THE COORDINATING MINISTRY FOR ECONOMIC AFFAIRS
REPUBLIC OF INDONESIA
Main Building, Ministry of Finance, Jl. Lapangan Banteng Timur No.2-4 Jakarta 10710
Tel: (021) 351-1178 Fax: (021) 351-1186 Website: http://www.ekon.go.id
Trade and Investment News1, 30 March 2009
Highlights
National
 Jakarta is planning to transform Kemang into a modern commercial hub
Politics
 Poll officials are considering banning open campaigning for more effective televised debates
Terrorism
 Prosecutors have sought up to 20 years in prison each for 10 terrorist suspects
Security
 Two men have been arrested in connection with a series of grenade attacks in Aceh
Law & Order
 An Afghan-born US National has been arrested on charges of human trafficking
Economy
 President Susilo Bambang Yudhoyono will head to London for the G20 summit
Business Briefs
Macroeconomy
 The government has started disbursing the $6.3 billion stimulus package
 Bank Indonesia may seek more bilateral currency swaps similar to one with China
Investment
 Jakarta received a $7.7 million grant to kick-start its first-ever mass rapid transit system
State Concerns
 Around 605,000 new jobs may come from building highways financed by the state budge
SOEs
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PT Jasa Marga has earmarked $407 million for capital expenditure this year
PT Telkom and Telekom Malaysia Berhad have signed a cooperation agreement
Private Sector
 Matahari sales estimated to reach $238 million in 2009
 PT Prudential Life Assurancea 27.5% increase in premium income for 2008
Banks
 Bank Tabungan Negara will issue up to Rp1 trillion in mortgage-backed securities in H1 2009
Power
 Around $43.5 million in stimulus has been disbursed to expand electricity transmission
 JBIC has committed $900 million in loans to increase Muara Tawar power plant capacity
Oil & Gas
 The government will divert 12 LNG export cargoes to the domestic fertilizer market
 Bakrie & Brothers plans to build a 1,200 km Kalimantan-Java LNG pipeline
Mining
 PT Kaltim Prima Coal will sell coal to China, with one million tons shipped in the first year
 Two state companies will $63.5 million in a S. Kalimantan iron ore project
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This Trade and Investment News is a publication of the Coordinating Ministry for Economic Affairs
of the Republic of Indonesia. Readers are welcomed to forward it in its original form but no
reproduction is allowed without permission.
1
NATIONAL
Jakarta says big plans in store for Kemang
Kemang in South Jakarta will be transformed into a modern city without high-rise buildings, the
head of the Jakarta’s spatial planning agency announced, reported The Jakarta Post.
Wiriyatmoko said Kemang would be developed where sidewalk cafes, boutiques and homey
restaurants lay side by side on a long street.
During the 1980s, Kemang was a quiet residential area, but metamorphosed into commercial
hub, with dozens of restaurants and bars squeezed into the area, hounded by hordes of
customers and their vehicles crowding the streets.
The area now has some 60 cafes and restaurants as well as several hotels.
Kemang was originally meant as a residential zone, but with the frenzied development of the past
few years, the administration now plans to make it a legal commercial area.
Businesses in Kemang still have to pay regular fines for converting homes into businesses.
Wiriyatmoko said the administration was studying several options, but gave no details.
“The houses will still be there, with the cafes and restaurants trimmed along the main street. But
the administration will not let high-rise buildings be built," he said.
High-rise buildings, defined as more than eight stories tall, are still allowed for residential
purposes. A 1999 gubernatorial decree declared the area a modern ‘kampung’.
A.Z. Harahap, head of the South Jakarta Tourism Sub-agency, said recently his office plans to
develop areas of Kemang and Melawai as culinary tourism sites, reported beritajakarta.com.
POLITICS
Officials mulling ban on open campaigning
The General Elections Commission (KPU) is considering banning open campaigning from the
upcoming presidential race altogether, calling it an outdated practice that is no longer an effective
way to educate voters on a candidates platforms, reported The Jakarta Globe.
KPU member I Gusti Putu Artha said the KPU would "very likely" axe open campaigning and
instead hold televised debates between presidential candidates.
The regulation will be ready for signing "sometime in April," Artha said.
Artha said the KPU was still drafting specifics of the debates, but under the draft regulation the
program would be held five times before the presidential election on July 9.
Under the plan, presidential candidates would debate three times during the campaign season,
while vice presidential candidates would debate twice.
He said the KPU planned to have a moderator from the media ask questions, adding that the
KPU would allow only the press to watch the debate. The general public would see a taped rerun.
