Indonesia Economy Forum

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Angkasa Pura II Scores Rp1.5t BII Loan for Airport Revamp
By Basten Gokkon on 09:19 pm Aug 12, 2014


Jakarta. State-owned airport operator Angkasa Pura II has secured Rp 1.5 trillion ($128.3 million) in loans from Bank Internasional Indonesia, one of the country’s largest lenders, to finance a Soekarno-Hatta International Airport revamp that will triple its passenger capacity.

Angkasa Pura II, signed a Rp 1.5 trillion loan facility agreement with BII on Monday, according to a statement obtained by the Jakarta Globe on Tuesday.

The loan facility, which matures in 10 years, is the airport operator’s first bank loan for the expansion project.

Angkasa Pura II plans to renovate Soekarno-Hatta’s three terminals in order to boost the international airport’s passengers capacity to some 60 million travellers from the current 22 million fliers by the end of the next decade.

“An estimated Rp 26 trillion is required for the [expansion] project ,” Tri S. Sunoko, Angkasa Pura II’s president director, said in the statement.

The ambitious, long-awaited endeavour includes the construction of Terminal 3 Ultimate, which is scheduled for completion next year and will serve as a port for the most technologically advanced commercial planes operating in the archipelago.

The airport operator, which controls 13 airports in the western part of Indonesia, also plans to build an integrated building connecting Terminal 1 and Terminal 2.

The all-in-one structure will house a shopping center, hotel, parking area, train station as well as an automated people mover, a mass transit system currently utilized by only seven airports across Asia.

“The time loan facility for Angkasa Pura II is in line with our humanizing financial services mission, which is BII’s real commitment to support the government’s efforts in improving infrastructure in Indonesia, including airport development to support air transportation and tourism,” said Taswin Zakaria, chief executive and president director at BII, in the statement.

Angkasa Pura II’s Tri said the company is in the process of seeking out more loans from other banks and non-banking financial institutions to finance its expansion project.

Angkasa Pura II Scores Rp1.5t BII Loan for Airport Revamp | The Jakarta Globe

 

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Trans-Sumatra Toll Road Set to Break Ground

By Tito Summa Siahaan on 07:55 pm Aug 11, 2014

Participants of the Tour de Singkarak pedal across Kelok 9 of Payakumbuh in West Sumatra last month. The government sets to build toll road across the island next month. (JG Photo/Afriadi Hikmal)

Jakarta. State Enterprises Minister Dahlan Iskan said the construction of a 2,700 kilometer toll road connecting provinces in Sumatra island was scheduled to break ground next month.

“The ground-breaking ceremony will be held on Sept. 9,” Dahlan said on the sideline of a meeting with Coordinating Minister for the Economy Chairul Tanjung on Monday.

The cost of construction is estimated at Rp 300 trillion ($23.6 billion).

Chairul said the project still awaits the presidential regulation, which will detail on the direct appointment for the toll road construction.

“We will schedule a cabinet meeting led by the president after Aug. 17,” he added.

As the construction of the toll road will be funded by the state budget, the president will have to stipulate the legal framework for the project to be developed.

According to the plan, the government will assign Hutama Karya to undertake the project as it is the only large state infrastructure firm not listed on the stock exchange.

Dedy Priatna, deputy for infrastructure at the National Development Planning Agency, said the government would focus its effort in the Trans-Sumatra toll road construction in two sections namely Medan-Binjai and Palembang-Indralaya.

The toll road will comprise 23 different sections.

Also in the meeting, Chairul said he had instructed the transportation ministry to undertake a feasibility study to look for a location to build a harbor as an alternative for Merak port, which connects Java with Sumatra.

“We want to improve the connectivity between Sumatra and Java,” he said. “I also instructed the public works ministry to deepen the port and ASDP [state-owned ferry operator] to buy bigger ships so that traffic between Merak and [Lampung’s] Bakaheuni can be more efficient.”

Bambang Susantono, the deputy to the transport minister, said Merak could no longer be expanded as there was no more land available near the port.

“The only alternative is to build a port in another location,” he added.

In related news, Achmad Gani Ghazali, the head of Toll Road Regulatory Agency (BPJT), was quoted by Investor Daily on Sunday as saying that another toll road in Sumatra, which will be 61.7 km long, is also set to break ground in September.

The toll road, which connects the North Sumatra capital Medan to the Kuala Namu International Airport in Deli Serdang, is estimated to cost Rp 6.37 trillion.

Land acquisition for the project already progressed to 78.75 percent.

The winning tender for the project is likely by a consortium of state companies, the only party that submitted an offer to the government.

Trans-Sumatra Toll Road Set to Break Ground | The Jakarta Globe

 

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LIVABLE CITY
Seven Indonesian cities most livable: Survey
Selasa, 12 Agustus 2014 | 10:56 WIB

JAKARTA. Balikpapan, Surakarta, Malang, Yogyakarta, Palembang, Makassar and Bandung have been named the country’s most livable cities in the 2014 Most Livable City Index, a survey by the Indonesian Association of Planners (IAP).

The survey, which was conducted in 17 cities across the archipelago, shows that 63.6 percent of overall respondents were satisfied with the cities’ quality of living, with Balikpapan, the business capital of East Kalimantan, rated the highest as 71.12 percent of its residents said the city was comfortable.

Audrie Napitupulu, 27, a communications staff member at a multinational company in Balikpapan, was surprised to find in her first few days in the city that foods, hangout spots and sports facilities there were comparable to those available in Jakarta, and were beyond her expectations.

