President to spend night in quake-hit place

Bengkulu (ANTARA News) - President Susilo Bambang Yudhoyono said here Monday he would spend the night in a quake-affected place in Sumatra so as to show local community leaders what they should among other things do when there was a natural disaster in their jurisdiction.

Speaking during a visit to Bengkulu`s Provincial Natural Disaster Handling Center (Satkorlak), the president said he wanted to spend the night in a quake-hit place in order to make sure that government decisions, instructions and policy on mitigation of the disaster were right.

The president, who had just listened to a report on the impact of last Wednesday`s powerful earthquake from Bengkulu Governor Agusrin Maryono Najamudin, said he would sleep in a disaster-hit spot to set an example to district heads (who were responsible for disaster mitigation efforts in the field) on how they could make sure that their measures to deal with an emergency were right and effective.

"I will bave no tolerance for any regional chief who fails to do his or her job in an an emergency situation," Yudhoyono said.

The president said, a leader who avoided taking a risk, was not a good leader. Therefore, he called on district chiefs across the country to prepare themselves and, if necessary, take risks to help residents when there was a disaster.

Yudhoyono said when earthquakes hit Nabire in Papua, Nias and other areas, he did the same thing.

"I slept in a makeshift tent in Nabire while the area was being rocked by aftershocks," the head of state said.

On the occasion, the president also expressed his condolences to the families of earthquake victims in Bengkulu, and his gratitude to all the parties involved in emergency response efforts.

After his visit to Bengkulu`s Satkorlak, the President and his entourage boarded helicopters to visit quake-hit locations and victims in Muko Muko district and later proceeded to West Sumatra.

UN team: Emergency operations not required in Indonesia

Date: 13 Sep 2007

(New York, 13 September 2007): A series of earthquakes struck Indonesia today, following an initial 8.4 magnitude earthquake off the coast of Sumatra the previous evening. The United Nations (UN) responded by sending a nine-person assessment team from Aceh to Bengkulu province, which arrived in the area at noon. Both Wednesday's and Thursday's earthquakes generated aftershocks and tsunami alerts that were subsequently called off, although a wave of up to nine feet was reported to have struck Padang, the capital of West Sumatra province, about 20 minutes after the initial quake.

In Bengkulu, the UN assessment team met the Vice-Governor and several Government officials, and also conducted assessments at a local hospital, before relaying their findings to the UN Inter-Agency Standing Committee (IASC) Country Team, based in Jakarta. After reviewing those findings, the UN Country Team concluded that a major international relief operation was not required at this time.

"The response measures taken by Indonesia were quite effective, and demonstrate how preparedness can go a long way towards meeting needs in the aftermath of a disaster," said John Holmes, UN Under-Secretary-General for Humanitarian Affairs and Emergency Relief Coordinator.

Also today, Vice President Kalla of Indonesia thanked the Secretary-General for the offer of assistance made by the UN yesterday, but said that the national response would suffice. The Indonesian Department of Social Affairs had prepared tents and meals for the displaced, while the Department of Health had prepared one ton of medicine, three tons of supplementary food for children under five, and one ton of food for distribution. The Crisis Management Centre of Ministry of Health has deployed 20 medical personnel to Bengkulu from its Palembang office. The military has prepared several planes to transport people, and helicopters from nearby airports are ready for use.

In Bengkulu province, Government assessments revealed that more than one hundred houses had collapsed, and thousands more had been damaged. Those displaced had gathered around two "concentration points" in Bengkulu city, the provincial capital. Around 10 deaths and 25 injuries have been reported. Some damage to public buildings and homes was also reported in Padang, the capital of West Sumatra province. Patients at all hospitals were evacuated; two out of five hospitals in Padang city were considered unsafe for operation. There were three deaths and nine injuries in West Sumatra.

In-country UN agencies will support Government efforts, if needed. The United Nations Children's Fund (UNICEF) has one hundred tons of emergency supplies on stand-by in Medan, North Sumatra, while the World Food Programme (WFP) has food stocks available in Jakarta and Banda Aceh. The World Health Organization (WHO) is also prepared to work closely with Department of Health to assess needs.