The KPU announcement came on the heels of public criticism of the ability of outdoor rallies to
educate voters about candidates and their platforms.
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Some political observers have made the criticism that open campaigning, which by definition
involves campaigning by mobilizing a mass of supporters on the streets or in other public spaces
in order to advertise the plans of a political party, is not an accurate measure of a party's
popularity and an even poorer measure of a candidate's ability to govern.
But open campaigning has also been credited as a good way of getting the public involved in
politics and the best method of reaching out to poor people currently available.
The KPU gave no prior announcement regarding its plan to ban open campaigning, but it appears
that its stance is quite clear.
Artha said KPU officials were mostly in agreement regarding the plan to ban open campaigning, a
decision that will be discussed at the commission's next plenary meeting.
He said the KPU would make its decision based on two factors: The absence of a law regulating
open campaigning by presidential candidates and the social impacts of the method, which he said
KPU officials had agreed were mostly negative.
"Open campaigning itself began in the New Order era, as a way to communicate party policies to
the masses during a time when mass media outlets were severely limited to the state television
channel TVRI," he said.
TERRORISM
20 years sought for Singapore terror leader
Prosecutors demanded 20 years' jail for an alleged terrorist from Singapore who has confessed
to killing a teacher and plotting an attack against Western tourists, reported Agence FrancePresse.
Mohammad Hasan bin Saynudin laughed and giggled as the prosecution announced it would not
seek the maximum sentence of death.
"I don't agree with 20 years. I will continue to fight and appeal for a lighter sentence because I'm
not wrong. In fact I should get a medal for this act," he told the court.
Hasan, who claims to have met al Qaeda leader Osama bin Laden in Afghanistan in 2000, has
spoken openly of his crimes to reporters from his remand cell during his ongoing trial.
"I'm not wrong and I don't regret what I did. In the eyes of God I did nothing wrong... We only
killed one idiot," he said before the start of Tuesday's proceedings.
He has also confessed to planning to bomb Singapore's Changi international airport on behalf of
regional terror network Jemaah Islamiyah.
Prosecutor Totok Bambang said that as "only" one person had been killed -- a male teacher in
June 2007 -- the death penalty for Hasan or any other members of his alleged terrorist cell was
not merited.
"We would have asked for the maximum sentence if the impact on the public was great but in this
case only one person was killed," he explained.
He said Hasan had been "proven clearly and convincingly to have undertaken terrorist acts
together with others."
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"Hasan is a dangerous man... He is the brains behind the attack (against the teacher). He
planned and came up with the concept but some of his ideas were not carried out."
The state requested sentences of seven to 15 years for six of his co-accused who were also in
court.
In seeking the sentences, it revealed that the cell had also planned to bomb a church and the car
park of the Supreme Court in Jakarta.
It had also decided to bomb a backpacker cafe in West Sumatra in 2006 but aborted the attack
due to concerns about possible Muslim casualties.
The suspects were rounded up in Palembang, South Sumatra in June and July last year.
SECURITY
Aceh grenade attackers arrested, transferred to Jakarta
Two men suspected in several grenade attacks in Aceh province were arrested in Langsa
regency on Thursday and was immediately taken to the National Police headquarters in Jakarta,
Tempo Interactive reported.
According to an inside police source, one of the suspects identified as Irwan, was involved in
several grenade attacks in Bireun regency.
The suspects are being investigated for their possible involvement in a grenade attack on the
Langsa deputy regent's house after a campaign donation for the Aceh Party, made up mostly of
former separatists from the Free Aceh Movement (GAM), was rejected by the deputy regent.
In another incident, a grenade was thrown at the home of an Aceh Party legislative candidate in
Bener Meriah regency by two unknown men on Thursday morning.
The Jakarta Post reported that police confiscated a grenade, a rifle and 32 rounds of ammunition
from the suspects.
National Police spokesman Insp. Gen. Abubakar Nataprawira confirmed the arrests but refused
to give further details.
Nataprawira did say however National Police and Aceh Police are conducting the so-called ‘Sikat
Rencong’ operation, aimed at combating illegal firearms and increasing grenade attacks and
bombings throughout Aceh.
LAW & ORDER
US people smuggling suspect handed over to police
An Afghanistan-born man with an American passport was transferred to National Police
headquarters on Wednesday for further questioning in relation to an elaborate trans-national
immigration scam targeting Chinese citizens, reported Reuters.
National Police spokesman Insp. Gen. Abubakar Nataprawira alleged that Yusuf Karim, also
known as Josh Joseph, violated immigration laws and could face six years in jail and a maximum
fine of Rp30 million.