“The quality of life is definitely higher [than in Jakarta]. Here you can do a lot more things in a day and the facilities are good,” said Audrie, who recently moved from Jakarta to Balikpapan, where foreign and domestic companies, mostly in the coal and oil sectors, have been carrying out business for dozens of years.

“As you take your first steps in the city at the airport, it becomes clear that Balikpapan [is livable].” Sepinggan Airport in Balikpapan was expanded last year due to overcapacity and renovations made more the airport modern-looking.

Separately, Indra Prasadi, 24, a Bandung-based architect, said a lot of aesthetic improvements had been made to the capital city of West Java, since Mayor Ridwan Kamil was elected to office in 2013.

“His background as a renowned architect has helped him transform Bandung into a much more interesting city,” Indra said. “For example, the establishment of themed city parks, such as Taman Jomblo [Single People’s Park] and Taman Musik [Music Park], which offer their own uniqueness.”

The city’s poor transportation system, however, remained a problem for most of its residents, he said. “I also regret the fact that Bandung, once famous for its groups of art deco buildings, is best-known as a shopping destination.”

Elok Kurniasari, 30, a private sector employee who has lived in Malang since she was a child, said the affordable cost of living in Malang was one of the most important aspects that made the city a comfortable place to live.

“Malang also has adequate public transportation that operates until very late at night,” Elok said. “Since Malang is now growing into a busier city, I really hope the administration improves the city’s transportation system soon.”

The survey, which involved a total of 1,000 respondents with a 2 percent margin of error, placed Malang in second place alongside Surakarta, following Balikpapan, with 69.3 percent of its respondents saying that the city was livable, higher than the national index of 63.6 percent.

IAP chairman Bernardus Djonoputro said that despite their “livable” status, the top seven cities still dealt with classic problems surrounding their transportation systems, infrastructure quality and high cost of living. “This survey is conducted to measure the residents’ quality of living, not to compare one city to another,” he said.

He said that in IAP’s studies in 2009 and 2011, almost half of Indonesian citizens felt their cities were not livable. “This year’s result is higher than our past results. But we could not use it as a comparison because we surveyed more respondents and cities this year.”

During the opening ceremony of the 24th Eastern Regional Organization of Planning and Housing (EAROPH) World Congress, Public Works Minister Djoko Kirmanto said the number of urban inhabitants had tripled in the last four decades. Metropolitan cities such as Jakarta, Surabaya, Bandung, Medan, Palembang and Makassar remain attractive for people from rural areas wishing to migrate.

Quoting Central Statistics Agency data, he said the number of people living in urban areas accounted for 49.8 percent of Indonesia’s total population of 237.6 million in 2010, and was estimated to grow to 68 percent by 2025. (Nadya Natahadibrata)


Seven Indonesian Cities Most Livable: Survey - Kontan Online

 

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Bali provides 24-hour medics in anticipation of ebola
Senin, 11 Agustus 2014 19:47 WIB | 835 Views

Photo document of passenger medical check at Ngurah Rai International Airport, Denpasar, Bali. (ANTARA/Nyoman Budhiana)

Denpasar, Bali (ANTARA News) - The health office of Bali Province has provided a round-the-clock medical team in Ngurah Rai International Airport to anticipate the possibility of Ebola virus transmission coming from the passengers, an official said here on Monday.

The medical team consists of doctors, nurses, and ambulances, head of the Balis health office Dr. Ketut Suarjaya noted.

"Every passenger arriving from areas exposed to Ebola cases will be examined. If symptoms of the disease are noted, the passengers will be immediately checked by the medics. The suspects will be isolated in rooms that have been prepared at the Sanglah general hospital, he explained.

According to him, the preparedness system is not only for Ebola virus, which is currently endemic in Africa. It has been running since when bird flu, SARS, and Mers-CoV outbreaks had been reported.

So far, no Ebola suspect has been reported in Indonesia.

"The Ministry of Health has urged to raise awareness, as currently Ebola is not only endemic in Africa, but is also found in Arabian countries. Therefore, it is necessary to increase awareness to the hajj and umroh pilgrims," Dr. Suarjaya added.

The health office has also informed people about the disease, in addition to keeping the surveillance officers on the field at all entrances of Bali, including ports.

"Not everyone who enters Bali via airport will be examined. The scanning will be done on only those arrive who from the areas prone to Ebola," he noted.

Suarjaya added that the scanner that has been installed at Ngurah Rai Airport can detect body temperature of a particular virus suffered by a person. The infection is usually indicated by an increase in body temperature. (T.KR-LWA/INE/H-YH/KR-BSR/F001)

Bali provides 24-hour medics in anticipation of ebola - ANTARA News

 

[MarveL]

TRANSPORTATION
MRT underground work starts
Rabu, 13 Agustus 2014 | 11:26 WIB

JAKARTA. Jakarta motorists may expect worse traffic conditions around Jl. Surdirman as MRT underground work started in earnest on Tuesday night.

After starting underground construction in Senayan and Setiabudi in South Jakarta, in July, and at Hotel Indonesia traffic circle and Dukuh Atas in Central Jakarta in April, the project contractor started further underground work in Istora Senayan and Bendungan Hilir on Tuesday night, resulting in the median strip being widened and closed for at least two years.

Traffic along the thoroughfare is expected to worsen further.

City-owned MRT project operator PT MRT Jakarta president director Dono Boestami has asked for residents’ understanding as they would be the ones most affected by the project.

“We are happy with the progress of the construction. On the other hand, we need residents’ understanding and support so that the project can progress in the way we want,” he said in a press release on Tuesday.

Dono, however, said that the number of lanes would remain the same as the project contractor had converted the green lane to an additional lane.