Source: United Nations Office for the Coordination of Humanitarian Affairs (OCHA)

Germany to write off RI`s debts if nat`l parks in Sumatra are preserved

Kota Agung, Lampung (ANTARA News) - The government of Germany has agreed to write off half of Indonesia`s foreign debts if the country could properly preserve the national parks in Sumatra.

Chief of the South Bukit Barisan National Park (TNBBS) Task Force Ir Lusman Pasaribu said here on Friday the agreement made in the form of an MoU would be effective 2007 to 2011.

However, the government of Indonesia provided 6.25 million euros for the preservation of the South Bukit Barisan, Mount Leurse and Kerince Slebat national parks.

"If our government is able to implement the agreement, Germany has agreed to write off twice the value of fund allocated to the national parks," Lukman said.

It was reported that some other countries who acted as creditors for Indonesia as well as international non governmental institutions (NGO) had expressed readiness to provide such support under this facility and fund for the preservation of the three national parks in Sumatra.

Therefore, according to Lukman, the government of Indonesia along with the management of the three national parks should work hard to show to the international community that this country is really able to manage and preserve their flora.

"We should show them our ability to implement the agreement and manage the preservation of the South Bukit Barisan national park," he said.

Covering 356,800 hectares of land, the South Bukit Barisan National Park has a number of protected exotic and rare flora and fauna. Together with two other national parks, South Bukit Barisan national park was nominated as a cluster natural world heritage site as the last shield for the conservation of tropical forests in the world.

West Sumba teacher takes home Kalpataru award

M. Taufiqurrahman, The Jakarta Post, Jakarta

Like Sysiphus of Greek mythology, who relentlessly carries a rock uphill, West Sumba native Elan Wukak Victor has for years carried out a similarly endless task, growing trees on rocks.

The 63-year-old English teacher started by encouraging his pupils to grow trees in their schoolyard, an idea he took from school to school.

And after 30 years, Elan has planted 400,000 trees, distributed 100,000 seeds to 23 green community groups he helped set up as well as built 81 water reservoirs across Waikabubak, a barren, hilly village in West Sumba, East Nusa Tenggara.

Elan's hard work paid off on Wednesday, when he, along with 11 other environmental activists, was awarded a Kalpataru, the highest award for environmentalists in Indonesia.

Elan won in environmental conservation pioneer category, together with Amandus Kaize from Merauke, Papua, and village head Slamet Tugiyanto from Magelang, Central Java.

Kaize was honored for his efforts to grow a rare variety of plants in a protected forest controlled by his tribal community, while Slamet won for promoting multiple crops among local farmers.

One notable figure who also won the award was former West Java governor Solichin Gautama Purwanegara, for his campaign against illegal logging and on the regreening of community-controlled forests in nine regencies in West Java.

Apart from the Kalpataru awards given to environmental activists, the government has handed out Adipura awards to cities that strive to promote cleanliness.

This year, the government gave the awards to 84 cities throughout the country. More than 300 cities were nominated for the Adipura awards this year.

All five municipalities in Jakarta won Kalpatarus in the category of metropolitan city. Other cities in the category which won Kalpataru are Palembang in South Sumatra and Surabaya in East Java.

Jakarta's gain, however, was at the loss of other cities in the greater Jakarta area such as Bekasi, Bogor and Tangerang. None of these cities won Adipura in this year's contest.

Other cities which also won Adipura include Padang (West Sumatra), Yogyakarta, Denpasar (Bali), Malang (East Java) and Pekanbaru (Riau).

President Susilo Bambang Yudhoyono said in his speech before presenting the two awards that the Indonesian people did not have to wait for people in other countries to save the environment.

"Let us save the earth together with other people in this world," Yudhoyono said.

The President also called on local governments to take environmental protection into account when making policy.

He also reiterated his statement about the need to prepare for global warming's fallout.

Yudhoyono said that global warming would have a disastrous impact on Indonesia as an archipelagic country, as the rising of sea levels would drown many of the country's small islands.

"The time is high for us to find a breakthrough and brace for global warming," he said.

Govt easing procedures of doing business in densely-industrialized areas

Jakarta (ANTARA News) - The Indonesian government is trying to loosen six procedures for doing businesses in the country`s eight densely-industrialized regions to raise its investment privilege rating to 75th in 2008 from 135th in 2006, an official said.