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A spokesman for the Immigration Directorate General, Maroloan Barimbing, confirmed on
Wednesday that Karim had been handed over to National Police.
He said the case stemmed from a tip-off on March 16 from the owners of a hotel in Tangerang,
Banten, where a group of Chinese migrants were living.
“After we checked, we found the Chinese had overstayed their 30-day visas,” Barimbing said,
adding the group consisted of six females and 41 males.
After being questioned by an immigration officer, the 47 Chinese migrants, currently being held by
immigration officials, said they had only planned to transit through Indonesia before continuing on
to Australia.
“They said Karim was the mastermind,” Barimbing said. “We detained Karim on March 16 at his
hotel room in South Jakarta before we handed him over to the police.”
Police said the migrants came to Jakarta via China Airlines from Beijing in three groups.
Seventeen people arrived on October 21, 29 people on November 5 and one person on
December 18.
The migrants told police they came to Indonesia after reading an advertisement Karim posted
when he lived in Beijing. Each person was required to pay $8,050 to take part in the scheme.
“The victims believed they would get jobs in Australia after they passed a test in Jakarta,”
Barimbing said. “The hoax was coordinated by Karim. Of course the victims never went to
Australia because the jobs did not exist.”
Smugglers often use a route through East Nusa Tenggara to get people into Australia. They rent
boats that pass Ashmore Reef, Australia, before reaching land in Darwin, a 10-hour journey. But
it is not clear whether Karim was attempting to use this route.
Meanwhile, the Jambi Immigration Office on Wednesday detained seven illegal immigrants from
Afghanistan, reported Antara.
According to Jambi Immigration Office Chief Agus Mustari, the seven foreigners were detained as
they were about to board a flight to Jakarta, without proper travel documents.
Indonesia has seen an influx of illegal immigrants from Afghanistan in recent months.
Investigations have pointed to a visa-for-sale scam at the Indonesian Embassy in Kabul,
Afghanistan, but Indonesian officials strongly denied the accusations.
ECONOMY
Hopes pinned on stimulus as SBY readies for G20
Attention is now squarely on the G20 conference to be held in London this week and the role that
President Susilo Bambang Yudhoyono will take -- not only as the Indonesian president but as a
spokesman for developing countries within the region.
Yudhoyono told foreign investors at the State Palace on Tuesday: "In the current global financial
crisis, the G20 summit is of great significance. I hope the London meeting will come up with a
concrete proposal to change the global economic order," reported Antara.
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The President said "We proposed global expenditure funds at the previous G20 meeting to assist
the developing countries which are facing funding difficulties,"
The comments made by the President indicate his desire to progress international financial
reforms with an emphasis on outcomes for developing nations particularly in this economic
climate.
The G20 comes as the central bank cut its 2009 economic growth forecast, the second time this
month, to 3%-4% percent as exports slump, and expects inflation to ease further in March, the
senior deputy governor said, reported Thompson Financial.
The central bank had already lowered its GDP growth forecast for Southeast Asia's biggest
economy to 4% percent earlier this month, from 4%-5% percent previously
The comments came on the back of the signing on Monday of a bilateral currency swap
arrangement (BCSA) worth Rp175 trillion (nearly $14.7 billion) by the Governor of Bank Indonesia
(BI) Boediono and Governor of the People’s Bank of China (PBC) Zhou Xiaochuan.
The swap arrangement is expected to contribute to increased trade and investment between the
two states, and provide short-term liquidity for money market stability.
On Tuesday BI Governor Boediono confirmed that BI may seek bilateral currency swap
agreements similar to the one it has signed with China with other trading partners to manage
demand for the US dollar,
Meanwhile, as a forerunner to the President’s visit to London and as further evidence of the
government’s efforts to bolster the economy, the government also announced on Monday that its
Rp73.3 trillion ($6.31 billion) stimulus package was starting to flow as scheduled.
Coordinating Minister for the Economy Sri Mulyani Indrawati said Rp56.3 trillion worth of the
stimulus had been channeled in the form of tax incentives starting on January 1. “The effect can
be seen when companies and workers pay their taxes,” Indrawati said after a meeting with
President Susilo Bambang Yudhoyono. The tax incentives, she said, included tax cuts for
companies, workers and individuals, totaling Rp43 trillion this year.
Another Rp13.3 trillion is allocated for tax subsidies and import duty exemption for certain laborintensive industries. On Tuesday the government announced that it will receive a $190 million
loan from Japan to fund programs to help improve the investment climate, alleviate poverty and
build infrastructure.
