Update News February 03, 2017

In The News

Tax Revenue Slightly Increases to Rp69.9tn
Tempo, 03/02/2017

Finance Ministry’s Directorate General of Tax notes that Indonesian tax revenue as of early February has reached Rp69.9 trillion or slightly increases compared to the same period last year.

“The net amount is roughly Rp69 trillion, it’s a positive result when compared to the same period last year at Rp66 trillion,” the said Yon Arsal, director for tax potential, compliance and revenue, as quoted by the news agency Antara.

Yon said that that the figure includes revenue from oil and gas and non-oil and gas sectors that has grown in early 2017. Oil and gas tax revenue has grown due to improved global crude oil prices.

“PPh migas [oil and gas income tax revenue] has been positive, the realization stands at Rp4 trillion if I remember correctly, owing to improved oil and gas prices,” Yon said.

The government has set Rp1,498.87 tax revenue target in the state budget 2017, comprising Rp1,307.67 in tax revenue and Rp191.2 trillion in customs revenue.

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BKPM: European Investors Focus on Manufacturing Sector
Tempo, 03/02/2017

The Investment Coordinating Board (BKPM) sees European investors as potential targets, especially for manufacturing businesses like footwear, retail, and the service sector.BKPM chief Thomas Lembong said European investors are slightly different from Asian's like Japan, South Korea, and China.

Europeans are focused on labor-intensive sectors while Asian investors prefer capital-intensive ones."The direction is towards manufacturing, but European investors are more concerned about the quality of our workers," Lembong said.

The BKPM recorded that investments from Europe in the last five years have reached more than US$13.3 billion (Rp172.9 trillion). Europe's top five investors in Indonesia are the Netherlands, the UK, France, Luxembourg, and Germany.

This year, Lembong said, European investors are likely to keep their interests in the manufacturing sectors—particularly garment and textile industries.

"They will release brands like H&M and Zara for footwear and apparels," he said, citing Indonesia's renowned excellence in the middle-class segment.

He also said the European investors will be quite attracted to the furniture and paper industries. "We have the wood legality verification system now, so it's good for them," he said.

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Grab To Invest $700 Million In Indonesia
The Jakarta Post, 03/02/2017

Ride-hailing app Grab has announced its plan to invest $700 million in Indonesia in the next four years, reinstating the importance of the country for the company.

The company will allocate the funds toward building a research and development center in Jakarta, provide funding for emerging startups with social purposes and increase mobile payment access, including with Grab's own GrabPay credit system, among others.

“As the biggest technology startup in Southeast Asia, we are delighted to invest significantly for Indonesia’s future and support the Indonesian transition into a full digital economy,” Grab CEO and co-founder Anthony Tan said in an official statement on Thursday.

The plan was part of the 2020 Grab master plan, Grab 4 Indonesia. Last year, the company saw 600 percent growth for its GrabCar and GrabBike services, compared to the previous year.

It is currently available in eight cities in Indonesia including Jakarta, Bandung, West Java, Padang, West Sumatra, Makassar, South Sulawesi and Yogyakarta, among others.

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RoRo To Connect Indonesia-Philippines As Part of ASEAN Connectivity
Antara News, 03/02/2017

New economic and trade opportunities are in sight with the opening of the Davao-General Santos-Bitung (D-G-B) Shipping Service, which is one of the target priorities for the Philippines Chairmanship of the ASEAN in 2017.

Philippine Ambassador to Indonesia Maria Lumen B. Isleta and members of the Philippines and Indonesia Inter-Agency Task Force for the Operationalization of the D-G-B Roll-on/Roll-off (RoRo) Route gathered in Jakarta on Jan 17, 2017, to discuss preparations for the maiden voyage of the RoRo, which will connect Davao and General Santos City to Bitung in North Sulawesi, Indonesia, the Philippine embassy said in a statement here on Thursday.

The D-G-B RoRo Route under the ASEAN RoRo Initiative aims to enhance maritime connectivity in ASEAN and maximize the use of regional sea lanes.

The opening of the route is a more cost and time-efficient alternative to the usual Manila-Jakarta-Bitung route, which would take about three to five weeks of shipping time.

In contrast, direct shipping through the D-G-B route will take only one day and a half of sailing (excluding port stay). The route is also expected to spur trade between Mindanao and the Sulawesi provinces in Indonesia.

It is also expected to provide greater access for local businessmen to engage in international trade, as well as stimulate other areas of development such as joint tourism promotion, establishment of direct linkages, and increase in investment inflows, among others.

On Jan 18, Isleta and leaders of the RoRo project task force paid a visit to Manado and met with North Sulawesi Governor Olly Dondokambey to discuss the maiden voyage of the RoRo.

Meanwhile, The Philippine News Agency (PNA) reported that Philippines President Rodrigo R. Duterte and Indonesian President Joko Widodo will launch the ASEAN RoRo Project on April 28, 2017.

