Highlights
Politics
·         President Yudhoyono reshuffled his cabinet, bringing in five new figures
·         The new attorney general to seek extradition of corrupt bankers
Regions
·         Indonesia to urge WHO to establish new bird flu sample procedures
·         Indonesia and Singapore in joint bird flu project
Economy
·         Central bank governor says no concern over capital outflows
·         Privatization to be accelerated, says new minister
Business briefs
Macroeconomy
·         Bank Indonesia cuts its benchmark rate to 8.75%
·         Government to issue T-bill up to Rp2 trillion
Investment
·         Seven companies to join to build $1.5 billion fiber optic network
·         Railway sector opened to domestic and foreign investment
State concerns
·         Australia to assist transport safety improvements
·         Improvements in forest conservation, minister says
SOEs
·         Construction firm PT Adhi Karya forecasts 57% net profit jump
·         Merpati to Lease 10 Boeing 737-300s
Private sector
·         Net profit from listed companies up 27.4% in first quarter
·         Motorcycle sales increase by 15% in April
Banks
·         Credit disbursement raised by $1.86 billion in first quarter
·         Mitsubishi UFK looks to acquire second bank
Power
·         Singapore-based company to build four plants with total capacity of 380 MW
·         No risk from nuclear power plan, says nuclear agency head
Oil & gas
·         Tangguh project to seek alternative loans
·         Straits Asia Plans To Explore For Oil, Gas
Mining
·         New mining legislation in last stages of discussion in parliament
·         Indonesia Tightens Domestic Tin Trading

POLITICS
President Reshuffles Cabinet
President Susilo Bambang Yudhoyono on Monday (7/5/07) announced a new cabinet line up that saw seven changes and stressed a stronger approach to anti-corruption campaign.

The reshuffle saw five new figures ushered into the cabinet while two active ministers were moved to new portfolios.

"I aim to improve the effectiveness and performance of the cabinet in the next two-and-a-half years," Dr. Yudhoyono said in announcing the changes at the State Palace, The Jakarta Post reported.

The president conceded he did consult party leaders “but the final decision was my sole prerogative.”

Dr. Yudhoyono dismissed Justice and Human Rights Minister Hamid Awaluddin and State Secretary Yusril Ihza Mahendra, and replaced Attorney General Abdul Rahman Saleh with tough-minded career prosecutor Hendarman Supandji, who was deputy attorney general for special crimes and head of the team for the eradication of corruption.
Transportation Minister Hatta Radjasa was moved sideways to replace Yusril Mahendra, while Communications and Information Minister Sofyan Djalil was reassigned as state minister for state enterprises, replacing Sugiharto.
Former Surabaya Institute for Technology rector Muhammad Nuh takes over from Djalil at the information ministry.

Muhammad Lukman Edy, current secretary general of the National Awakening Party (PKB), becomes state minister for the development of disadvantaged regions to replace Syaifullah Yusuf.

Coming in as the new transportation minister is Jusman Syafei Djamal, former president of the state-owned aircraft manufacturer PT Dirgantara Indonesia and a current member of the National Transportation Safety Board.

The reshuffle was made after days of deliberation by the president, including one-on-one meetings with various ministers at his Cikeas, Bogor, residence.

New AG to Seek Extraditions
New Attorney General Hendarman Supandji took his first swing at corruption on Tuesday (8/5/07) as he moved to extradite 15 executives allegedly hiding millions of dollars in stolen state funds in Singapore.

Supandji said the business executives will be extradited under a treaty signed with its
neighbor last month. "There are 15 people. They are ready to be extradited," he was quoted as saying by Detikcom news website.

He declined to reveal names but the suspects are thought to include bankers who siphoned off state funds meant as cash injections to help ailing Indonesian institutions in the wake of the 1997 Asian financial crisis.

Indonesia has long sought the extradition treaty to chase down alleged corrupt officials and businesspeople from the time of former dictator Suharto, who stepped down in 1998.

Jakarta had accused Singapore of long delaying last month's treaty on fears Indonesian suspects would withdraw their money and shake up the wealthy island-nation's financial system and property sector.

Singapore has denied it was a magnet for laundered funds, saying adequate safeguards were in place to prevent such abuses.

Task Force Counts Success
A presidential task force tasked with tackling corruption cases at state-owned enterprises revealed on Friday (11/5/07) that they had managed to recover some Rp3.9 trillion ($441.5 million) in stolen money, The Jakarta Post reported.