"We will launch the project in eight densely-industrialized regions first," Head of the Investment Coordinating Board (BKPM) Mohammad Lufti said following a limited coordination meeting with Vice President Jusuf Kalla at the Office of the Administrative Reforms Minister here on Friday.

The meeting also agreed on the formation of a small team with Administrative Reforms Minister Taufiq Effendy as its chief and the BKPM chief Mohammad Lufti as executive chief to relax the procedures for doing businesses in the regions.

The eight regions are Jakarta, Banten, West Java, Central Java, East Java, Sumatra and Sulawesi.

The six procedures cover exports and imports, enforcing contracts, paying taxes, applying for building permits, and starting a business.

"Under the current circumstances, we will be able to improve our rating to 56th from 135th on condition that other countries do nothing to improve their investment privileges," Lufti said.

Under the present procedure, a foreign investor needed 97 days to start a business in the country and the government had been trying to reduce the period to 23 days, he said.

"God willing, a foreign investor can start doing business within 23 days," he said.

Delayed Sumatra-West Java gas pipeline comes onstream

Ika Krismantari, The Jakarta Post, Palembang

After nearly four months of delay, state-owned gas distributor PT Perusahaan Gas Negara's (PGN) US$1.1 billion pipeline linking South Sumatra and West Java finally came onstream Sunday.

The pipeline will initially deliver 30 million cubic feet per day from a Pertamina gas field in Pagardewa, South Sumatra, to industrial areas in Cilegon, West Java.

"We will gradually increase the gas distribution to about 250 million cubic feet per day in 2008," PGN president director Sutikno said during a ceremony to inaugurate the operation of the South Sumatra and West Java (SSWJ) gas pipeline.

State Minister for State-owned Enterprises Sugiharto and Energy and Mineral Resources Minister Purnomo Yusgiantoro also attended the ceremony.

The 375-kilometer pipeline is the first part of the company's 1,101-kilometer gas pipeline network connecting South Sumatra and West Java.

The second and final pipeline in the network is still being completed and will distribute gas from ConocoPhillips's gas field in Grissik, South Sumatra through Pagardewa and Labuhan Meringgai to Muara Bekasi and Rawa Maju in Bekasi, West Java. The pipeline is expected to go on stream in the fourth quarter of this year and will distribute up to 400 million cubic feet per day.

PGN's shares slumped by more than 20 percent from Rp 9,650 ($1.06) on Jan. 12 after PGN unveiled that the SSWJ gas pipeline project would be delayed.

Sutikno estimated that the company's soon to be announced 2006 profit will reach Rp 2 trillion (about $222 million), exceeding the government's target of Rp 1.89 trillion.

In 2005, PGN's total revenue rose by 22 percent from Rp 4.4 trillion in 2004 to Rp 5.4 trillion in 2005. Its operating profit over that period rose by 82 percent to Rp 862 billion.

With the operation of the new pipelines, the company expects its gas distribution volume to increase from 338 million cubic feet per day last year to 555 million cubic feet per day this year.By 2008, gas volume is expected to reach 919 million cubic feet per day.

Under the existing contracts, PGN will distribute a total of 3.3 trillion cubic feet of gas for 12 years from Pertamina's Pagardewa field and for 17 years from ConocoPhillips' Grissik field.

Starting this March, a power plant owned by Indonesia's biggest steelmaker PT Krakatau Steel in Cilegon will start receiving 30 million cubic feet per day from the pipeline. The volume will be increased to 40 million cubic feet per day in May. PGN is also planning to build 509-kilometer pipeline from Duri, Riau to Medan, North Sumatra with an initial capacity of 350 cubic feet per day. The construction of the project requires approximately $537 in investment.

Bank Indonesia Applies National Clearing System

Arief Ardiansyah, TEMPO Interactive - 2007-03-05 09:58

Palembang, 02 March, 2007 (TEMPO Interactive) -: Bank indonesia will apply the national clearing system all over indonesia by the end of 2007. “Funds transfer that people perform can be completed on the same day,” said Deputy Governor of Bank Indonesia. Budi Rochadi in Palembang.