The Japanese government will also provide another loan worth around $728 million for
infrastructure development.
As the election year and campaigning heats up, major parties promised to treat foreign investors
equally, although their representatives did not elaborate on whether they would maintain or revise
business regulations.
These include the list of sectors open to foreign investment and the limit of capital ownership,
which is still being revised.
With varying emphases, the Golkar Party, the Indonesian Democratic Party of Struggle (PDI-P)
and the Democratic Party said they welcomed foreign investment in Indonesia.
PDI-P economics advisor Iman Sugema said his party welcomes overseas investors “as long as
they are 'clean' and willing to transfer their technology”.
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By "clean", he said the PDI-P would seek "to avoid foreign investors winning contracts just
because of pressure" from their governments.
An economic team member of President Susilo Bambang Yudhoyono’s Democratic Party also
pledged equal treatment for investors "as long as they support our national economic interests."
In last Friday, the last trading day of the week, IHSG jumped 3.01% or 42.772 points to 1,462.75,
the highest in the last 5 months, following growing optimism from foreign investors on Indonesian
economy. IHSG was mostly backed by commodities and infrastructures shares.
MACROECONOMY
Stimulus package starts to flow: Minister
The government announced Monday its Rp73.3 trillion ($6.31 billion) stimulus package to help
boost the economy was starting to flow as scheduled, The Jakarta Post reported.
Coordinating Minister for the Economy Sri Mulyani Indrawati said Rp56.3 trillion worth of the
stimulus had been channeled in the form of tax incentives starting on January 1.
“The effect can be seen when companies and workers pay their taxes,” Indrawati said after a
meeting with President Susilo Bambang Yudhoyono.
BI may seek currency-swap deals with more countries
Bank Indonesia (BI) may seek bilateral currency swap agreements similar to the one it has signed
with China with other trading partners to manage demand for the US dollar, BI Governor
Boediono said Tuesday, Dow Jones reported.
“We are open to that,” Boediono told reporters when asked if Indonesia will seek deals with other
countries similar to the three-year pact it signed with the People's Bank of China Monday.
The Rp175 trillion-agreement with China is to help finance trade between the two countries,
which last year totaled $26.7 billion.
“The impact of the bilateral currency swap agreements (on the rupiah) will be very good,”
Boediono said.
“I am optimistic that the rupiah is more stable and will strengthen,'” he told reporters.
The new agreement with China is on the top of the Chiang Mai initiative, under which Indonesia
can tap at least $12 billion from Japan, $4 billion from China and $2 billion from South Korea, if
necessary, to defend the rupiah.
Boediono also called for more steps to reduce dependency on the US dollar in carrying out
international financial transactions, The Jakarta Globe reported.
“It is dangerous for the world to rely on one or two national currencies to serve global
transactions,” Boediono told a news conference at the central bank.
“With the bilateral swap transaction, settlement between two countries can be directly done
without having to convert to US dollars first, thus it can decrease dollar dependency.”
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Govt. to tender $3.5B of projects in Q2: Minister
The government plans to put four infrastructure projects worth nearly $3.5 billion up for tender in
the second quarter, including coal-fired power plant in Central Java, the planning ministry said on
Wednesday, Reuters reported.
The four projects also include a $700 million railway connecting Soekarno-Hatta airport to
Jakarta, a $740 million railway connecting Palaci and Bangkuang in Central Kalimantan, and a
$24 million cruise terminal in Bali.
Four other projects, worth $1 billion in total, will be put up for tender in the second half of 2009
and early next year.
“Projects, which are ready for tender, have already had feasibility studies and the government
support, if needed,” said Planning Minister Paskah Suzetta, adding that the government would
provide guarantees for political and natural disaster risk, as well as for land provision to attract
investors.
The projects, to be funded by the private sector, are in addition to infrastructure deals covered by
a Rp73.3 trillion ($6.35 billion) fiscal stimulus package which is aimed at driving growth and
creating jobs in an election year.
Govt. to sell sukuk before June
The government plans to sell up to Rp7.5 trillion ($650 million) of Islamic bonds (sukuk) before
June, its first global sukuk issue, Reuters reported.
Rahmat Waluyanto, Treasury Director General at the Finance Ministry, said the global sukuk
would be issued before a Samurai bond issue which is planned for June, and the size would
depend on the underlying assets available.
The government has already raised more than two-thirds of its gross debt issuance target for
2009, but it wants to tap a wider investor base using a broad array of instruments including
shariah-compliant debt.
