Update News December 15, 2016

In The News

Iran, Indonesia Sign Four MoUs
Tempo, 15 December 2016

The Indonesian and Iranian government signed four cooperation agreement in several areas previously initiated by both country’s head of state.

Iranian President Hassan Rouhani and Indonesian President Joko Widodo witnessed the signing of four Memorandum of Understanding (MoU) in various fields between foreign ministers of both countries at the Sa'dabad Cultural Complex in Tehran, Wednesday, December 14, 2016.

"Representatives of private sector from both countries also signed eight cooperation documents during a ceremony at the Sa'dabad Cultural Complex," according to Iranian President Rouhani's website on Wednesday, December 14, 2016.

The MoU covers cooperation efforts in legal aspects, including eradicating crime, extradition, electricity and renewable energy, and increasing investment between both countries.

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Indonesia Opens Investment Opportunities for Indian Businesses
Tempo, 15 December 2016

The opportunity for Indian investors to invest in Indonesia is wide open as the Indonesian government is very welcome to foreign investments, head of the Industrial Research and Development Center (BPPI) Haris Munandar said when accompanying Industry Minister Airlangga Hartarto in India.

“The policy is reflected in deregulations and economic policy packages launched during Jokowi presidency, which include three hours investment service, facilities at bonded logistic center, and incentives for industrial areas based on zones,” Haris said in a written statement, as quoted by Antara.

Moreover, Haris went on, the government and industry players are guided by Government Regulation No. 14/2015 on National Development Main Plan for 2015-2019 term, which will be implemented in three main stages.

“The first stage will see national industrial development plan to improve added value of natural resources in agriculture-based mainstream industry, mineral and oil & gas, followed by selective development of supporting and mainstay industries,” he noted

The government is also speeding up development and distribution of industrial area across Indonesia, include the industrial areas of Sei Mangke in North Sumatra, Dumai in Riau, Berau in East Kalimantan, Palu in Central Sulawesi, Kendal in Central Java, Java Integrated Ports and Estate (JIIPE) in Gresik, East Java, and Morowali in Central Sulawesi.

India is Indonesia’s eight largest trade partner. Commercial transactions between the two countries reached 14.6 billion US dollars or 4.9 percent of Indonesia’s total foreign trade transactions with India in 2015.

In 2015, India invested in 43 projects in Indonesia’s industrial sector worth 15.5 million US dollars, an increase compared to that of 2014 with 19 projects worth 12.89 million US dollars.Investments were mostly made in food, textile and transport industries.

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Gov't to Control Land Prices
Tempo, 15 December 2016

The Land and Spatial Planning Ministry plans to establish a land bank in an effort to counter the uncontrollable increase of land prices.
Land and Spatial Planning Minister Sofyan Djalil said that currently, land prices inflation is very high.

The condition will affect low-income people's access to land and housing. "If [lands] are controlled by the land bank, prices can be controlled," Sofyan said on Wednesday, December 14, 2016.

Sofyan said that assets managed by the land bank will allow land prices to reduce because the government will apply a subsidy system. "For example, we will buy neglected land with low cost," Sofyan said.

Sofyan expected that with the presence of the land bank, land prices will no longer determined by the market. Sofyan added that land use can also be optimized, either for industrial purposes, housing, or infrastructure development.

Sofyan underlined that the land bank will manage lands for public interest by employing competitive mechanism. "We will find the balance between public interest and driving investment," Sofyan said.

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MRT Project to be Fast-tracked Next Year
Tempo, 15 December 2016

Jakarta City-owned PT Mass Rapid Transit (MRT) Jakarta will fast-track the MRT project next year. PT MRT Jakarta president director William P Sabandar said that the entire construction works will complete by 2017. The company is aiming to complete 36 percent of the project next year.

“2017 will see us speeding up the development. 2017 will indeed be the peak of development. It will result in congestion problems,” William said Wednesdy at PT MRT Jakarta premise on Jalan MH Thamrin, as quoted by Bisnis Indonesia.

As of November 30, the company has completed 60.22 percent of works, comprising 47.2 percentage of completion of elevated structures and 77.8 percentage of completion of underground structures.

“We are targeting 36 percentage of completion next year. Because the operation is expected to commence by February 2019. Therefore, construction works must complete by 2018,” he noted.

William said that construction work must complete one year before operation. Accordingly, the company expects that conclude them by July 2018. “The works must complete one year before operation, it must be done by July,” he said.