Dono explained that the first-phase construction of the Istora underground station would be carried out from Tuesday night until Aug. 25.

The phase will include paving the median strip, repainting the busway separator, turning the sidewalks into the slow lanes and relocating the fast lanes to the present slow lanes. The busway lanes will be relocated to two of the present fast lanes, while maintaining the busway’s exclusivity.

MRT Jakarta construction director M. Nasyir said that the process would be continued by building a guide wall and diaphragm wall. “The construction of the main structure of the station is scheduled to be completed by April 2016,” he said.

Meanwhile, commencement of the Bendungan Hilir underground station’s construction will be marked with the paving of the median strip and a traffic detour in the area.

Preparations will be carried out from Tuesday night until Aug. 20. “We will need a 30-meter-wide work area in the midpoint of the street,” Nasyir said.

As a consequence, the project contractor will dismantle a pedestrian bridge under the Karet overpass in the Setiabudi area, which will be carried out from Friday until Wednesday. “Pedestrians can temporarily use the pedestrian bridge in front of the Le Meridien hotel,” he said, adding that during the dismantlement, the Jakarta Traffic Police would apply one lane of contra-flow traffic in the area.

“We are working together with the Jakarta Traffic Police and the Jakarta Transportation Agency to organize traffic in order to minimize the impact,” he said.

Jakarta Transportation Agency head Muhammad Akbar said the authorities would relocate the fast lanes to the slow lanes to provide ample space for construction work. “We will close the actual fast lanes on both sides of the road,” he said.

Even though the authorities will maintain exclusive lanes for Transjakarta buses on each side of the rood, in some parts of thoroughfare, Transjakarta buses will have to share a lane with other vehicles.

As a result, travel time for Transjakarta buses serving Corridor 1 plying Blok M–Kota will inevitably be extended by about seven minutes to more than 20 minutes.

There will be six underground MRT stations along the thoroughfare; Senayan, Istora, Bendungan Hilir, Setiabudi, Dukuh Atas and the Hotel Indonesia traffic circle. The tunnel boring machine will arrive next year. (Sita W. Dewi)

MRT Underground Work Starts - Kontan Online

 

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President Yudhoyono hopes to reinforce US, RI relations
Selasa, 12 Agustus 2014 14:50 WIB | 627 Views

President Susilo Bambang Yudhoyono (right) and US Senator John McCain (ANTARA FOTO/Widodo S. Jusuf)

Jakarta (ANTARA News) - President Susilo Bambang Yudhoyono was optimistic of further strengthening multi-level cooperation between Indonesia and the United States, including economic and political areas.

"I hope we can further promote better cooperation," the president stated while receiving US Senator McCain at the Presidential Office here on Tuesday.

At the start of their meeting, President Yudhoyono welcomed him for the second time after the two figures had previously met during the Shangri-La Dialogue in Jakarta several years ago.

President Yudhoyono noted that in the past meeting with the US senator several years ago, he discussed efforts to reinforce bilateral relations with the United States and regional as well as international issues.

Now, according to the President, security in the world is being disturbed by several conflicts such as those in Syria, Libya, Palestine, and Ukraine.

Yudhoyono also expressed gratitude for the strong cooperation between the two nations in fields such as the trade, maritime, and marine sectors.

Earlier, Minister of Marine Affairs and Fisheries Sharif Cicip Sutardjo remarked that the US government supported the development of the marine and fisheries sectors in Indonesia.

"The United States supported the development of the marine and fisheries sector in Indonesia, among others, through the Indonesian Marine and Climate Support (IMACS) and the Marine Protected Areas Governance (MPAG) projects," the minister asserted.

Minister Sutardjo made the statement while receiving US Senator Sheldon Whitehouse from Rhode Island in Jakarta on Sunday.

According to Sharif, the significant results of the IMACS project included reinforcement of sustainable fishery management and capacity-building in reducing illegal, unreported, unregulated (IUU) fishing practices.

The minister explained that the Ministry of Marine Affairs and Fisheries had an opportunity in 2013 to participate in the fishery management training held at the Rhode Island University of the United States financed by the IMACS.

"The training has strengthened the Ministry of Marine and Fisheries Affairs in assessing and formulating fishery management plans. The programs important achievement is the launch of Regional Fishery Management Plan of Fishery Management 718 in February 2014," he added.

(A014/INE/o001)
EDITED BY INE
(T.SYS/A/KR-BSR/O001)

President Yudhoyono hopes to reinforce US, RI relations - ANTARA News

Telkom to invest US$200 million in Silicon Valley
Rabu, 13 Agustus 2014 18:33 WIB | 461 Views

PT Telkom president, Arief Yahya. (ANTARA)

Bandung, W Java (ANTARA News) - State telecommunications company PT Telkom said it will invest US$200 million in venture capital business in the Silicon Valley in the United States.

Telkom would team up with a number of venture capital companies to tap the highly profitable digital creative industry in Silicon Valley, its president Arief Yahya said here on Wednesday.

Telkom will expand business entering the business area of a number of world class companies operating in digital creative industry, Arief added.

He said digital creative companies in Silicon Valley have large business value exceeding the business value of Telkom.

He said digital creative industry in the Silicon Valley accounts for 21 percent of the US GDP.

Google, and Facebook are among digital creative companies based in the Silicon Valley, he said.

With the investment of US$200 million in venture capital, Telkom hope to gain from the highly potential business, he said.

Telkom would enter the Silicon Valley through Telkom Metra , a subsidiary operating in the portfolio of information-media-edutainment.