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Pelindo I Speeds Up Development of Kuala Tanjung Port
Tempo, 03/02/2017

State-owned port operator PT Pelabuhan Indonesia (Pelindo) I is accelerating the development of Kuala Tanjung Port in North Sumatra.

Pelindo I president director Bambang Eka Cahyana said that the construction of multipurpose terminal of Kuala Tanjung Port phase I is 70% complete.“We will work hard to complete Kuala Tanjung port on schedule,” he said yesterday in a written statement, as quoted by Bisnis Indonesia.

He explained that Kuala Tanjung port development is key to improving Indonesia’s logistics sector due to its close proximity to the Malacca Strait, the world’s busiest trade route.

He said the company is confident that the Ministry of Transportation will name Kuala Tanjung as an international hub for container transport once the construction complete.

Kuala Tanjung Port is expected to accommodate growing demands for general cargo and containers as well as improve flexibility on cargo services and growth of port throughput.

Moreover, it can create value added to the economy which is expected to boost local development and turn the region into an investment destination.

Kuala Tanjung port, which will be named an international hub, will be developed in four phases. The first phase is the construction of a multipurpose terminal from 2015 to 2017.

The second phase is the construction of an industrial zone on 3000 hectares of land from 2016 to 2018. The third phase is the construction of an international dedicated terminal/hub port from 2017 to 2019.

The fourth phase is the construction of an integrated industrial zone or a port city from 2012 to 2023. The project developed in Batubara District will cost around Rp34 trillion (roughly USD2.5 billion).

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Transjakarta To Operate Boats To Thousand Islands
The Jakarta Post, 03/02/2017

Aside from operating buses, PT Transportasi Jakarta (Transjakarta) is set to provide boats serving routes between Jakarta mainland and the Thousand Islands, an executive said on Friday.

The expansion is needed to enable better transportation facilities for passengers to and from both areas, said Transjakarta president director Budi Kaliwono.

To reach the goal, however, the city-owned company is currently conducting a study to examine the social impacts of the proposed operation."We are waiting for the study results on various social aspects. Principally, we are ready once the Jakarta administration assigns us [for the new operation]," Budi said as quoted by beritajakarta.com. "We ask residents to be patient. We hope the study will finish soon and residents can enjoy cheap and feasible transportation."

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26 Feeder Buses Link Passengers To New Jakarta Terminal
The Jakarta Post, 03/02/2017

The Jakarta Transportation Agency has begun operating 26 Transjakarta feeder buses to transport passengers from several areas across the city to the integrated Pulo Gebang terminal in Cakung, East Jakarta.

The feeder buses are available 24 hours a day at the Tanjung Priok terminal in North Jakarta and at the Pinang Ranti terminal in East Jakarta.

The agency’s deputy head Sigit Wijatmoko said on Wednesday that the launch of the operation went smoothly. “The buses will transport passengers to Pulo Gebang with tickets costing up to Rp 3,500 [26 US cents],” he said as quoted by beritajakarta.com.

The Pulo Gebang terminal, the largest bus terminal in Southeast Asia, was launched in December last year. It is considered somewhat unattractive to passengers because it is hard to reach the area.

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National Planning Agency Proposes Changes To Islet G Construction
The Jakarta Post, 03/02/2017

National Development Planning Board (Bappenas) chief Bambang Brodjonegoro has called for an expansion of the distance between the coastline and islet G in Jakarta Bay to ensure that the reclamation project will not disrupt shipping.“To accommodate bigger interests, islet G should be changed,” Bambang said as reported by kompas.com on Thursday.

The distance between islet G and the coast should be expanded to 500 meters from the current 300 meters, said Bambang, adding that additional space was needed to help ships move more easily.

He said the proposal was made after his institution studied the condition of Jakarta Bay in North Jakarta after part of it was reclaimed.
He said Bappenas had also considered sedimentation in the area between islet G and the coast.

Bambang would not comment on whether islet G had affected pipes owned by state-owned energy company PT Pertamina located in the reclamation area, saying only that technical solutions may help to solve the problem.

Bappenas had focused its attention on the impacts of reclamation on shipping lines in Jakarta Bay, Bambang added.

The government stopped islet G’s construction by PT Muara Wisesa Samudra, a subsidiary of developer PT Agung Podomoro Land, in July 2016 because of overlapping regulations.

The project was also considered to have endangered the environment, vital projects and shipping lines.The government later opened up the possibility of continuing the project by appointing several institutions to study the matter.

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Energy Ministry Issues Regulations to Meet Electrification Target
Tempo, 03/02/2017

Energy and Mineral Resources Minister Ignasius Jonan issued three ministerial regulations promulgated by the Law and Human Rights Ministry.

Jarman, director general of electricity at the Energy and Mineral Resources Ministry explained that the new bills are related to the target of electrification to be achieved by 2019.

“The government has set a target to achieve 10 percent of electrification by 2019 and to set affordable electricity prices without hikes.

This is a shared target set by the Energy Ministry who initiated the ministerial regulations,” he said at his office on Thursday, February 2, 2017.