During the one year period, the company will commission the MRT project. “We will have a four month commissioning period,” he said.

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MRT Jakarta to Complete Land Acquisitions Next Year
Tempo, 15 December 2016

PT Mass Rapid Transit (MRT) Jakarta is targeting to complete all land acquisition process for the mass transit projects by 2017.

"This year, we have acquired 96 plots of land out of the 134 needed. MRT Jakarta president director William Sabandar said in Jakarta Wednesday, December 13.

The Jakarta provincial government plans a consignment as mandated by Law No.2/2012 on Land
Acquisition for Public Interest.

"We hope for a speedy consignment process, so that the MRT project can proceed smoothly without obstacles concerning land acquisition," said William.He also said that the rail-based mass transportation project is being carried, along with the consignment process.

Based on data the company's data, 96 plots of land have been acquired in several areas in Jakarta including Pondok Pinang, Lebak Bulus, Fatmawati, Cipete, Sisingamangaraja, and others.

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Sultan Iskandar Muda Wins World`S Best Halal Airport Award
Antara News,15 December 2016

Sultan Iskandar Muda international airport in Aceh has won the "Worlds Best Airport for Halal Travelers" title at the World Halal Tourism Award 2016.

"We thank all parties for helping Sultan Iskandar Muda international airport win the Worlds Best Airport for Halal Travelers award," President Director of state-run airport operator PT Angkasa Pura II (Persero) Muhammad Awaluddin said in a statement here on Wednesday.

This is the first time that an Indonesian airport has won the award. Last year, it was won by Abu Dhabi International Airport.

"We hope that the award will encourage AP II to perform better in operating all airports under our management," he said, adding that the tourism ministry and voters had played an important role in the company winning the award.

Some 1.89 million voters from 116 countries participated in the voting to determine winners in 16 categories of the world halal tourism awards.

A panel of judges comprising nine professionals from the global halal tourism industry confirmed that all nominees had fulfilled its criteria.

Indonesia won 12 of the 16 categories in the World Halal Tourism Award 2016, including Worlds Best Halal Culinary Destination, Worlds Best Halal Destination, and Worlds Best Honeymoon Destination Halal.

"Sultan Iskandar Muda airport is committed to supporting the government in developing Aceh as a halal destination for international as well as domestic tourists," he added.The company will play an active role in improving the halal tourism industry in Indonesia, he said.

Sultan Iskandar Muda airport was built in modern Aceh architecture style, interlaced with traditional and Islamic nuances. It has three domes, one each representing religion, culture and education.

After the strong earthquake that devastated Pidie Jaya district last week, the airport was put on standby mode to facilitate deployment of volunteers, relief material, and other essentials to the region

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Indonesian Govt To Lengthen Runway Of Lembata Airport
Antara News, 15 December 2016

Coordinating Minister for Maritime Affairs Luhut B. Panjaitan promised the government would soon lengthen the runway of the Lembata airport in Flores.

"I see there are a lot that needs to be developed in Lembata for its tourism potential, therefore, we will soon lengthen the runway of the airport to support development of the tourism potential of that area," Luhut said here.

The airport would be expanded that it could be used not only by propeller aircraft but also jet aircraft or bigger aircraft, he said when attending the Archipelago Day Commemoration.

He said the district administration could help in land clearing."I am optimistic more tourists would visit Lembata when the jet aircraft could land at the airport," he added.Luhut also saw the problem with the shortage in power supply in Lembata and the highway leading to Lembata also needs repair.

President Joko Widodo has said that he wanted equitable distribution of development not only concentrated in Java.The president has pledged to give priority to development of eastern part of the country, he said.

He said East Nusa Tenggara has also seen extraordinary progress in development, he said, citing for the first time in history seven dams are built at once in this province.Luhut attended the Archipelago Day Commemorations representing the president who is on a visit abroad.

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Indonesia, Iran to Increase Energy Cooperation
Tempo, 15 December 2016

President Joko Widodo (Jokowi), who is currently on a state visit to Iran, will hold talks with Iranian leaders to boost cooperation between the two countries in the energy sector.

Iran has one of the worlds largest energy reserves and diversifying energy cooperation will be very important for national energy resilience, Bey Machmudin, the head of the Press, Media and Information Bureau of the State Secretariat, said in a press statement received here on Wednesday.

President Joko Widodo will discuss steps to increase cooperation in oil and gas as well as oil field management in Iran and oil refinery investments in Indonesia, he said.