"The team has already delivered Rp18 billion of the money to the state coffer and returned some Rp1 trillion to state-owned companies," new Attorney General Hendarman Supandji, the former head of the task force, told reporters. "The rest of the funds are in the form of cars and property. We are trying to secure those.”

He said he would brief President Susilo Bambang Yudhoyoino on the entire investigation process.

The 45-man, multi-agency task force, which was established by the president two years ago, officially ended its mandate on May 2 after tackling graft cases at the Religious Affairs Ministry, state-owned insurance Company PT Jamsostek, fertilizer company PT Pupuk Kaltim and telecommunications company PT Telkom.

Malacca Strait Report Criticized
Indonesia hit out at the International Maritime Bureau on Thursday (10/5/07) over a report that names its waters as the most dangerous in the world, The Jakarta Post reported.

Defense Minister Juwono Sudarsono said the IMB had deliberately attempted to undermine Indonesia’s competitiveness.

Sudarsono said the report also implied that the nation's security forces were incapable of maintaining law and order in the Malacca Straits, through which half of the world's oil
shipments travel.

"I am afraid that those numbers (are intended) to weaken our competitiveness. It was written as if our armed forces and police are incapable of maintaining order (in the straits)," Sudarsono told ElShinta radio. "They (piracy cases) decreased a lot last year.”

London-based IMB reported last month that Indonesian waters accounted for nearly a quarter of all pirate attacks in the first three months of the year.

The international maritime watchdog said attacks were declining in the area, but seafarers should remain on alert. It added that Indonesia should be applauded for its efforts to reduce the number of attacks.
Meanwhile Malaysia and Indonesia agreed on Thursday to step up cooperation to boost security along shared borders after successful patrols in the Malacca Strait, Agence France-Presse reported.

Malaysian Armed Forces chief Abdul Aziz Zainal said that since both countries had begun coordinated patrols, piracy incidents were sharply down in one of the world's most important and busiest waterways.

Abdul Aziz and Indonesia's Armed Forces chief Air Marshal Djoko Suyanto began talks on Thursday in Kuala Lumpur to map strategies to fight cross-border crime and terrorism.

"In terms of piracy incidences along the Malacca Straits, reports have declined by 99% since we started coordinated patrols at the straits," Abdul Aziz told reporters.

"In the past seven months we have only received one report of piracy along the Straits of Malacca and even then, it was a minor incident," he said.



 

Singapore, RI Team Up for Bird Flu Project
The Indonesian and Singaporean governments are joining forces to prevent and control bird flu outbreaks and human infections in Indonesia. The pact focuses on establishing a three-year pilot project worth Rp44.6 billion in Tangerang municipality, The Jakarta Post reported.
"This project originated from the high level of commitment of the leaders of Indonesia, Singapore and the US when they attended the APEC Economic Leaders Meeting in Busan, South Korea, in November 2005," Coordinating Minister for People's Welfare Aburizal Bakrie told the media.
The memorandum of understanding (MoU) on the project was signed by Bakrie and Singapore's Health Minister Khaw Boon Wan on Wednesday (9/5/07).
The largest part of the fund, Rp11.4 billion, will be for prevention and control, with Rp9.8 billion set aside for surveillance and outbreak response, Rp9.3 billion for case management, Rp4 billion for project contingency, Rp3.8 billion for laboratory diagnostics, Rp3.4 billion for public awareness, and Rp2.5 billion for project management.
Indonesia has also allocated Rp20 billion out of the 2007 state budget for the project. "The project will be implemented jointly by Indonesia and Singapore, while technical collaboration with the US is still being prepared," said Bakrie.
While the US did not sign the MoU, the executive chairman of the National Commission for Avian Influenza and Pandemic Preparedness, Bayu Krisnamurthi, said it would be involved in the project through the Regional Emerging Diseases Interventions (REDI) Center, the United States Agency for International Development and the United States Department of Agriculture.
Bird flu has spread to more than 55 countries around the world, with more than 300 people infected, and more than half of that number having died, said Boon Wan. Singapore will contribute a total of $1.5 million, of which $900,000 is a block grant and $600,000 is for equipment purchases.

Wood Smugglers Caught in C. Java
Central Java Police arrested three people believed to be the masterminds behind an attempt to smuggle eight containers of timber to Taiwan, Hong Kong, China and France through the Tanjung Emas Port in Semarang on Friday (11/5/07).

"We arrested them in Pasuruan, Malang and Surabaya," said Central Java Police Chief Insp. Gen. Dody Sumantyawan.

Dody said one of those arrested was the owner of the PT Dutanda Borneo Mandiri Timber logging company, located in Sayung, Demak, Central Java. "From preliminary investigations (we know) the timber originates from Sulawesi," he said.