Separately, Dahlan Siamat, an official in charge of Islamic debt at the ministry, said the
underlying assets consist of government property in Jakarta which are worth Rp7.24 trillion and in
Bandung, West Java, which are worth Rp250 billion.
The sukuk will be issued according to the ijarah contract.
Govt. raises Rp2T in debt auction
The government raised a total of Rp2 trillion ($175.8 million), in line with its target, from debt
auctions on Tuesday, only about a fifth of incoming bids as authorities angled for lower yields with
much of the year's issuance completed, Reuters reported.
The Finance Ministry has already raised about two-thirds of its gross debt issuance target this
year.
“The ministry wants to give a signal that yields are easing, thus they are not pushing to raise
more than they had expected,” said Budi Susanto, a debt analyst at Danareksa Sekuritas.
The ministry had raised lower than the targeted Rp1.85 trillion in the last debt auction on March
10, which signaled it was less willing to pay high yields.
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INVESTMENT
Govt. pours more funds into city’s MRT project
Jakarta city administration received a $7.7 million grant from the central government to speed up
the construction of the city’s first-ever mass rapid transit (MRT) project, The Jakarta Post
reported.
The Director General for Regional Financial Balance at the Finance Ministry, Mardiasmo, said
Wednesday that the grant was part of the loan from the Japan International Cooperation Agency
(JICA), the MRT project advisor.
The central government borrowed money from JICA and later gave part of the sum to the city as
a grant.
“We will use the grant for consultation services,” Governor Fauzi Bowo said.
The administration has allocated Rp40 billion from its 2009 budget for the initial work for the
project.
STATE CONCERNS
State-backed road projects to soon provide 600,000 new jobs
The Public Works Ministry expects 605,000 new jobs could be quickly created by building
highways financed by the state budget, The Jakarta Post reported.
"Originally, we predicted the acceleration of national road development would absorb 550,000
new workers. But if we add the stimulus factor ... we can have another 55,000 workers," the
ministry's Director General for Highways Hermanto Dardak said on Wednesday.
"The stimulus package for road development amounting to Rp1.7 trillion ($195 million) will add to
our existing Rp18.7 trillion for roads. We have submitted the project proposal to the Finance
Ministry and hopefully they can disburse the package as soon as possible," he said.
Govt. receives $190M in foreign loans
The government will receive a $190 million loan from Japan to fund programs to help improve the
investment climate, alleviate poverty and build infrastructure, officials have announced, The
Jakarta Post reported.
The Rp2.27-trillion loan, which was signed Tuesday, is divided into two parts, each worth Rp1.13
trillion. The first part aims to support macroeconomic development, such as reducing poverty,
while the second is aimed at improving infrastructure reform.
Krisiarto S. Legowo, the Foreign Ministry’s director of East Asia and Asia-Pacific affairs, said the
first part of the loan would be a co-financing scheme between Japan and the International Bank
for Reconstruction and Development (IBRD).
The second, similar scheme, will be between Japan and the Asian Development Bank, Kristiarto
said, adding the requirements of the loan included a 0.7% annual interest rate, a repayment
period of 15 years and a five-year grace period.
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SOEs
Jasa Marga sees capex of $400M for new toll roads
Toll road operator, PT Jasa Marga, said on Wednesday it has earmarked Rp4.7 trillion ($407
million) for capital expenditure this year, four times the 2008 sum, for expansion and share
purchases, Reuters reported.
Jasa Marga president director, Frans Sunito, told reporters that shareholders had approved the
management's plan to build eight new toll roads over the next three to four years, at a cost of
about Rp15 trillion.
Jasa Marga plans to increase the length of toll road it operates to 700 km, from 500 km currently,
as a result of the expansion.
Telkom, Telekom Malaysia sign cooperation agreement
State telecommunication company, PT Telkom and Telekom Malaysia Berhad have signed a
cooperation agreement to expand telecommunication business in the international market, Asia
Pulse reported.
Telkom president Rinaldi Firmansyah said the memorandum of understanding signed last
Wednesday would serve as a milestone for the expansion of mutually beneficial business
cooperation between the two companies.
Research by Telkom showed that the cooperation has a potential business value of up to Rp2
trillion ($180 million) in the next five years.
The international cooperation will include in voice and data services, international cable system
and optimization of data centers, Firmansyah said.
PRIVATE SECTOR
Matahari sales estimated to reach $238M
The sales of Matahari Department Store, a business unit of one of Indonesia's largest retail
companies PT Matahari Putra Prima, are forecast to reach Rp2.62 trillion ($238 million) in the first
quarter of this year .