Telkom Matra will team up with technology companies such as Fenox Venture, which has many start-up like SiceCar, Lark, META, ShareThis, 99co, and TechInAsia.

The investment is expected to help meet the target of Telkom that international business operation would contribute 10 percent to its income in 2015, Arief said.

(AS/F001)

Telkom to invest US$200 million in Silicon Valley - ANTARA News

Tax receipt reaches rp548.1 trillion - (d)
Selasa, 12 Agustus 2014 12:32 WIB | 593 Views

Jakarta (ANTARA News) - The countrys tax receipt until August 8, 2014 has reached Rp548.1 trillion or 51.11 percent of the target set at Rp1,072.4 trillion set in the revised 2014 state budget, the Directorate General of Tax Affairs said.

In a release, the directorate general said the tax receipt in the first half of this year was bigger than the tax revenue in the same period a year earlier which stood at Rp499.8 trillion or 50.22 percent of the target set in the state budget.

It said that of the Rp548.1 trillion, Rp275.5 is non oil and non gas income tax, which is 56.7 percent of the target at Rp485.97 trillion and Rp223.9 trillion are sale and luxury good taxes or 47.1 percent of the target in the state budget at Rp475.58 trillion.

It also included Rp1.05 trillion of building and land tax or about 4.8 percent of the target at Rp21.7 trillion.

Some Rp2.9 trillion tax receipt in the first half of the year was other taxes or 57.3 percent of the target at Rp5.17 trillion while Rp44.5 trillion is oil and gas income tax or 53.04 of the Rp83.8 trillion target.

Earlier, Finance Minister Chatib Basri stressed the importance of expanding the tax base so that efforts to collect taxes would not be focused on traditional sectors only such as mining, and other commodities like crude palm oil (CPO).

He said expansion of tax sources should be carried out on sectors which so far had not yet been exploited optimally such as the property, financial and service sectors, thus the year-end tax target would be achieved.

"There are several sectors which experienced high growth such as property, finance, transportation service and communications. We have to realize that though these sectors have been tapped yet it is not yet optimal," the minister said.(*)

Tax receipt reaches rp548.1 trillion - (d) - ANTARA News

 

[MarveL]

Govt Pledges Incentives For Private Oil Refineries
Lukas Hendra TM - Wednesday, August 13 2014, 5:13 pm

JAKARTA – Ministry of Energy and Mineral Resources (ESDM) opens opportunity to the investors who want to build their own refineries and pledges to provide the same incentives as contained in the public private partnership (KPS) scheme.

Director General of Oil and Gas at Ministry of ESDM Edy Hermantoro said the same incentives would be offered to the investors who would build the refineries in order to have economic value.

The only thing that differentiates it to the PPP is that the government will not provide land to the investors who want to build the refineries.

“If the investors have their own land, we will offer the same incentives with the KPS refineries in order to have an economic value,” he said, Monday (8/11/2014).

The offer will be applied once the private companies build the refineries which produce oil and fuel and petrochemicals. According to him, Indonesia’s failure on new refineries was caused by the non economic value.

Meanwhile, Indonesia needs to have two new refineries to overcome oil fuel (BBM) deficit of 608,000 barrels per day.

Based on Indonesia Business Daily data, Indonesia’s refineries capacity currently reaches 1,1157 million barrels per day while the oil production which could be processed in the country reaches only 649,000 barrels per day.

In practice, the need of domestic oil fuel reaches 1,257 million barrels per day.

Ministry of ESDM predicted that Indonesia’s refineries capacity may reach 1,167 million barrels per day in 2015 with the oil production of 719,000 barrels per day.

In that year, the need of BBM may reach 1,359 million barrels per day with the deficit of 640,000 barrels per day.

Govt Pledges Incentives for Private Oil Refineries | Current Issues - Bisnis.com

 

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Japan’s Sumitomo Secures Ulubelu Geothermal Contract From Pertamina

A file photo shows a power plant supported by geothermal energy belonging to Pertamina Geothermal Energy in Kamojang on April 22, 2010. (AFP Photo/Adek Berry)

Jakarta. Japanese trading house Sumitomo announced on Wednesday that it has won an engineering, procurement and construction, or EPC, contract for Pertamina’s geothermal power plant project in Lampung.

The 110-megawatt Ulubelu Geothermal Power plant will be constructed by Sumitomo together with the company’s local partner, state-owned engineering firm Rekayasa Industri.

The plant will comprise of two separate units, namely unit three and unit four, as part of the largest geothermal plant complex in the area.

“Construction of [unit 3 and unit 4] should be completed by July 2016 and July 2017 [respectively],” the company said in a statement on its website.

The complex already comprises of two geothermal plants with a combined capacity of 110 MW.

Pertamina had secured $300 million in loans from the World Bank in 2012 to finance several geothermal projects, which include the Ulubelu plant.

Pertamina Geothermal Energy, a subsidiary of Pertamina, aims to increase its geothermal capacity to 847 MW by 2018, from a current capacity of 402 MW.

A further objective for Pertamina Geothermal is to boost the generation capacity to 2,300 MW by 2025 as part of a larger mission to turn Pertamina into a regional energy champion. Indonesia currently exploits only 5 percent of its 29,000-MW geothermal potential.

The government recently raised the selling price for electricity produced from geothermal power plants to between 11.5 cents and 29 cents per kilowatt hour, from the previous 10 cents-18.5 cents.