The Central Java Forestry Office has resolved 10 of 13 timber smuggling cases from 2005.

Dody said one of the eight containers they discovered was filled with furniture and in accordance with its export documents. However, seven other containers were filled with timber in log and sawn form without proper documents. "Exports of sawn timber and logs are banned," said Dody.

The smugglers had intended to send the load of ebony to Taiwan, Hong Kong and China, where it is commonly used for religious rituals and sold at Rp7,700 per kg.

 
ECONOMY
No Concern over Outflows: Govt.
The central bank governor and Vice President Jusuf Kalla both played down Friday (11/5/07) concerns that a sudden outflow of hot money could cause a crisis, as the rupiah strengthened during the week against the US dollar.
Bank Indonesia Governor Burhanuddin Abdullah said the country’s banks were strong enough to weather currency swings, adding that the central bank may intervene to help smooth fluctuations in the currency, Reuters reported.
“Our economy is now in a much better position than before. Even if there is a reversal, it will not hurt institutions such as banks," Abdullah told reporters.

"If it fluctuates from 9,100 and let's say to 8,700, we'll let it be. But any fluctuations must not take place in just two-three minutes because that hurt corporates," Abdullah said.
Kalla also said foreign exchange reserves, which stood at $49.15 billion at the end of April, were sufficient. "Hot money is going out? We'll let it be. Our foreign exchange reserves are adequate," Kalla told reporters.
The rupiah fell more than 1.5% on Friday to around 8,845 per dollar after earlier gains against the US dollar took it to its strongest position for a year.
The rupiah’s rise was partly caused by short-term capital inflows that are continuing to push the Jakarta Stock Exchange composite index to new highs. The index closed trading on Friday at 2,022.297 after hitting new highs on two days during the week.

The new state minister for state-owned enterprises, Sofyan Djalil, appeared to be quick off the mark in his new job, indicating already approved sales of stocks in toll road operator PT Jasa Marga and in Bank Negara Indonesia (BNI) would go ahead soon.
He said a second public offering by BNI could take place as early as July, and his office named Danareksa Securitas and Bahana as the underwriters for a Jasa Marga float.
The government is currently awaiting parliamentary approval for its plan to sell stakes in 15 firms this year, aiming to raise Rp4.3 trillion ($487.9 million).  "It should be accelerated.  The stock market is booming right now.  It's a good chance for state firms to go public," Djalil was quoted as saying by Reuters.
In infrastructure, seven domestic companies agreed to join forces to build a $1.5 billion 34,000-km fiber optic cable network in the country. It is the first of 10 major infrastructure projects to get the green light from the private sector. PT Telkom will take the major role in the project.  
In a positive sign from the real sector, the Jakarta Stock Exchange announced that net profit posted by 315 publicly listed companies which have already announced their financial reports shot up 27.4% to Rp58.54 trillion ($6.5 billion) last year from Rp45.9 trillion in the previous year.
Motorcycles sales, an important measure of consumer confidence, rose about 15% in April from a year ago, industry data showed, as the sector continued to recover from the slump in 2006.
 

Govt. Plans to Issue Rp2t T-Bills - Official
The government plans to issue its maiden 12-month treasury bills on May 29, hoping to raise Rp2 trillion, a government official said Thursday (10/5/07).
The Finance Department’s director general for state debt management, Rahmat Waluyanto, said the government decided to reduce the size of the T-bill issue from the original plan of Rp3 trillion.  "We don't want over-reliance on T-bills," Rahmat was quoted as saying by Dow Jones Newswires.
The government also plans to issue long-term bonds on May 22 via a monthly auction to help finance the state budget deficit.

Consumer Confidence Up in April
Consumer confidence rose to a four-month high in April, amid stabilizing food prices, a central bank survey showed on Thursday (10/5/07).
The consumer confidence index, based on a survey of 4,650 households from 18 cities, rose to 95.7 in April from 93.3 in March.  However, a reading below 100 still means more consumers were pessimistic about the future than optimistic.
"It probably has to do with the recent decline in food prices and the overall deflation we experienced in April.  Naturally, consumers would be less pessimistic when prices are declining," Helmi Arman, economist at Bahana Securities, said, according to Reuters.
Annual inflation eased to 6.29% in April from 6.52% in March helped by stable rice prices.

Forex Reserves at $49.31b
The country’s foreign exchange reserves rose to $49.31 billion as of April 30 from $47.22 billion a month earlier, Bank Indonesia (BI) said Thursday (10/5/07).
Analysts said the increase is likely due to current robust exports and inflows into the Indonesian capital market.