The estimated sales value is 7% higher than Rp2.45 trillion it recorded in the same period last
year and overshoots the growth target of 5% set for the January-March period, company
president Travis Saucer said earlier this week.
In the whole of this year the company hopes to chalk up a 20% increase in sales exceeding the
average growth target of 15% for Indonesian retail industry, Saucer said.
The highest increase of 25% is recorded in the sales of footwear, or the highest in the last three
years by the company, he was quoted as saying by Investor Daily.
Prudential Indonesia posts $583M in premium income
PT Prudential Life Assurance (Prudential Indonesia) recorded a 27.5% increase in premium
income to Rp7.02 trillion ($583 million) last year from Rp5.51 trillion in 2007, Asia Pulse reported.
New premiums accounted for Rp3.4 trillion of the total income, or an increase of 42% from 2007,
company's chief executive officer Kevin Holmgren said.
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Holmgren said the company is set to maintain the trend by increasing the number of its sales
agents and improve distribution systems.
Vice president director and chief agency officer Rinaldi Mudahar said with the records it made in
2008, Prudential Indonesia is the best performing life insurance in the world, Investor Daily
reported.
Sales agent contributed 95% to the total premium income and other systems including
bancassurance accounted for the rest, Mudahar said.
Excelcomindo gets second $214M EKN loan
Cellular operator PT Excelcomindo Pratama has inked a second deal with Swedish export credit
guarantee agency EKN to secure $214 million in loans for the purchase of Ericsson equipment
from Sweden, The Jakarta Post reported.
The facility, arranged by ABN AMRO Bank N.V.'s Stockholm Branch and Standard Chartered
Bank, is the second tranche of the total $428 million facility provided by EKN, according to a
statement from the company on Tuesday. The first loan was signed in December last year.
Loans from the facility will be used to partly finance the company's capital expenditure this year.
Unilever Indonesia 2008 net profit Rp2.41T
Consumer goods producer PT Unilever Indonesia said Friday its 2008 net profit rose 23%
because of an increase in sales, Dow Jones reported.
Net profit for the January to December period rose to Rp2.41 trillion from Rp1.96 trillion the
previous year.
Sales rose 24% to Rp15.58 trillion from Rp12.54 trillion.
Assets at end-December at the nation's largest consumer goods producer by sales rose 22% on
year to Rp6.50 trillion.
BANKS
BTN to issue Rp1T in mortgage-backed securities
State-run Bank Tabungan Negara (BTN) plans to issue up to Rp1 trillion ($86.39 million) worth of
mortgage-backed securities within the first half of 2009, BTN treasury director Saut Pardede said
Monday, The Jakarta Post reported.
Last month, BTN issued the country’s first ever Rp100 billion of mortgage-backed securities,
popularly known as KIK EBA.
Also on Monday, BTN president director Iqbal Latanro announced the bank would cut its
mortgage loan rate by 50 percentage points to 14% starting from April 1.
Bank Mandiri 2008 net profit likely up more than 10%
PT Bank Mandiri said its 2008 net profit could grow more than 10% from the previous year,
thanks to higher lending and an improvement in net interest margin, the bank’s chief financial
officer Pahala Mansyuri said on Tuesday, Dow Jones reported.
In 2007, the bank's net profit was Rp4.4 trillion.
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Total outstanding loans at end-December last year grew 26% to Rp165 trillion, he added.
Artha Graha posts 3.7% increase in net profit
PT Bank Artha Graha Internasional reported a 3.7% increase in net profit for 2008 from the
previous year, Asia Pulse reported.
Data from Bank Indonesia showed that the publicly listed bank recorded a 12.8% increase in net
interest income to Rp429.45 billion ($35.8 million) last year.
The improved financial performance of the bank was attributable to credit expansion with
outstanding credits rising to Rp9.85 trillion from Rp7.6 trillion, the data show, Bisnis Indonesia
reported.
POWER
Govt. disburses Rp500B for energy projects
The government on Monday disbursed Rp500 billion ($43.5 million) from its stimulus package to
expand electricity transmission, but an Energy Ministry official said Rp15 trillion was actually
needed to power the country, The Jakarta Globe reported.
Of the total figure, Rp425 billion will be used to power outlying areas in Nusa Tenggara, Sulawesi
and West Java, with the remaining Rp75 billion to finance biofuel plantations and village-level
renewable energy plants in 79 independent energy villages across the country, said Energy and
Mineral Resources Minister Purnomo Yusgiantoro.