Indonesia hopes to have renewable energy make up 23 percent of Indonesia’s energy mix, with geothermal alone expected to contribute 12 percent. State-utility firm Perusahaan Listrik Negara said at least $77.3 billion in investment would be needed to add 13,000 MW of renewable energy to the country’s supply by 2021.
Japan’s Sumitomo Secures Ulubelu Geothermal Contract From Pertamina | The Jakarta Globe

Indonesia Holds Firm on Ore Ban Amid $18 Billion Investment

on 12:32 pm Aug 13, 2014

Trucks are parked at Newmont’s Batu Hijau mine. Work has been idled since June 2014, when Newmont declared force majeure after it filled its warehouses with concentrates. (Antara Photo/Ahmad Subaidi)

Indonesia’s ban on ore exports will remain in place under the next government as the curbs spur as much as $18 billion in investment in processing plants by 2017, said the Energy and Mineral Resources Ministry. Nickel climbed.

Mostly Chinese investors are planning at least 64 facilities to process nickel, bauxite and other metals, R. Sukhyar, director general of mineral and coal, said in an interview. Investments reached $4.9 billion so far this year, said Sukhyar, who’ll keep his post in the new administration.

Nickel is the second-biggest gainer among commodities this year after the largest mined producer barred ore exports to compel investments in local processing. The maintenance of the ban after presidential elections last month is pivotal to predictions for further price increases from banks including BNP Paribas. Joko Widodo, the Jakarta governor elected to succeed Susilo Bambang

Yudhoyono, and Prabowo Subianto, who challenged the result, say they’ll keep the ban, said Sukhyar.

“It’s important to maintain the policy,” Sukhyar said on Aug. 11 in Jakarta. “Investors have made it clear to the government that they don’t want any change in policy because it could damage all their investments and they would lose trust.”

President Yudhoyono prohibited ore exports from Southeast Asia’s largest economy in January in a wager that investment and higher prices would more than offset job cuts and lost revenue from unprocessed shipments over time. The curb will shift the global nickel market into a deficit next year for the first time since 2010, according to Morgan Stanley.

Price outlook

Nickel, used to make stainless steel, rallied as much as 56 percent this year to $21,625 a metric ton in May. Futurestraded 0.2 percent higher at $18,788 a ton on the London Metal Exchange at 6:03 a.m. in London, climbing for a third day. The price will stay above $18,000 this year, said Sukhyar.

“When the ban was first brought in, people were a bit skeptical that it possibly wouldn’t last that long,” James Glenn, an economist at National Australia Bank, said from Melbourne on Wednesday. “It’s definitely become clear that this is something that’s going to be in place for a while to come.”

A jump to $25,000 is plausible, according to Stephen Briggs, a metal strategist at BNP Paribas in London, whose outlook was conditional on the maintenance of the ban. Nickel was listed by Societe Generale SA among its top picks for this half as the curb was seen moving the market to shortages.

‘Same view’

Joko and Prabowo “shared the same view and acknowledged the importance of value-added processing and for us not to export raw materials anymore,” said Sukhyar, who was appointed to his post in December and has been working at the ministry since 1979. Yudhoyono’s term ends in October.

Jusuf Kalla, Joko’s running mate, said in June during the contest for votes that they would keep the ban, a stance that was further supported by campaign documents. Prabowo would retain the ban should he become president, his brother and financial adviser, Hashim Djojohadikusumo, said on June 6.

Investors will build 30 nickel smelters that will process about 20 million tons of ore when all of them start production in 2017, Sukhyar said. Before the ban, most unprocessed nickel ore was shipped direct to China to make nickel pig iron, a cheaper substitute for the refined metal.
Nickel demand will outstrip supply by 97,100 tons in 2015, according to Morgan Stanley, while Goldman Sachs Group sees a 200,000 ton deficit next year. The ban will cut mined output in Indonesia to 8.9 percent of supply from mines in 2015 from 29 percent last year, Morgan Stanley said in a July 8 report.
“You can expect to see the market move more into a reasonably significant deficit toward the end of this year and into next year,” said Glenn. “That’s going to see renewed support for the nickel price.”

Commodity and Number of Planned Processing Plants
Nickel 30
Bauxite 5
Iron 7
Manganese 3
Zircon 13
Lead and Zinc 2
Kaolin and Zeolite 4
Total 64
Source: Energy and Mineral Resources Ministry

Bloomberg
Indonesia Holds Firm on Ore Ban Amid $18 Billion Investment | The Jakarta Globe

 

[MarveL]

Motorcycles Sales Volume May Reach 10 Million Units
Dini Hariyanti - Wednesday, August 13 2014, 6:08 pm

JAKARTA – The sales of motorcycle may reach more than 10 million units per year.

According to Chairman of Motorcycle Industry Association (AISI) Gunadi Sindhiwinata, the total number of motorcycle in Indonesia currently reaches 80 million units. The market may continue to increase up to 10 million -12 million units per year.

“The motorcycle market may continue to develop and grow in the next 10-15 years. People would still need motorcycles until the position is replaced by cars,” he said in Jakarta, Wednesday (8/13/2014).

During the first half of 2014, the motorcycles sales grew by 7.02% year-on-year to 4.2 million units from 3.9 million units in the same period of last year.

The motorcycles market is considered more stable in the second half in view of the improving business condition. However, the Eid ul Fitr holiday in July 2014 still affected the sales volume.

Motorcycles Sales Volume May Reach 10 Million Units | Current Issues - Bisnis.com

 

[MarveL]

POWER PLANT
Java, Bali to face power crisis soon
Kamis, 14 Agustus 2014 | 10:03 WIB

JAKARTA. Java and Bali, the country’s economic hubs, are heading for an electricity crisis earlier than many had predicted as delays in the operation of several key power plants are expected to curb supply amid soaring demand by industry.