INVESTMENT
Consortium to Build $1.5b Palapa Ring
Seven Indonesian companies will join forces to build a $1.5 billion 34,000-km fiber optic cable network in the country aimed at improving telecommunication infrastructure, a government official said.
The group will meet on Wednesday (16/5/07) to discuss how to implement and finance the Palapa Ring Project, said Basuki Yusuf Iskandar, Director General for Post and Telecommunication at the Office of the State Minister for Communication and Information.
"Seven companies have obtained the license for the Palapa Ring," Iskandar was quoted as saying by Reuters last Wednesday.  He said PT Telkom, PT Indosat, PT Excelcomindo Pratama, and PT Bakrie Telecom were among the seven in the consortium.
The Palapa Ring will open up telecommunication access to eastern Indonesia.
Telkom president director Rinaldi Firmansyah said the company will become the majority contributor to the project and lead the group as it would use most of the telecommunication traffic through the network. 
"We are still calculating the numbers, but all this time we are accounted for about 50% of the country's telecommunication traffic, so we are likely to invest about 50% of the project (cost)," Firmansyah told reporters.
"Financially we are ready," he said, adding that the company's involvement aims to strengthen its network in eastern Indonesia.
Excelcom president director Hasnul Suhaimi said the company's contribution to the project would be about 10% of the total value of the investment.  He said the fiber optic network could help reduce the telecommunication costs from the current system that incorporates satellites.

Train Services Opened to FDI
The government has opened its railway sector to domestic and foreign investors to spur development of the country's train network, Bisnis Indonesia reported on Tuesday (8/5/07).
Foreign investors can now own up to 95% of companies providing train services, the newspaper quoted Transportation Department Director General Soemino Eko Saputro as saying.
Saputro said the government decided to open the sector to foreign investors due to the reluctance of local investors.  State-owned PT Kereta Api is the sole provider of passenger train services in Indonesia, which are located mostly in Java.

STATE CONCERNS
Australia to Help Improve Transport Safety
The Australian government said it will spend A$24 million ($19.67 million) to help improve air and maritime safety in Indonesia, Australian Associated Press reported on Monday (7/5/07).
The two countries would work together to lift safety standards with a three-year package that will focus on training and technical assistance, with priority given to safety regulators, managers, investigators and air traffic controllers.
Australian Transport Minister Mark Vaile said the measures had been developed in close consultation with Indonesia to help address its "significant" transport safety challenges.  "It is important that we work together to address those areas which Indonesia itself has identified as safety priorities," he said.
The two countries were spurred on by the March 7 accident at Yogyakarta airport in which a Garuda airliner crash-landed and 21 people were killed, including five Australians.
"The Australian Transport Safety Bureau has been working closely with Indonesian authorities following the Yogyakarta tragedy... and the program will expand the cooperation between our aviation and maritime safety agencies," Vaile said. 

Forest Destruction Down – Minister
Forestry Minister MS Kaban said the rate of forest destruction in the country has dropped by as much as 90%, Antara reported on Monday (7/5/07).
"I admit forest destruction was rampant between 1998 and 1999 but it has been abating since 2003," he said after launching the "Indonesia Planting" campaign in Pakis Baru, Pacitan, East Java.
Kaban said the government has already done a lot to reduce the rate of forest destruction in the country.  He said it has reduced the tree-felling quota from 27 million cubic meters a year to only 8 million. 
He said the industrial forest area for exploitation to meet the needs of industry has also dropped from 27 million hectares last year to only 200,000 hectares this year.  The campaign against illegal logging has been conducted without letup so that the number of illegal logging cases had decreased from 3,000 last year to 916, he said.
"District heads and traditional groups have been stripped of the authority to issue tree-felling permits so that it is now more difficult for anyone to destroy forests," the minister said, adding that through the Indonesia Planting and Forest and Land Rehabilitation movements from 2003 to 2006, the country has been able to plant trees on 2 million hectares of land and will enable it to regreen another 2 million hectares this year. 

340,000 Workers Needed for Oil Palm Plantations
Implementation of the government's oil palm plantation revitalization program on 2 million hectares of land in 2007-2011 will require the employment of about 340,000 people, an Agriculture Department official said.
The department needs 298,000 people to work as oil palm farmers, 24,000 to work in the oil palm cultivation sector and 18,000 in palm oil factories, head of its human resources development division, Ato Suprapto, said recently, according to Antara.
The department would also need 637,500 people to work in public oil palm plantations covering 1.5 million hectares over the next five years.  "The revitalization program will hopefully make Indonesia the world's largest palm oil producer and exporter in 2012, " Suprapto said.