“We expect that construction will be finished before the end of this year,” he said, adding that it
would create almost 15,000 new jobs. “It is one way of reducing unemployment amid the current
global recession.”
Waryono Karyono, secretary general at the ministry, said the construction of the plants in energyefficient villages would require about 7,600 workers, while the construction of electricity
transmission lines would absorb another 7,350 workers.
JBIC ready to finance W. Java power plant project
The Japan Bank for International Corporation (JBIC) has expressed a commitment to extend
$900 million in loans to increase the capacity of the Muara Tawar power plant in Bekasi, West
Java, state power company PT PLN president director Fahmi Mochtar said Monday, Antara
reported.
“With the expansion project, the power plant will double its capacity to 4,000 MW from the current
2,000 MW,” Mochtar said.
"The capacity can be doubled by installing more equipment on the existing generators and
increasing gas supplies," he said.
The expansion project is part of the government’s program to construct the second phase of
power plants with a combined capacity of 10,000 MW, he said.
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OIL & GAS
Tangguh LNG delivery may be pushed back again: Minister
The first delivery of liquefied natural gas (LNG) from the BP-led Tangguh project in Papua may be
delayed beyond an earlier target of May, Energy Minister Purnomo Yusgiantoro said on Friday,
Reuters reported.
"We may not make first delivery of LNG in May from Tangguh. We may deliver one cargo to
Fujian as a test," Yusgiantoro told reporters.
He said the government had sent a team to China to check whether the receiving LNG terminal in
Fujian was ready.
"They (China) need one cargo as a test. We can send a cargo from Bontang LNG plant,"
Yusgiantoro added.
He said Indonesia would not declare that Tangguh was on stream commercially until the
receiving terminal in China was ready.
Yusgiantoro also said the government would target more LNG for the local market.
Govt. agrees on LNG export cuts
Indonesia will agree to Japan, South Korea and Taiwan cutting their imports of liquefied natural
gas (LNG) up to 70% of their total contracts, Asia Pulse reported.
The three countries, which are facing a decline in LNG requirements, have long-term contracts
with Indonesia to import a total of 1.2 million tons in 18 cargoes of LNG a year.
Head of the Upstream Oil and Gas Regulator (BP Migas) Raden Priyono said the LNG could
instead be used for domestic industries.
State fertilizer factory PT Pupuk Iskandar Muda in Aceh could use up to nine cargoes and
liquefied petroleum gas (LPG) industry could take up to six cargoes, Priyono said.
Indonesia still needs a larger supply of gas to meet growing demand for urea fertilizer basic
material and other industries.
Earlier it was reported the three countries may sell part of the LNG they import from Indonesia to
other countries.
Hari Yulianto, the vice president of the state-owned oil and gas company PT Pertamina, said if
they fail to sell the LNG, the domestic market will have an opportunity for a larger supply of LNG,
Bisnis Indonesia reported.
Medco subsidiary eyes diverting gas to Batam
A subsidiary of PT Medco is planning to divert as much as 49 billion British thermal units of gas
per day initially planned for a power plant in Java to a power plant in Batam Island in Riau
Islands, an official at the Energy and Mineral Resources Ministry said on Thursday, The Jakarta
Globe reported.
“The gas may be diverted to supply a gas-fired power plant in Batam, but we haven’t decided who
will get the gas yet,” Evita Legowo, Director General for Oil and Gas at the ministry adding the
ministry would have to decide before May when the gas is to come on-stream.
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Legowo said the gas extracted from Lematang block in South Sumatra, operated by Medco E&P
Indonesia, may flow through a pipeline belonging to state-owned gas company, PT Perusahaan
Gas Negara and its subsidiary, PT Trans Gasindo Indonesia.
The destination options would be either to state power company PT PLN’s power plant in Batam
or to PT Dale Energy Batam, Legowo said.
“The receiver will have to pay for a [gas distribution] toll fee to the transporter and BPH Migas will
set the price of the fee.”
Infrastructure, such as pipelines for transmission and distribution to support gas supplies to power
plants, was limited, and the country relies heavily on PGN’s pipeline, Legowo said.
The ministry plans to invite upstream oil and gas regulating body BP Migas; BPH Migas, the
country’s downstream oil and gas regulatory body; PGN, as well as gas distributors, such as TGI
and PT Pertagas, a subsidiary of state oil and gas company PT Pertamina, to calculate how
much pipe the country needs for gas distribution networks.
“If we already know how much capacity the country needs for the pipe and the commercial
calculations are ready, there will be a lot of investors interested in building the pipe,” Legowo
said.