During the authentication of the clearing system in Palembang yesterday, Budi said that Bank Indonesia has recorded a clearing transaction of Rp4.7 trillion during early 2007. Of the amount, Rp4.5 trillion was processed through the national clearing system of Bank Indonesia.

Bank Indonesia has inaugurated clearing areas at six offices of Bank Indonesia: Palembang, Bandar Lampung, Bengkulu, Jambi, Palangkaraya and Lhokseumawe.

UNESCO to assist Palembang puppeteers

Khairul Saleh, The Jakarta Post, Palembang

The United Nations' cultural organization is working with Palembang puppeteers to save their art and bring it to a global audience.

Two researchers from UNESCO, Karen Smith of Australia and Yuji Shimizu of Japan, were recently in the South Sumatra city to visit puppet theaters and document Palembang's rich culture, including puppet shows.

The results of the visit are scheduled to be displayed from April to June in Paris.

"The pictures and writings we get while we're in Palembang will be presented to the world, taking Palembang's puppet tradition international," Shimizu said.

During the trip, the two researchers visited the Sri Wayang Palembang theater, accompanied by Sumari, chairman of the Senawangi Foundation for puppetry and Eko Cipto, chairman of the Indonesian Puppet Masters Association.

Shimizu said they were interested in doing research on Palembang puppetry because it was such a rich cultural tradition that should be preserved.

"There is more to a puppet performance, there are so many things to learn from it," said the Japanese researcher, who lives in Paris.

Smith raised her concerns over problems faced by Palembang puppet shows, including a lack of teachers and singers.

"The Palembang puppet show is in desperate need of attention from the government and people. I'll deliver our report to UNESCO to ensure continued assistance for its development," she said.

During their visit to the puppet theater, the researchers were regaled with a show by puppet master Wirawan Rusdi, a son of one of Palembang's most noted puppet masters, the late Rusdi Rasyid.

Wirawan said he was grateful for UNESCO's assistance, since it offered a fresh chance for the struggling traditional art form.

He said he fell in love with puppet shows as a child. While his father did not specifically train him, he said recordings of his father's shows continued to provide inspiration.

Eko said he welcomed UNESCO's assistance to ensure that Palembang's puppet tradition continued to survive. He said few younger people were interested in becoming puppet masters.

"Currently, there are 15 theaters under the supervision of UNESCO," he said. Each theater receives financial assistance of Rp 500,000 (US$54) a month to help them survive.

Basically, Palembang puppet shows differ little from the more popular Javanese variety, including their gamelan instruments.

According to Ki Agus Amiruddin, the 65-year-old leader of the Sri Wayang Palembang theater, Palembang puppetry is a local adaptation of Javanese puppet shows.

The tradition is thought to have developed around the 19th century when Arya Damar, who was influenced by Javanese culture, ruled Palembang and helped develop a local puppetry tradition.

Just like Javanese puppet shows, Palembang puppet shows take their storylines from the epics Mahabharata and Ramayana.

The difference is that the shows are staged in the Palembang language and there are no strict rules on instruments and characters. The shows are usually given local touches, including stories about the Blambangan and Banter Angin kingdoms.

"There was even a green Hanoman who was born out of leaves, but now the character has gone," said Ki Agus, referring to a hero from the Ramayana.

RI waits for investors to exploit gas deposits

Ika Krismantari, The Jakarta Post, Nusa Dua, Bali

With total reserves of 453 trillion cubic feet (TCF), or about 81.5 billion barrels of oil equivalent, Indonesia has the largest coal-bed methane (CBM) deposits in the world after China.

CBM -- natural gas formed by the activity of microbes during the coal-forming process, and trapped amid coal beds -- could be a godsend for Indonesia as it struggles to cope with the depletion of its oil reserves and rising demand.

Under its new energy policy, the government has decided to gradually decrease the country's dependence on oil, and increase the use of other energy alternatives, such as gas and coal, to meet future energy demands.

By 2025, Indonesia's energy mix is expected to consist of 30 percent gas, 33 percent coal, 20 percent oil and 17 percent renewable energy. At present, oil accounts for 51.66 percent of total energy use, followed by gas at 28.57 percent, coal at 15.34 percent and renewable energy at 4.5 percent.