SOEs
Adhi Karya Sees Higher 2007 Profit
State construction firm PT Adhi Karya said it expects its 2007 net profit to rise 57% to Rp150.1 billion from Rp95.6 billion in 2006 on the back of stronger sales, XFN-Asia reported on Thursday (10/5/07).
In a statement, the company said it has targeted sales growth of 40% this year to Rp6.04 trillion, with its operating profit seen rising 46% to Rp368 billion.
It also said that to strengthen its working capital and refinance existing debt, it plans to sell Rp400 billion worth of bonds in June. 
Adhi Karya is also studying other opportunities to raise funds for new infrastructure projects, including a rights issue.
The company is expecting to win more government contracts this year, such as roads projects in Java.  As for its Engineering, Procurement and Construction (EPC) business, it said it expects to win a power plant deal, the Tarahan II project, which may cost $215 million.
It said its EPC division, in partnership with local and Chinese contractors, is also entering tenders for several other projects worth a combined Rp15 trillion.  These consist of power plant, crude palm oil (CPO), deck platform (offshore) and pipeline projects.
 

Merpati to Lease 10 Boeing 737-300s
State-owned airline company PT Merpati Nusantara Airlines (MNA) says it will lease 10 more aircraft this year to strengthen its fleet, Asia Pulse reported.

Merpati president Hotasi Nababan said Merpati will lease 10 Boeing 737-300 aircraft from a US leasing company.

Nababan said MNA, which serves mainly domestic flights, will open new routes to expand its operations.

Two aircraft are due to arrive in June to be followed by two more units every month until October.

Currently MNA has 30 aircraft, including 16 Boeing 737-200 and 737-300s and 14 Fokker -100 propeller aircraft.

PRIVATE SECTOR
Listed Companies Post 27% Increase in Net Profit
Net profit posted by 315 publicly listed companies which have already announced their financial reports shot up 27.4% to Rp58.54 trillion ($6.5 billion) last year from Rp45.9 trillion in the previous year, Antara reported on Monday (7/5/07).
Some 84 companies listed on the Jakarta Stock Exchange and Surabaya Stock Exchange, including state-owned telecommunications company PT Telkom, have yet to announce their financial reports for 2006.
Among the 315 companies, PT International Nickel Indonesia reported the largest net profit of Rp4.63 trillion or a 75.9% increase from the year before, followed by state bank Bank Rakyat Indonesia (BRI) with Rp4.26 trillion. 
Other companies reporting large net profit last year included Bank Central Asia (BCA) with Rp4.24 trillion, Astra International with Rp3.71 trillion and cigarette maker PT HM Sampoerna with Rp3.53 trillion. 
Telkom, the country's largest telecommunications company, however, is believed to maintain the lead as in the first three quarters of last year it posted Rp9.2 trillion in net profit.  In 2005, its net profit was Rp7.99 trillion.

Indonesia Tallies 18 Million Micro-Businesses
Indonesia has 18,933,701 micro-businesses, accounting for 83.2% of the total number of 27,737,314 enterprises, an economic census conducted by the Central Bureau of Statistics (BPS) in 2006 showed.
The country has 3,594,254 small businesses (15.8%); 152,789 medium businesses (0.7%); 44,038 large businesses (0.2%); and 2,532 unclassified businesses (0.1%), BPS director Nursinah Amal Urai told a recent seminar, Antara reported on Monday (7/5/07).
The census found that 10,297,908 or 46.3% of the total number were engaged in wholesale and retail trading, while 3,220,156 (14.2%) in processing industries, 3,015,208 (13.3%) in transportation and warehouse services, and 2,702,574 (13.3%) in the communication sector.
Urai said the business sector in Java accounted for 60.13% of national economic activities.  Three provinces which made the largest contributions to the national economy were Jakarta (17.48%), East Java (15.18%) and West Java (14.55%). 
Other provinces whose contribution to the national economy had reached 1% or more were Central Java (8.47%), Banten (3.44%) and Yogyakarta (1%).
The data also showed that Java’s contribution to the national economy had continued to grow in the past five years, Urai said. Java's contribution to the national economy was recorded at an average of 59.32% in 2000-2005, which increased to 60.13% in late 2005.