State power company PT PLN warned on Wednesday that the decline in the electricity reserve margin in the Java-Bali area would reach an alarming level in 2016, earlier than a previous forecast of beyond 2018.

PLN director for construction Nasri Sebayang said the reserve margin was currently hovering at 27 percent, already lower than the ideal level of 30 percent.

“The margin will continue to drop significantly as there is no significant supply from new power plants while demand keeps on rising at a rapid pace,” Nasri said.

According to the company’s projections, the margin in Java-Bali will plunge to 18 percent in 2015 and to 16 percent in 2016 and 2017.

Given such low margins, PLN might have to implement rolling blackouts.

“It’s going to be a crisis. We have to be careful as it will occur in 2016. We have 6,000 megawatts [MW] of power-plant projects that are supposed to be operational, but most of them have been delayed,” Nasri said.

The delayed projects, according to Nasri, include three coal-fired power plants with a combined capacity of 3,000 MW in South Sumatra — supposed to be on stream to supply Java in 2017.

Sluggish progress in the completion of the so-called high voltage direct current (HVDC) transmission network that connects Sumatra and Java is blamed for the delays in the plants’ operation. “The transmission has already been delayed for one year,” said Nasri.

Other delayed projects include a 2x1,000-MW coal-fired power plant in Batang in Central Java and a 1,000-MW coal-fired plant in Indramayu, West Java.

The delay in the Batang power plant, financed and operated by a consortium led by Japanese companies, has severely impacted future power supply in Java as its first phase of operation has been pushed back from its initial target of 2016.

Set to be Southeast Asia’s biggest power plant, the Batang project has long been stymied by land-acquisition problems.

Many of the country’s major infrastructure projects have run into the sand due to protracted land-acquisition procedures. Landowners have regularly held out, refusing to sell unless investors pay considerably inflated prices.

The Java-Bali electricity system had 31,456 MW in installed capacity as of the end of July.

Demand in the area is estimated to increase at more than 7 percent annually on growing expansion of manufacturing facilities, particularly in the cement, textile, consumer goods and automotive sectors.

Additional power supply for Java and Bali by 2016 will be limited to several projects, including the 2x350-MW Tanjung Awar-Awar power plant in Tuban, East Java, the 660-MW Adipala power plant in Cilacap, Central Java, and the 2x600-MW expansion of an independent power producer plant, also in Cilacap.

However, given the planned capacity, the supply cannot replace the delayed 6,000-MW projects.

The director general for electricity at the Energy and Mineral Resources Ministry, Jarman, said that the government had been prepared to anticipate a shortage of 2,000 MW supply due to the delays in the Batang project.

“We will expand the capacity of several power plants. This includes the expansion of the gas-fired plants in Muara Karang and in Tanjung Priok in Jakarta, which will have 800 MW in capacity each. Another one is the Muara Tawar plant [in Jakarta] with 400 MW,” he said.

He added that the expansion of the Cirebon power plant with a capacity of 1,000 MW would also contribute to additional supply. (Raras Cahyafitri)

Java, Bali To Face Power Crisis Soon - Kontan Online

 

[MarveL]

Thursday, August 14 2014, 3:17 PM
JOKOWI To Expand Green Open Space in Jakarta

JAKARTA – Jakarta Provincial Government plans to tear down buildings that only consist of 3 or 4 levels to expand green open space (RTH) in the Capital region.

Jakarta Governor Joko Widodo said it’s the provincial government’s first step to build Jatibaru Technical Office Building to be used as an office by the three agencies, the Transportation Agency, Building Control Agency, and the Public Works Agency.

"Later all buildings, not only Provincial Government, that have only 3 to 4 floors are joined to become high rise everything," said Jokowi while attending the Topping Off of the Jatibaru Technical Office Building Project, Thursday (08/14/2014).

After Jatibaru Technical Office Building is completed, the old buildings which are still used by all three agencies will be torn down and built a garden in the former building lands.

Jokowi also wanted to the 16-storey tall building as a pilot building in the Capital. Roads in the building complex will not be coated with asphalt, but rather used paving block for water catchment.

"There is also a water treatment in this building, so rain water can be reused instead of wasted away. There is also a seepage well,” he continued.

JOKOWI To Expand Green Open Space in Jakarta | Business - Bisnis.com

 

[MarveL]

Govt tightens visa screening to prevent Ebola
Kamis, 14 Agustus 2014 | 14:15 WIB

JAKARTA. On the heels of the Ebola outbreak in Africa and suspected cases in Saudi Arabia, the government has tightened the screening of visitors from the regions at embassies and international gateways.

The precaution was taken following a warning issued by the World Health Organization (WHO) on the potential of the spread of the lethal virus worldwide.

The Ebola outbreak, the biggest in history, has killed more than 1,000 people in Nigeria, Guinea, Sierra Leone and Liberia. While the Saudi Arabian Health Ministry said a dead Saudi man had tested negative for Ebola, hundreds of others are suspected of having caught the illness, which causes horrific suffering, including bursting blood vessels and bleeding from ears and other orifices.

The WHO has declared the outbreak “a public health emergency of international concern” and recommends countries take preventive measures, such as strengthening surveillance at airports and issuing travel advisories.

Health Minister Nafsiah Mboi said on Wednesday that the government had alerted its embassies in Saudi Arabia and Africa to be cautious when issuing visas.

“We have boosted surveillance and awareness. Those coming from and going to those countries, particularly Saudi and Nigeria, need to be watched,” Nafsiah said at the State Palace.