Indonesian Foreign Minister Retno Marsudi said in Tehran on Tuesday that a further meeting at the ministerial level will be held on December 15.

"Iran has huge potential for cooperation in the field of energy as well as oil and gas. Today Pak (Mr) Jonan arrived and held a meeting to discuss cooperation, and tomorrow the results would be made known," she said.

Minister Jonan said the two countries will discuss cooperation between state-owned energy company Pertamina and National Iranian Oil Company (NIOC) as well as between state power company PT PLN and Mapna Group (Iran Power Plant Projects Management Company).

"The president director of PLN has also been here. Discussion on technical cooperation especially in the field of gas turbine will also be held between Magna and PLN," Jonan said.

Pertamina had recently sought cooperation with Iran in oil and gas management, including supply of liquefied petroleum gas and oil, and investments in Indonesias oil and gas upstream sector.

On Wednesday, the second day of his visit to Tehran, President Jokowi held a meeting with Iranian President Hassan Rouhani, Parliament Speaker Ali Larijani and Supreme Leader Ayatollah Seyed Ali Khameinei.

Several memoranda of understanding will be signed, including one on extradition and another on mutual legal assistance by Foreign Minister Retno Marsudi on behalf of Indonesia, on electricity by Energy Minister Jonan, and on investment by the head of the National Investment Coordinating Board.

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Pertamina To Develop Gas Infrastructure, Facilities
Antara News, 15 December 2016

State-run oil and gas company PT Pertamina (Persero) plans to improve gas infrastructure and facilities to augment the national gas industry and meet the renewable energy production target.

Gas Pertamina Director Yenni Andayani said at an energy forum here on Wednesday that the plan would include development of a liquefied natural gas (LNG) terminal and a floating storage regasification unit (FSRU).

"Currently, the construction of an FSRU in Cilacap is underway. It will have a production capacity of 200 million cubic feet per day (mmscfd), and will reach the fuel oil conversion target in 2018," Yenni added.

In the transportation sector, she noted, Pertamina is operating 56 gas stations, including mobile refueling units (MRUs) in Jakarta and its surrounding areas, such as Bogor, Depok, Tangerang, Bekasi, besides Palembang, Semarang, and Balikpapan.

Yenni informed that Pertamina was ready to invest in the upstream renewable energy sector. The company would need US$1.5 billion of capital expenditure for renewable energy management up to 2019, not including geothermal energy.

A renewable energy sector analyst with the International Energy Agency, Heymi Bahar, said the growth in electricity demand, the dependency on fossil fuel import, as well as air pollution and environmental problems have encouraged the development of renewable energy sector in Southeast Asia, including Indonesia.

He underscored the need to expedite the development of such energy by pursuing comprehensive policies and ensuring a synergy between the government and business operators.

The Directorate General of Renewable Energy and Energy Conversion should push Pertamina to sustain development of renewable energy, he argued

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Indonesia-Taiwan Improve Agricultural Cooperation
Antara News, 15 December 2016

Cooperation in the fields of fisheries and agriculture between Indonesia and Taiwan which was stranded for four decades has been improving the welfare of people and strengthening the friendly relations between the two sides.

Taiwans assistance in the development of agriculture and fisheries in the country has yielded remarkable and real results, and has received recognition from various sides, Chief of Representative Taipei Economy and Trade Office (TETO) in Indonesia, Chang Liang-Jen said at the commemoration of the four decades of the cooperation here Thursday (Dec. 8).

With regard to cooperation, Taiwan shared its experiences on the development of agriculture and fisheries which have been applied on Formosa Island.

In addition, Taiwan has also provided technical assistance to improve soil cultivation, increase income of farmers significantly, and expand the sales market at the supermarket in Jakarta and other major cities in Indonesia.

"This partnership has not only managed to introduce the advantages of Taiwans agricultural products, but has also increased exchanges and friendship between the people on both sides," Chang noted.

In 1976, Taiwan sent a mission to Indonesia to promote technical cooperation in these two areas. Taiwanese employers have been investing for more than 30 years in agriculture and fisheries in the various regions in Indonesia.

"Improving agricultural and fishery cooperation with ASEAN member countries is one important part of the New Southbound Policy," Chang said.

In order to increase agricultural cooperation between Indonesia and Taiwan, in May 2016, the two sides signed a memorandum of understanding to increase cooperation on the basis of cooperation in agriculture and fishery that has lasted forty years.

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