April Motorbike Sales Seen Up 15%
The volume of sales of motorcycles rose about 15% in April from a year ago, industry data showed, as the sector continued to recover from a slump in 2006.
Data from three major manufacturers, obtained by Reuters from an industry source on Tuesday (8/5/07), showed Honda, Yamaha and Suzuki, which control more than 98% of domestic sales, jointly sold 307,877 motorcycles in April, up 15.29% from a year ago.
Sales of Honda Motor Co declined by 1.27% to 138,434 units while sales volume of Yamaha Motor jumped 37.52% to 128,270 units compared to a year ago.  Suzuki Motor booked an increase in sales of 22.64% from a year ago to 41,173 units.  Honda reclaimed its top spot again in terms of monthly sales volume after losing it to Yamaha in March, the data showed.
Motorcycle sales, seen as barometer of economic activity, fell by nearly 13% last year after authorities more than doubled domestic fuel prices in October 2005.  Sales hit a record high of nearly 5.1 million units in 2005 and analysts expect them to top 5 million units again this year, as interest rates decline.
Meanwhile total sales of new passenger and commercial vehicles rose 4.2% on month to 35,338
units in April, industrial data showed Friday (11/5/07), Dow Jones Newswires reported.

On year, April sales rose 57%, according to data compiled by the Indonesian car maker association Gaikindo.

Toyota vehicles, which are assembled and marketed by PT Astra International, led the market during the January-April period, with 42,593 sold, followed by Suzuki with 16,201 vehicles sold.

TVS Ready to Produce Motorcycles
Indian motorcycle maker TVS is set to produce various types of motorcycles for the Indonesian market at its recently completed assembly plant in Karawang, West Java, the company's chief executive officer for Indonesia said, according to Asia Pulse.

TVS has invested $45 million in its plant which had a production capacity of 300,000 units per year, BLP Simha, president director of PT TVS Motor Co Indonesia, said Thursday (10/5/07).

"We will begin by utilizing 40% of our plant's production capacity in the first year and increase the figure to 80% cent in the following three to four years. We also plan to raise our investment to $100 million," he said after a meeting with Industry Minister Fahmi Idris.

He said Indonesia's motorcycle market was estimated to grow by more than 15% in 2007. "The market is growing well. We hope it will keep on growing. We would not be surprised if it grew two-fold over the next five years," he said.

BANKS
Banks' Outstanding Credits Increase
Banks disbursed Rp16.7 trillion ($1.86 billion) in new credits in the first quarter of the year, bringing the total outstanding credit to Rp843 trillion by the end of March, Antara reported on Wednesday (9/5/07).
The new credits pushed up the loan-to-deposit ratio (LDR) to 65.3% from 64.7% by the end of last year, data from Bank Indonesia (BI) showed.
Central bank spokesman Budi Mulya said improvement has been recorded in the performance of the country's banking industry.
Though the intermediacy role is not yet implemented as expected, credit expansion in the first three months of the year exceeded the position in the same period last year.
Mulya said Indonesian banks should start reducing their interest rates after the central bank further cut the BI rate to 8.75% from 9%.

Mitsubishi UFJ Eyes Another Bank - Report
The Indonesian arm of Mitsubishi UFJ Financial Group is interested in buying another Indonesian bank after taking over Bank Nusantara Parahyangan (BNP), Bisnis Indonesia reported on Wednesday (9/5/07).
A senior official at the Jakarta office of the Bank of Tokyo Mitsubishi UFJ Ltd said Japan's biggest bank may acquire a bigger local lender.
"We are still looking for the possibility of another acquisition, maybe a larger bank than BNP and it could be a listed or a private company," Satoshi Ando, general manager of the Jakarta branch of the Bank of Tokyo Mitsubishi UFJ told the paper.  Ando did not give other details.
The paper also reported that an Indonesian central banker said that the Japanese bank is looking to buy stakes in Bank Alfindo, which has a capital base of less than Rp100 billion ($11.25 million).  The paper did not identify the official.
Mitsubishi UFJ Financial Group (MUFG), Japan's biggest bank, and its consumer-lending affiliate Acom Co Ltd are in the process of buying a 75.4% stake in BNP, which has a market capitalization of $24.77 million.
Ando said the acquisition of the bank is expected to be finalized this month or early June, pending the central bank's approval.

BNI Seeks Buyer for Bank Finconesia Stake
State-owned Bank Negara Indonesia (BNI) has said it will sell its 48.5% stake in Bank Finconesia to its partners in the joint venture bank.
Finconesia is 51%-owned by Commerzbank AG, 48.5% by BNI and the rest by the Chase Manhattan Bank of the US.
If the offer fails to get a buyer, BNI would seek to team up with new investors, BNI commercial director Bien Subiantoro said, according to an Antara report on Thursday (10/5/07).
Subiantoro said BNI hopes to find strategic investors to acquire the 48.5% stake in Finconesia, adding that a number of investors had shown interest, but no deal has been made due to price disagreements.