The potential to develop CBM is there, but it will be difficult for investors to take advantage of the opportunities due to the lack of clear regulations governing the exploitation of the costly gas deposits.

The government has already issued a ministerial decree in an effort to address the energy shortfall. But, potential investors still regard the regulation as being far from enough as it has nothing to say about much-needed incentives to help with the high cost of exploiting CBM deposits, or support in overcoming possible conflicts with coal miners.

The Energy and Mineral Resources' oil and gas director general, Luluk Sumiarso, said the regulation places a high priority on the production of CBM.

"We are all aware of the gas evaporation problem, so the operators will be urged to exploit the gas first, and then the coal," Luluk told reporters during a recent workshop on CBM exploration and production in Nusa Dua, Bali.

However, many investors have expressed doubts about the policy, arguing that the regulation does not specifically refer to a production-sharing scheme for CBM production.

In response, Upstream Oil and Gas Regulatory Agency (BP Migas) chairman Kardaya Warnika said that the government was considering offering a split of 70 percent to 30 percent in favor of the investor.

This would be much more favorable than the split in the case of regular gas production, which is 35 percent for the investor and 65 percent for the government.

Regarding the government's mooted 70:30 split, Kun Kurnely, the president director of Pertamina's exploration and production subsidiary, Pertamina EP, said it would not be enough unless the government also offered tax incentives to potential investors.

"In addition, the government should also give investors a kind of tax holiday of up to 10 years, as is the case in Australia," said Kun.

While many investors are still awaiting further clarity before becoming involved in CBM, others have progressed to the feasibility-study stage.

PT Pertamina, local company Ephindo, and Shell have all been conducting feasibility studies on CBM production in South Sumatra, Jambi and Sangatta since late 2006.

Pertamina, together with Indonesia's third biggest oil and gas producer, PT Medco EP and the government's oil and gas research and development center (Lemigas) signed a memorandum of understanding Jan. 25 for a CBM pilot project, also in South Sumatra, which has potential reserves of 183 tcf.

"We started the original pilot project on a small scale back in 2003 in one of Medco's fields, Lapangan Rambutan, to convince investors that the potential is there," Lemigas director Hadi Purnomo told the Post.

The government has also drawn up a detailed plan for CBM exploitation, setting out a production target of 1 billion standard cubic feet per day (BCF), or about 0.18 million barrels of oil equivalent, by 2025.

In the nearer term, the government hopes to attract up to US$2.5 billion in investment to develop 90 wells and produce 100 million cubic feet per day (MMSCFD) by 2014.

But before that, the government hopes that initial production of 10 MMSCFD will come onstream by 2011, based on an investment of $600 million.

Hadi said there are currently 10 investors that have expressed an interest in the sector, including U.S.-based oil major Chevron, local firm Ephindo, and Philippines-based Trans-Asia Oil and Energy Development Corporation.

"We are still waiting for the business model that will be applied by the government, not to mention clarification of the production-sharing contract mechanism," Chevron Pacific Indonesia president director Suwito Anggoro told the Post.

Indonesia lags far behind other countries, including Australia, in exploiting CBM. The neighboring country commenced commercial CBM production in 1996 in Queensland, which has reserves of 250 TCF.

Giving the stance adopted by the government to date, potential investors will likely have to adopt a wait-and-see approach, meaning that it will probably be a long time before Indonesia can benefit from its vast CBM resources.

Starbucks denies coffee report, Nestle says sorry

The Jakarta Post

Giant multinational coffee-shop chain Starbucks denied a World Wide Fund for Nature (WWF) allegation Thursday that it purchased illegally-planted coffee in Lampung province, while Switzerland-based food producer Nestle said it regretted buying the beans.

Ratih Gianda, head of investor relations for PT Mitra Adi Perkasa, Starbucks' Indonesian partner, said in a written statement sent to The Jakarta Post that the WWF report alleging that Starbucks had bought illegally-planted coffee from the Bukit Barisan Selatan National Park in southern Sumatra was inaccurate.

The statement said that Starbucks only purchased arabica coffee from Sumatra, which was grown legally in the northern part of the island. It added that Starbucks had never sourced robusta, the coffee species referred to in the WWF report, from Sumatra.