“The Law and Human Rights Ministry [which oversees immigration offices] has said that visa issuance will be tightened and [potential visitors] will be required to go through health checks.”

The ministry has also alerted medical offices at seaports and airports, while its biological laboratory, which has tight security, is ready to check anyone suspected of carrying the Ebola virus into the country.

In spite of calling on residents to remain alert, Nafsiah said people should not worry since Indonesia, as a WHO member, was familiar with measures to prevent and handle Ebola.

Having first appeared in a village near the Ebola River in the Democratic Republic of Congo and a remote area in Sudan in 1976, the Ebola virus is spread to people by contact with the skin or bodily fluids, such as sweat, saliva and blood.

Patients infected with the virus usually experience flu-like symptoms.

There is no vaccine, no treatment and the disease is almost always fatal.

Although the country has yet to issue a travel advisory, Foreign Minister Marty Natalegawa said the ministry and Indonesian Embassy in Nigeria had prioritized efforts to prevent Ebola entering the country.

“I believe that the WHO advisory has been circulated and [we] have asked our embassy in Nigeria to raise people’s awareness and to report to us,” Marty said.

Indonesia, Marty added, had even called for international cooperation between East Asian countries, centering on air transportation and health workers, during last week’s East Asia Summit ministerial meeting in Naypyidaw, Myanmar.

During an event aimed at raising awareness of Ebola among medical officers and representatives of hospitals across the city, Jakarta Health Agency head Dien Emmawati said that although the chance of the virus entering the country was small, preventive actions had to taken.

“The thermal screening test equipment at Soekarno-Hatta International Airport and Tanjung Priok Port have been activated,” she added.

According to Dien, her agency had also issued a circular to hospitals, clinics, community health centers (Puskesmas) and other health facilities on information about the virus and how to properly treat infected patients.

A number of those who have contracted the virus in Africa are, in fact, doctors and nurses of the patients. (Ina Parlina and Corry Elyda)

Govt Tightens Visa Screening To Prevent Ebola - Kontan Online

 

[Nike]

Telkom Sets $200m Investment for Indonesian Tech Startups
Telecommunications giant will also partner with Silicon Valley-basedventure capital firm Fenox Venture Capital

A man fixes a damaged gadget in his cell phone kiosk in Jatinegara, East Jakarta, in this August 2010 file photo. (JG Photo/Yudhi Sukma Wijaya)

Jakarta. Telekomunikasi Indonesia, the country’s largest telecommunications company, is setting aside $200 million in seed money to help finance local startup technology businesses.

The state-controlled company, also known as Telkom, has created Metra Digital Investama to help it in supporting innovation and new projects internally.

Metra Digital will operate under Telkom’s information and digital media subset Multimedia Nusantra (TelkomMetra).

“We hope that the CVC [corporate venture capital] development will help support the development of a nationwide creative industry, which eventually will contribute to the country’s economy growth,” said Arif Prabowo, vice president for public relations, in a statement on Thursday.

Telkom plans to use Metra Digital in spearheading innovative technology in the country while at the same time become an additional source of income for the group.

“We are currently scouting for which startup companies we want to invest in. We are also still discussing the targeted amount of startup companies,” Arif was quoted as saying by Investor Daily on Wednesday.

One of Indonesia’s well-known startups include online community forum site Kaskus.

Such liquid investment is often needed as a major helping hand for startup companies that are seeking financing to get their businesses up and running. Obtaining bank loans may be difficult for startups because they are viewed as high risk.

Private funding from companies like Telkom has also been the driver for research and development activities in the country due to the lack of funding for such activities from the government.

Government spending on research and development this year amounts to Rp 8 trillion ($684 million), or about half a percent of the state budget’s Rp 1,600 trillion. Experts argue that such a small portion is nowhere close as sufficient in supporting a strong and productive scientific community in the country.

Telkom already has two business incubator centers for startup entrepreneurs: Bandung Digital Valley, which is a partnership with local university Bandung Institute of Technology; and Jogja Digital Valley, which is a partnership with the Jogjakarta branch of the Indonesian Information Technology, Communication and Creative Industry (Mikti).

Telkom also said that it is planning to build another incubator center in Jakarta.

Every tech startup that enrolls in the program organized by Telkom’s incubators get to become a part of the company in developing digital businesses in the country.

Bandung-based Telkom said that it partnered with Silicon Valley-based venture capital firm, Fenox Venture Capital, to help Metra Digital in its operations.

“This initiative has made Telkom Indonesia become the first Indonesian company to expand to Silicon Valley,” Telkom said in the statement.

Founded in 2011, Fenox has invested in more than 37 startup companies globally, including free ridesharing services company Sidecar, technology news site TechInAsia and Singapore-based end-to-end property search website 99.co.

In Indonesia, Fenox has already allocated funds into such startup companies as online marketplace Bukalapak.com and online real estate market forum Urbanindo.com.

According to the statement, Fenox is keen to maintain investing in the country by also bringing in people from Silicon Valley who would mentor Indonesian entrepreneurs in developing their startups.

Telkom said in the statement that it will continue partnering with more venture capitalists from Silicon Valley — an area near the San Francisco Bay area that is home to many of the world’s largest technology corporations such as Google, Apple and Facebook.

“Learning how startups develop in Silicon Valley, there are several things to be learned by technology-based companies like Telkom. For instance, it needs innovation and must act like a startup to be able to continue growing. Telkom must explore to find new development sources in order to stay relevant and be the leader,” said Arif.