POWER
Singapore Firm to Build Coal-fired Plants 
PT Truba Alam Manunggal Engineering has signed four contracts valued at Rp3 trillion to build coal-fired power plants with a total capacity of 380 MW.
President of the Singapore-based company, Arifin Wiguna, said a contract was signed on April 30 by its subsidiary Tame Turnkey Contracting Pte Ltd.
The four projects include Kuala Tanjung plant of PT Eanyza Energy with a capacity of 250 MW, the Lampung plant of PT Central Daya Energi (60 MW), the Pontianak plant of PT Equador Manunggal Power (50 MW) and the Bangka plant of PT Bangka Manunggal Power (20 MW).
Arifin said construction of the projects, which are estimated to cost $900,000 per MW, will start immediately and they should come on line late in 2008 or early 2009.
Earlier Truba Alam acquired 51% of PT Menamas Mitra Energi, which operates a gas-fired power plant at Tanjung Batu, East Kalimantan at a price of Rp30 billion.
Menamas is operating a 60-MW gas-fired power plant and plans to build another power plant with a capacity of 80 MW in the third quarter of this year. The power generated by the Tanjung Batu power plant and the one to be built will be sold to state electricity company PLN.

Bali to Commence Thermal Development
The province of Bali is expected to begin the development of a 400-MW thermal power plant (PLTU) around Celukan Bawang port, Buleleng district, in an effort to anticipate a power crisis in the island, Asia Pulse reported.

"The thermal power plant is expected to commence operation in stages in 2008," public relations coordinator of state-owned electricity company PLN, Hendra Saleh, said on Thursday (10/5/07).

The power plant was expected to meet the need for electricity supply of Bali for five to 10 years to come. The plant will use coal so that its operational cost would be lower than other plants in Bali which used diesel oil, he said.

So far Bali has been supplied with 580 MW of power supplies, consisting of 200 MW from Java, 130 MW from Gilimanuk power generators, 120 MW from the Pesanggaran diesel power plant and 80 MW from the Pemaron gas-fired plant.

Agency Defends Nuclear Development
The Nuclear Technology Supervisory Agency has defended the government's policy to develop nuclear technology for research, industry and energy on the basis that such technology has been proven safe.
Agency head Sukarman Aminjoyo said Indonesia has operated three nuclear reactors for several years and no accidents have occurred. "All forms of technology involve certain risks, but since the early development of our reactors we have surveyed all probabilities. We have even anticipated the possibility of risks associated with potential earthquakes," Sukarman told The Jakarta Post on Tuesday (8/5/07).
He said that the safety and security of Indonesia's nuclear reactors had been proven during the earthquake in Yogyakarta last May. The nuclear reactor at the research center there was unscathed, showing that nuclear energy is safe even in the "ring of fire" if proper design technology is used. "Regulations oblige us to choose power plant technology that has been proven safe, rather than new, untested technology," he said.
Sukarman also said that many Asian countries frequently affected by earthquakes such as Japan and Korea had long been developing their own nuclear power plants. "Japan has built more than 50 power plants and South Korea has built more than 20 power plants. Japan is often hit by earthquakes but has avoided nuclear accidents. Why are we so worried about risks we are able to anticipate?" Sukarman asked.
In Indonesia, reactors located in Yogyakarta, Bandung and Serpong, Banten, are being used for research.
Last year President Susilo Bambang Yudhoyono announced government plans to start building a nuclear power plant in 2010 which will commence operations in 2016. This power plant will be the first nuclear power plant to provide energy to the public and industrial sectors in the country.
Sukarman said that in many countries, nuclear power plants are owned and run by the government as strategic resources, but Indonesia's 2006 Law on Nuclear Reactors allows the private sector to apply for nuclear power plant licenses.
 