Brata T. Hardjosubroto, head of public relations for Nestle Indonesia, said his company had been unaware that the coffee Nestle purchased from Lampung was illegally planted.

"Nestle never willingly purchases coffee from dubious sources. However, the company admits the difficulty of determining the precise origin of a coffee bag which has passed through different hands before it reaches the Nestle buyer."

According to Brata, Nestle purchases between 11,500 and 12,000 tons of coffee beans from Lampung each year to make instant coffee.

He said Nestle had entered into discussions with WWF on how to avoid purchasing illegally grown coffee, and how to boost production of sustainably grown coffee and to restore wildlife habitats in the national park.

Nestle also said it hoped the Indonesian authorities would issue a regulation clarifying the precise origin of coffee grown in the region.

Suherman Harsono, chairman of the Indonesian Lampung Coffee Exporters Association, said that the members of his association could not determine if some of the coffee beans they bought were grown illegally in protected forests, although he said he was aware that many farmers grew coffee in such conservation areas.

"The government needs to be stricter in dealing with illegal practices inside the national park."

"To date, there have been no mechanisms available to differentiate between illegal and legitimate beans. However, the authorities must know more about this than us, as we only buy the beans from local traders," he said.

He said that the association would forge closer cooperation with the local government's plantation agency, forestry agency, economic affairs agency, and trade and cooperatives agency to prevent the possible rejection of Lampung's coffee exports.

According to Suherman, annual average domestic coffee consumption stood at around 150,000 tons, while last year Indonesia exported 258,000 tons of fourth grade coffee beans at a price of US$1,200-1,300 per ton. The quality of beans are ranked grade one to six.

Indonesia is the world's fourth-largest coffee producer and exporter, and second-largest producer of robusta. About 70 percent of Indonesia's coffee exports come from South Sumatra, Bengkulu and Lampung.

The WWF reported that about 15,000 local farmers worked illegally inside the park, cultivating 45,000 hectares of conserved land to grow more than 19,600 tons of coffee. Their illegal activities had destroyed about 20 percent of the forest.

Seventy percent of the 365,800-hectare Bukit Barisan Selatan national park is located in Lampung, while the rest is in Bengkulu province. It is home to a number of critically endangered species, including populations of approximately 40 Sumatran tigers, 500 Sumatran elephants and between 60 and 85 Sumatran rhinoceroses.

Regulator investigating possible irregularities in PGN affair

Jakarta (ANTARA News) - The capital markets and financial institutions supervisory board, Bapepam-LK, has begun investigating possible irregularities that may be behind the sharp fall in the price of PT Perusahaan Gas Negara's (PGN's) shares last week, Bapepam-LK chairman Fuad Rahmany said.

PGN slumped by 23.32 pct to close at 7,400 rupiah Friday after the company announced that it was postponing by three months the start of commercial operation of its new gas pipeline between South Sumatra and West Java.

Rahmany told reporters: "I have issued a letter of instruction to undertake an investigation of the case. Both PGN management and brokerage houses will be questioned over the matter."

This follows a demand by the minister in charge of state-owned enterprises, Sugiharto, that the board investigate the PGN affair.

Asked about the possibility of insider trading, Rahmany replied: "We need to investigate before come to such a conclusion."]

The management will be questioned about whether there was negligence in complying with disclosure requirements, he was quoted by XFN Asia as saying.

Asked about reports in the news media that Bapepam-LK will question 12 brokerages, he replied: "Yes, around that number."

He declined to identify these brokerages.

PGN blames management, technical problems for pipeline delays

Ika Krismantari, The Jakarta Post, Jakarta

State gas company PT PGN has blamed a six-month delay in the opening of a key US$1.1 billion pipeline -- which sent its shares tumbling by 23 percent last week -- on management and technical problems.

The pipeline will span a total of 1,106 kilometers and link South Sumatra and West Java, and have the capacity to transport 1,000 million standard cubic feet per day (mmscfd) of gas. It was originally scheduled to open in December.

PGN's shares fell 23.3 percent last week to Rp 7,400 (US$0.81) from Rp 9,650.