Telkom Sets $200m Investment for Indonesian Startups | The Jakarta Globe

 

[Nike]

Indonesian stock market
not ready to join ASEAN
Economic Community
Anggi M. Lubis, The Jakarta Post, Jakarta | Business | Fri, August 15 2014, 10:53 AM

Months ahead of the implementation of the ASEAN Economic Community (AEC), the Financial Services Authority (OJK) says the county’s stock market still faces a number of challenges that need to be addressed before entering the integrated regional economy, which include difficulty in allowing cross-border listing as it contravenes a prevailing law.

OJK commissioner for capital market supervision Nurhaida told reporters on the sidelines of the Indonesia Stock Exchange’s (IDX) 37th anniversary celebration on Thursday that the financial authority and the stock market had worked hard in preparing infrastructure for the upcoming regional economic integration.

Nurhaida said that some issues, however, took more time and effort to fix to prepare the stock market to join the regional financial market as it was not in line with the law.

The biggest challenge, Nurhaida said, was to open Indonesia’s stock market to foreign companies for listing.

“Once the AEC commences next year, foreign companies should be able to offer their shares on the IDX and to be listed on the bourse. Unfortunately, we don’t have a supporting regulation for the plan,” she said.

Nurhaida explained that the prevailing 1995 Stock Market Law did not have a stipulation enabling foreign firms to be listed on the country’s bourse, and in fact barred cross-border offerings.

“A stipulation in the law says that in order for a company to offer shares on the bourse, its prospectus must be audited by an auditing commission recognized by Indonesia’s financial authority. This is the main hurdle blocking foreign firms from entering our bourse,” she explained.

“The problem is, it is stipulated in our law. A change in the clause has to involve the House of Representatives, which means it is a political matter that might take more effort and time to address,” she went on.

While the stipulation hinders Indonesia from joining the integrated capital market, Nurhaida emphasized that many other ASEAN countries had yet to have such a supporting clause and to join the ASEAN Trading Link, which allows investors and companies to freely trade securities in any market at competitive prices.

So far, only three countries — Thailand, Singapore and Malaysia — have joined the trading community.

Indonesia still doubts the market-integration plan, arguing that it is not on par with the rest of the region.

IDX director Ito Warsito said that for the time being, the stock market would focus on enhancing domestic competitiveness in preparation to enter the integrated market.

Among the plans, he said, is to roll out Extensible Business Reporting Language (XBRL)-based financial reporting at the beginning of 2015, which is an electronic communication language universally used for business information exchanges and transmissions.

He said that the IDX and the OJK were mulling an electronic registration system, which would enable firms to apply online for an initial public offering (IPO), a procedure that is expected to cut costs and simplify the application process so that more firms could join the capital market.

The IDX previously modified its lot and tick sizes for traded shares in an attempt to boost market liquidity.

The Jakarta Composite Index (JCI) — the main barometer for the country’s bourse — and the bourse’s market capitalization have risen 19.43 percent and 24.8 percent year-to-date, respectively, the third-highest growth in the region after Thailand’s SET and India’s Sensex,

The bourse has set a target to have 30 firms listed this year, with 18 firms having registered their shares on the IDX to date.

Indonesian stock market not ready to join ASEAN Economic Community | The Jakarta Post

Govt to prioritize chemical,
metal industries
The Jakarta Post, Jakarta | Business | Fri, August 15 2014, 8:49 AM


Business News
The Industry Ministry is set to prioritize chemical and metal industries to better develop domestic industry competitiveness ahead of the implementation of the ASEAN Economic Community (AEC) in 2015.

The ministry’s manufacturing industry director general Harjanto said Thursday that the chemical industry was crucial as it was closely associated with a number of important sectors in the creative industry, such as food, clothing, construction and infrastructure.

“This industry also plays a big role as a basic material for many downstream industries like painting and coating, electronics and automotive,” Harjanto said on the sidelines of the Indonesia International Chemical (Inachem) Expo 2014 in Jakarta.

Meanwhile, in the metal industry, he said the ministry was committed to strengthening the country’s mining-based products program.

Such a program was aimed at driving the nation’s economy as it would give added value to products as well as provide job opportunities.

He said he hoped the exhibition, to be held on JI. Expo Kemayoran in Central Jakarta on Aug. 14-16, would not only develop the domestic industry but also invite new investors to Indonesia.

“We need expertise and capital goods, as well as investment from other countries,” Harjanto said, expecting the country to become an industrial powerhouse by 2025. In order to do so, industrial sectors must grow at a rate higher than the current economic growth rate of 7-8 percent, he implied.

The exhibitions were the Indonesia Chemical (INACHEM) Expo, the Indonesia Building, Mechanical and Electrical Expo, the Indonesia Steel Building and Metal Structure Expo and the Indonesia Steel Aluminum Expo.

The three-day expo features 243 domestic and overseas exhibitors and aims to attract 15,000 visitors, businesses, investors and consumers.

Govt to prioritize chemical, metal industries | The Jakarta Post

 

[MarveL]

Friday, August 15 2014, 10:30 AM
SBY SPEECH: The Gov’t Claims a Successful Effort to Keep Stable Economy

JAKARTA-The government claims to be able to maintain macroeconomic stability and high economic growth in the country.

President Susilo Bambang Yudhoyono or SBY in his annual presidential speech for the House said the development growth of Indonesia can be seen in the last decade, by looking at macro-economic conditions and economic growth.

"Macroeconomic stability is relatively good, although there are trials. Economic growth is quite high, " SBY said today, Friday (08/15/2014).

Indonesia's economic growth, he said to be at a high level among the G-20 countries, even the highest after China.

SBY SPEECH: The Gov’t Claims a Successful Effort to Keep Stable Economy | General News - Bisnis.com