Bakrie to start building gas pipeline
PT Bakrie & Brothers will build a pipeline to deliver gas from an offshore field to a power plant
operated by the state electricity firm in Central Java, the energy minister said on Monday, Reuters
reported.
The diversified group, with interests in telecoms, plantations, property and energy, won the right
from the government in 2006 to pipe gas from East Kalimantan to Java, a distance of about 1,200
km.
Energy Minister Purnomo Yusgiantoro said this section of the pipeline would be about 200 km
and run from Java to the Muriah gas block in the Java Sea. "This is one section of the gas
pipeline from East Kalimantan to Java," he told reporters.
Malaysia's Petronas operates the Muriah gas block and has a contract to supply 145 billion
British Thermal Units (BTU) of natural gas a day for state-owned electricity firm PT PLN for 10
years.
Siddharta Moersjid, a company spokesman, confirmed that it would build the pipeline from Muriah
to the Tambak Lorok power plant in Central Java, but did not elaborate or give financial details.
Yusgiantoro said the gas pipeline from East Kalimantan was needed to secure gas supply to Java
in future.
Pertamina to give Petral oil tender rights
Oil product and crude tenders by state-owned oil and gas company PT Pertamina can be
conducted by its Singapore-based trading arm Petral after purchasing rights were removed from
a new unit, a company official said on Wednesday, Reuters reported.
"Pertamina had already asked Petral to do procurement and Petral can now certainly hold
tenders for Pertamina's needs for oil products and crude," said Toharso, Pertamina's corporate
secretary.
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Pertamina launched the new "integrated supply chain" unit in January to handle all purchases of
oil products and crude oil, rather than by its marketing and processing directorates, as part of
moves aimed at increasing efficiency and transparency.
But the company said last week the firm would give more power to Petral, while the new unit
would be relegated to being a think-tank.
A Pertamina source told Reuters last week that the new unit did not have enough market
experience for its role.
Some members of Indonesia's parliament had urged Pertamina to close the "integrated supply
chain" unit because they argued it added new bureaucracy in procuring oil products and crude oil.
Pertamina, which does not make public financial statements, has been criticized in the past for its
lack of transparency in its trading operations.
Total to build 200 fuel retail stations in Indonesia
Total SA, Europe’s third-largest petroleum company, plans to build 200 fuel retail stations in
Indonesia in five years, becoming the third overseas company to sell fuel in Indonesia,
Bloomberg reported.
“Current regulations have opened the opportunity to follow the tender to distribute subsidized
fuel,” Thierry Pflimlin, chief executive officer of Total’s Asia Pacific unit, said in Jakarta on
Monday.
"Indonesia is a big market in the region,” he said.
The Paris-based company plans to bid to sell subsidized gasoline and diesel next year, Pflimlin
said after the inauguration of the company’s first two retail outlets in Jakarta.
MINING
KPC agrees first major China coal deal
PT Kaltim Prima Coal (KPC) last week agreed its first major long-term deal to sell thermal coal to
China, with 1 million tons to be shipped in the first year, a top company official said on Tuesday,
Reuters reported.
"It is a long-term deal for supplying coal up to five years. In the first year we'll be supplying 1
million tons, in the second year it will rise to 2 million tons and will go up to 5 million tons," Evan
Ball, director of KPC, said on the sidelines of a mining conference in Singapore.
He did not give any details on prices, saying they were in line with current spot market prices.
KPC is a unit of the country's biggest miner, PT Bumi Resources. It produced nearly 40 million
tons in 2007, about a fifth of Indonesia's total output.
China imported over 11.5 million tons of Indonesian coal last year, accounting for more than a
quarter of its total.
Antam, Krakatau to invest $63.5M in iron ore project
Two state companies will invest Rp700 billion ($63.5 million) in an iron ore project in Batulicin,
Tanah Bumbu regency in South Kalimantan, Asia Pulse reported.
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Mining company PT Aneka Tambang (Antam) and unlisted steel maker PT Krakatau Steel have
established a joint venture company PT Meratus Jaya Iron & Steel to run the iron steel
processing plant.
Krakatau Steel has a 66% stake in the project and Antam has the remaining 34%, Bisnis
Indonesia reported on Friday.
The plant with a capacity 315,000 tons of sponge iron a year is expected to be operational in
2011, Antam president Alwin Syah Loebis said.
Krakatau Engineering, a subsidiary of Krakatau Steel, has been named contractor to build the
project, Loebis said, adding that work is already in progress in the project.
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