"We should have realized there would be a delay earlier, but because of the explosion the directors, who were appointed in mid-November, were focused on that," PGN president director Sutikno said Sunday.

The explosion he was referring to involved a PGN gas pipeline in Sidoardjo, East Java, the site of the mudflow disaster.

It was not until the middle of December that the directors started analyzing the problems hindering the gas pipeline project, he said.

"We released a statement about the delay on Jan. 11, after we reached a final conclusion on how long the project would be delayed," Sutikno said.

He denied there was any effort on the part of the management to try and cover up the delay.

PGN director for development Adil Abbas said another problem facing the project was the issue of land clearance.

As a result of the delay in the opening of the pipeline, PGN revised down its gas production target for this year to 555 mmscfd from 787 mmscfd.

For 2007, PGN has set aside $517.11 million for a number of different projects, including gas pipelines linking Duri in South Sumatra, Dumai in Riau and Medan in North Sumatra.

Data to determine government's gas policy to be issued soon

The Jakarta Post, Jakarta

Long-awaited projections of the country's long-term gas supply and needs will be issued later this month, providing the government with reliable figures on whether or not it should go ahead with its liquefied natural gas (LNG) export policy and interisland gas pipeline projects.

"I hope the preparation of the gas supply and needs projections will be completed this month," the Energy and Mineral Resources Ministry's director general of oil and gas, Luluk Sumiarso, told the Suara Pembaruan daily Wednesday.

He said that the gas projections would provide information on proven gas reserves and potential demand in nine gas-producing provinces, including Nanggroe Aceh Darussalam, North Sumatra, South Sumatra, Jambi, West Java, Central Java, East Java, East Kalimantan and Papua.

"The data will be used as the basis for deciding whether or not we will go ahead with the plan to build a gas pipeline linking East Kalimantan and Central Java, and to determine our future export policy," he said.

PT Bakrie & Brothers won tenders from the downstream oil and gas industry regulator, BPH Migas, in July to build and operate the 1,115-km pipeline linking East Kalimantan and Central Java.

However, the construction of the $1.26 billion pipeline project has been delayed due to a lack of gas supplies.

Current gas production in East Kalimantan is only enough to supply the PT Badak NGL liquefied natural gas plant, the country's largest LNG producer.

Energy and Mineral Resources Minister Purnomo Yusgiantoro had said that the fate of the pipeline project would be determined after the issuance of the gas supply projections.

Purnomo said that the government might also choose to use LNG tankers, instead of building pipelines, to overcome gas shortages in Java.

Due to the decline in gas production, the government had planned to cut LNG exports by 19 percent to Japan, South Korea and Taiwan this year.

Indonesia may ship 19.4 million metric tons of LNG this year, less than the contracted 24 million tons. Pertamina is also negotiating the postponement or replacement by other producers of 36 cargoes from the Badak plant and 22 from Aceh-based LNG producer PT Arun NGL.

Luluk said the government was still committed to exporting LNG based on existing contracts, even if there was a shortage of gas supplies at home.

The gas supply projections will only affect future export policy, he said.

According to figures issued by the Energy and Mineral Resources Ministry, Indonesia's total gas reserves stood at 187.1 trillion standard cubic feet (TSCF) last year, up from 185.8 TSCF in 2005.

Last year, Indonesia produced a total of 8.10 billion standard cubic feet per day. About 54 percent of the total gas production was exported, mostly in the form of LNG. The remaining 46 percent was sold on the domestic market.

Expanding Aquaculture Production for Indonesia's Poor Fish Farmers

14 December 2006, Asian Development Bank

MANILA, PHILIPPINES - ADB will help boost the incomes of 14,000 poor fish farmers in Indonesia through a loan of US$33.3 million to enhance aquaculture production and productivity in select provinces.

The Project will support a Government program to promote community-managed freshwater, brackishwater, and marine aquaculture development among poor communities of the country.

It will be carried out in five districts of four provinces: Langkat in North Sumatra, Ogan Omering Ilir in South Sumatra, Karawang and Sumedang in West Java, and Buton in Southeast Sulawesi.

Aquaculture plays an increasingly significant role in Indonesia’s economy, employing about 2.5 million people, providing an important source of nutrition and generating valuable foreign exchange earnings and domestic revenues.

