia's per capita income reached $2,590, a 14 percent increase from $2,270 in the previous year.