The three regulations are Ministerial Regulation No. 10/2017 on electricity sale and purchase agreement, Ministerial Regulation No. 11/2017 on the utilization of gas for power plants, and Ministerial Regulation No. 12/2017 on the utilization of new and renewable energy.

Regulation No. 10/2017 was issued to govern the risk equalization between the sellers, in this case, the Independent Power Plant (IPP), and buyer, which is the state electricity company PLN.

“Therefore, a legal base is provided because some power plants had not been reliable causing frequent power outage despite sufficient capacity,” Jarman explained.

Ministerial Regulation No. 11/2017 was issued to govern natural gas utilization for power plants in a bid to secure gas and energy supplies for reasonable prices.

“The ministerial regulation will provide options of reasonable prices,” Jarman added. Finally, Ministerial Regulation No. 12/2017 governs efficient utilization of energy sources.

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PGN Bution To Autoegins Gas Distribmotive Component Plant
The Jakarta Post, 03/02/2017

State-run gas company PT Perusahaan Gas Negara Tbk (PGN) has begun gas distribution to PT Krakatau Nippon Steel Sumikin (KNSS), an automotive component factory, in Cilegon District of West Java."PGN always strives to deliver gas on time in accordance with the industrys demand.

Now, we have begun delivering gas to KNSS, starting Feb 1," PGNs Area Sales Head for Cilegon, Yohanes Chandra, noted in a statement here, Thursday.

KNSS, established on December 26, 2012, is a joint venture between Japans Nippon Steel & Sumitomo Metal Corporation and Indonesias PT Krakatau Steel Tbk.

the company produces some components for the automotive industry, such as galvanized, galvanealed, and cold rolled steel, and has an annual production capacity of 480,000 metric tons.

Chandra noted that PGNs natural gas would be utilized for the plants 4,140 cubic meter per hour furnace."Its gas consumption would gradually increase to 1,325,000 cubic meters per month by 2020," he noted.

KNSS Mechanical Engineer Yusuke Tosa stated that the natural gas supplied from PGN has a higher calorie value, thus, it could result in optimum, stable, and clean heating.

"PGN would become a reliable partner to support the development of KNSS in future. Currently, we will test its equipment and utility, with the first production targeted to begin in Aug 2017," Tosa said.

For the Cilegon area, PGN has supplied natural gas to 35 large-scale industries and 237 households and operated a 101-kilometer (km) pipeline.

The company has distributed natural gas to 1,652 large-scale industries and power plants across the country, 1,929 commercial subscribers, such as hotels, restaurants, hospitals, and small and medium enterprises, and 204 thousand households.

It has operated gas pipelines stretching a total length of 7,278 kms, or some 80 percent of the countrys downstream natural gas infrastructure.

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Jakarta Asks to Apply Integrated Trash Transporting System
Tempo, 03/02/2017

The Jakarta Provincial Government requested to apply integrated trash transporting system like in Japan and Singapore.Moreover, trash management with this system is not applied in other big cities yet.

"Maybe Jakarta could become a city role that applied this integrated trash transporting system," said Tuti Hendrawati Mintarsih, General Director of Trash Management, Waste, and Dangerous Toxic Materials (B3) in Ministry of Environment and Forestry (KLHK) at City Hall, Thursday (2/2).

She added that the biggest challenge in City as a capital is have to be the nation's mirror and an entrance to all countries. This makes City have a huge workload and responsibility."Of course KLHK ready to support whatever City do," she added.

She also appreciates the City's Living Environment Dept.'s work which quite successful to clean city from trash and arrange rivers and rivulets in city.

"Another challenge for Jakarta is how to make river water quality is appropriate in accordance to what is has been determined," she closed.

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Ministry Ready To Develop Food Production Centers In Border Areas
Antara News, 03/02/2017

The Agriculture Ministry is set to establish food production centers in border areas in a bid to support food provision in the regions.Agriculture Minister Amran Sulaiman said here on Thursday that some border areas are now ready to develop food production centers.

These are in Riau Islands, West Kalimantan, East Nusa Tenggara, Maluku and Merauke."Currently, Indonesia lags behind its neighboring countries in terms of food security, although we have a large area under agriculture," Amran added.

Such a situation, he continued, leads to smuggling of food from neighboring countries."We will build rice production centers there. If we build food production centers in the border areas, we can also export the commodity easily," he explained.

In addition, it would support the governments attempts to make Indonesia the worlds leading food producer.Amran noted that enhanced food production in Riau Islands can even result in export of rice to Singapore.

Increased food production in West Kalimantan, East Nusa Tenggara and Merauke could result in export of commodity to Malaysia, East Timor and Fiji, respectively.He reiterated that the ministry would cultivate some strategic commodities for export, including onion, corn and rice.

The ministry has targeted to bring 50,000 hectares of land in Entikong under the program, while in Riau Islands, it has prepared 4,000 hectares of land. The government will also develop the processing industry to increase the commodities added value.

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