However, poor fish farming systems and lack of good quality fish and shrimp seed, along with growing environmental degradation and pollution, are holding back the sector. Other problems include lack of access to credit for smaller fish farmers, absence of marketing infrastructure, and user conflicts in open water areas.

The project, officially known as Sustainable Aquaculture Development Project, will focus on small-scale and low-cost systems that are economically sound and environmentally friendly, and that can easily be replicated by larger entrepreneurs and organizations.

It will include pioneering new schemes to help organized fish farmer groups in establishing microenterprises and marketing their products, assisted by community based and nongovernment organizations. Key public aquaculture facilities will be rehabilitated along with associated access roads.

The project will also help the Directorate General of Aquaculture (DGA) and participating district governments to formulate policies and regulations for aquaculture development and environmental management.

“Besides the increase in aquaculture production, incomes and jobs, the project is expected to generate more general benefits,” says M. Jamilur Rahman, an ADB Principal Project Specialist. “These include a cleaner environment and better health and nutrition among rural populations from overall expansion of the food supply, given that fish is a staple in Indonesia.”

The total project cost is $44.5 million, of which ADB’s contribution accounts for almost 75%. The loan is from ADB’s concessional Asian Development Fund, carrying a 32-year term, including a grace period of eight years. Interest is charged at 1% per annum during the grace period and 1.5% per annum for the rest of the term.

Other contributors to the project are the national and district governments ($8.46 million) and beneficiaries ($2.76 million).

The DGA of the Ministry of Marine Affairs and Fisheries is the executing agency for the project, which is due for completion around the end of 2013.

Project Proposal: Sustainable Aquaculture Development for Food Security and Poverty Reduction Project (Indonesia) [PDF]

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President to open crumb rubber plants in Palembang

December 11, 2006

Palembang (ANTARA News) - President Susilo Bambang Yudhoyono is scheduled to open three crumb rubber plants in Palembang on December 19, local municipal administration spokesman Marwan Hasmen said here on Monday.

"The three crumb rubber plants are all located in Kertapati sub district," Marwan said after leading a preparatory meeting for the president`s visit.

He said the plants would produce two kinds of processed rubber, namely Standard Indonesian Rubber (SIR) 10 and SIR 20.

In addition, the president was also scheduled to inaugurate two crude palm oil (CPO) plants at two separate locations in South Sumatra.

Marwan said for the purpose, the Palembang municipal administration in cooperation with the South Sumatra provincial administration had done the necessary coordination work to make Yudhoyono`s program a success.

Govt moves to help out debt-strapped water firms, initiates restructuring

The Jakarta Post, Jakarta

The Finance Ministry will restructure debt of close to Rp 4 trillion (around US$440 million) owed by 176 local-government water utilities so that they can focus more on improving their services.

The restructuring will mostly take the form of rescheduling of principal and interest payments, although a small part of the debt will also benefit from write-offs, said Herry Purnomo, the ministry's director general for the treasury.

The overall debt is made up of Rp 3.75 trillion, $940,000 and 300,000 deutsche marks.

"The debt originated from central government loans between 1971 and 2005," Herry said. The loans and interest reached a total of Rp 5.949 trillion by the end of September, with the utilities only managing to repay some 37 percent of the outstanding debt, or Rp 2.195 trillion.

The restructuring is expected to provide the utilities with breathing space and allow them to focus on improving their water supply capacities.

At present, the utilities are only able to supply water to 41 percent of the urban population, against a national target of 66 percent by 2009.

Ridwan Syahputra Musagani, chairman of Indonesian Water Utilities Association (Perpamsi), hailed the government's move, saying it would allow the companies to better manage their cash flows -- a plus factor as most of them are desperately trying to finding private investors as partners.

"There are actually investors, local and foreign, which have expressed interest in teaming up with local water utilities. But many are concerned about the huge debts they are laboring under.

"So, I think this will be good news for those investors," Ridwan said.

Currently, there are 318 water utilities throughout the country, with only 44 of them being deemed healthy. Some of the ailing water companies with the biggest debt burdens are found in major cities like Jakarta, Bandung, Palembang and Makassar.