EMP Upbeat on Targets
PT Energi Mega Persada (EMP), the nation's second largest publicly listed oil company, said Friday (11/5/07) it was sticking to its production growth targets despite a suspension of operations at its Kangean gas block offshore East Java.
"Our production in the Kangean block may fall but we still can optimize our output in other places," The Jakarta Post quoted EMP president director Christian Victor Ponto as saying after a shareholders meeting.
The Kangean field, 50% owned by a consortium made up of Japanese firms Mitsubishi Corp. and Japan Petroleum Exploration Co. (Japex), has estimated reserves of 1.5 trillion cubic feet of gas.
The company had targeted increasing production this year by 30% based on its proven reserves of 1.6 trillion cubic feet of gas and 40 million barrels of oil in eight different blocks across the archipelago.
The firm, which is the parent of Lapindo Brantas Inc., suspended gas production from the Kangean block in mid April because of the breakdown of a transport vessel.
EMP, 56% owned by the Bakrie Group and 14% by Reiner Latief, had said earlier it expected to resume operations in late April. "We haven't resumed operations in the block because we are also taking into account safety and environmental issues while awaiting the approval of the authorities," said Christian.
Assuming that oil prices range from $50 to $55 per barrel, this means that EMP has suffered up to $550,000 a day in losses since it stopped operations in the block, which produces mostly gas
and 10,000 barrels of oil equivalent per day, with all of the production being destined for the domestic market.

Inpex Buys Block Share from Total
Japanese oil exploration and development company Inpex Holdings Inc, said on Thursday (10/5/07) it would buy a share of an Indonesian oil bloc from French major Total SA.

INPEX will buy a 22% stake in the offshore East Sepanjang block in the Java Sea in a deal that has been approved by the Indonesian government, the company said.
After the sale of the share, Total's interest will be reduced to 27%. PT Easco East Sepanjang is the operator of the bloc with a 51% stake.

The existence of oil has been confirmed in the bloc and an exploration well is scheduled to be drilled by the end of 2007, Inpex said in a statement.

Tulip Field Has 'Significant' Deposits: Eni
Eni SPA drilled and discovered "significant" oil and gas deposits in the Tulip exploration well northeast of Kalimantan, Dow Jones Newswires reported.

The Italian oil and gas concern said Friday (11/5/07) it plans to appraise the well which it operates and wholly owns.

Eni and Anadarko Petroleum Corp. (APC) also appraised the Aster field and said it has a maximum oil flow rate of more than 5,000 barrels a day.

Eni, which operates and owns 66.25% of Aster, intends to file a development plan for the block.

MINING
Parliament Finalizes Mining License Changes
Proposed changes to the system of mining licenses are in the final discussion process in parliament, an Indonesian government official said Tuesday (8/5/07).
 
The proposed changes are expected to address tension among national and local authorities for control over gold, coal, nickel and copper resources, Dow Jones Newswires reported.
Infighting and lack of clarity over regional autonomy have been blamed for the lack of new mine developments in recent years.
"Regional autonomy presently is one of the issues and challenges mining industries," Simon Sembiring, Director General at the Ministry of Energy and Mineral Resources, said at the Asia Mining Conference.
Aside from clarifying central government, provincial and district authority, the proposed license changes will establish mining zones and state reserves of special national interest, Sembiring said.
 
The mining licensing system will do away with direct contracts between the mining companies and the government, and will instead use a system where mining licenses are granted by the government of the province in which the mine is located. The proposed licensing system is also expected to foster development of downstream activities.
Processing and refining of metal must be established in Indonesia, Simbiring said.

Indonesia Tightens Domestic Tin Trading
Indonesia, the world's second largest tin producer, has tightened rules on domestic shipments of tin ore, the trade ministry said in a ruling, as part of an effort to reduce illegal tin shipments.
 
The move followed the introduction of stringent rules on tin exports, including producing metal with minimum purity of 99.85% and providing proof of royalty payment, Reuters reported.
 
Under the new ruling, dated April 30 and effective from two months after that, firms need to obtain more documents including permits from regional governments and more detailed information about shipments, such as amount and destination.
"It is part of efforts to prevent illegal shipments of tin ore between islands," the ministry said in the ruling.
Metals traders have been closely watching Indonesia after a government crackdown on illegal mining last October which shut dozens of small independent smelters on the country's main tin producing island of Bangka.
Smuggling of tin from Bangka had been blamed for causing oversupply in global markets and sent the price of the metal tumbling in 2002.

Haddington Takes Kalimantan Coal Option
Australia’s Haddington Resources expects to secure a two-year option over two highly prospective coal areas in Indonesia through its acquisition of Minvest International Corp, Australia Business News reported on Thursday (10/5/07).

The potential projects in south Kalimantan, Indonesia, will be added to its existing portfolio of exploration tenements prospective for uranium, garnet, iron, gold and tantalum and Minvest's mineral services business and mineral projects.

The new projects are being acquired by Minvest International Corp through its subsidiary PT Minvest Mitra Pembangunan (MMP), which has secured options to purchase all of the shares of PT Suryaraya Permata Khatulistiwa (PT SPK) and PT Suryaraya Cahaya Cemerlang (PT SCC), each of which holds a mining right for coal.

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