Update News October 20, 2017

In The News

New infrastructure provides better mobility to N Sumatra people
ANTARA News 20 October 2017

Jakarta (ANTARA News) - North Sumatra has enjoyed rapid infrastructure development over the last several years, thanks to the economic policy of President Joko Widodo (Jokowi) administration to improve the mobility of the people and make Lake Toba in the province a world-class tourist destination.

Various infrastructure projects, such as constructions of airports, highway, toll roads, and seaports, have been underway to improve connectivity in North Sumatra.

On Oct 13, Jokowi inaugurated the Medan-Binjai and Kualanamu Airport-Sei Rampah toll road sections, spanning 52 kilometers, in Kualanamu, North Sumatra.

Jokowi, in the presence of State Enterprises Minister Rini Soemarno, Public Works and Housing Minister Basoeki Hadimoeljono, Cabinet Secretary Pramono Anung and North Sumatra Governor Erry Nuradi, pressed a siren to mark the inauguration of the two toll road sections and expressed hope that the operation of the two toll road sections would increase the mobility of people and goods.

He believed that if the mobility of goods increased and the transportation cost declined, then the cost of goods would be cheaper.

Owing to high prices of goods, Indonesia has lost to other countries that offer lower prices, thanks to their solid infrastructure, he noted.

He added that the construction of some toll road sections in North Sumatra has not been completed due to land clearance problems.

The toll road sections include the 3.3-kilometer Tanjung Mulia- Sei Semayang section and the 10.15-kilometer Sei Rampah-Tebing Tinggi section.

The president asked the North Sumatra provincial police and the public prosecutors office to assist the contractor in land acquisition for the toll road sections.

"We should make good approaches as the project does not serve the interest of one or two persons, but the people at large," he remarked. 

Developmental works of infrastructure, such as toll roads, are in fact being carried out across Sumatra Island.

Prior to visiting North Sumatra, Jokowi inaugurated the 7.75-kilometer section I of Palembang-Indralaya toll road in South Sumatra province on Oct 12.

"I am very delighted that this toll road is the first of its kind in South Sumatra," he revealed at the Palembang-Pemulutan toll gate. 

The 21-kilometer Pelembang-Indralaya toll road comprises of a 7.75-kilometer section I, connecting Palembang to Pemulutan; a 4.9-kilometer section II, connecting Pemulutan to Kota Terpadu Mandiri; and a 8.5-kilometer section III, connecting Kota Terpadu Mandiri to Simpang Indralaya.

Lake Toba Tourism 

From Kualanamun, the Head of State proceeded to Huta Ginjang tourist resort in North Tapanuli, also in North Sumatra, to inspect the preparations to designate Silangit Airport as an international airport on Oct 28. The airport is expected to serve Silangit-Singapore flight as of Oct 28.

He also enjoyed the scenery of Lake Toba from Huta Ginjang village. Lake Toba, which is the largest volcanic lake on Earth, and Samosir Island, which is located in the middle of the huge lake, offer a complete tourism package, encompassing beautiful scenery, unique Batik culture and traditions, and intriguing history.

The lake has been designated as one of the 10 priority tourist destinations selected alongside the Borobudur Temple in Central Java, Mandalika in West Nusa Tenggara, Labuhan Bajo in East Nusa Tenggara, Bromo-Tengger-Semeru in East Java, Seribu or One Thousand Islands in Jakarta, Wakatobi in Southeast Sulawesi, Tanjung Lesung in Banten, Morotai in North Maluku, and Tanjung Kelayang in Bangka Belitung.

Infrastructure also plays a significant role in the tourism industry of the Lake Toba region, and so do tourism products.

"Cultural art shows must also be started, and facilities related to hotel, resort, and convention hall must also be built. Otherwise, these infrastructures will be useless," Jokowi remarked.

The infrastructure includes the newly inaugurated toll road sections, namely the 42-kilometer Kualanamu-Sei Rampah section of the Medan-Kualanamu-Tebing Tinggi toll road and 10.46-kilometer Helvatia-Semayang-Binjai section of Medan-Binjai toll road.

Lake Toba tourist resort is managed by Lake Toba Tourist Resort Management Authority Board, which is led by Coordinating Minister for Maritime Affairs Luhut Binsar Panjaitan. 

Meanwhile, the Transportation Ministry will provide a number of facilities, including a port and Ro-Ro ferry vessel to support the development of tourism industry in Lake Toba.

"We will prepare a Ro-Ro vessel capable of carrying 35 cars," Transportation Minister Budi Karya Sumadi said, while inspecting the pier of Muara port in Lake Toba, Oct 14.

The availability of Ro-Ro vessel is important to develop Lake Toba as a main tourist destination, he added.

"In addition, we will build two ports in Samosir Island and three more in the outer parts of the island. They will be completed in 2018," he noted.

Samosir Island is located in Lake Toba. The 630-square kilometer island, which is slightly smaller than Singapore, is the worlds largest island within an island.(*)

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Infrastructure projects should be completed on schedule: Minister
ANTARA News 20 October 2017

Jakarta (ANTARA News) - All infrastructure projects initiated and undertaken during the government of President Joko Widodo (Jokowi) should be completed on schedule.

"All projects will run as scheduled as we calculate the projects carefully," Coordinating Minister for Maritime Affairs, Luhut Binsar Pandjaitan, said here on Thursday.

The senior minister stated that the government had focused on completing the project of Patimban Port, Kertajati Airport, and the Jakarta- Surabaya semi-fast train.

In addition, the government also continues to encourage the acceleration of infrastructure projects, including inviting investors to help in financing projects.

One of the invited parties is the China Development Bank (CDB).

"The CDB has the potential to finance a number of ongoing projects," he remarked.

Jokowi earlier officially kicked off an event to accelerate the certification program for construction workers held at the Bung Karno Sports Stadium here on Thursday.

"The president's presence today is a demonstration of his appreciation for the workers involved in construction projects," Public Works and Public Housing Minister Basuki Hadimuljono explained.

The government has prioritized the development of infrastructure, and this is good opportunity for construction workers, he revealed.

The newly renovated Bung Karno Stadium is the result of the hard work of the construction workers, he added.

The Olympic Council of Asia has lauded the completion of the stadium renovation work and is optimistic that it would be ready for hosting the Asian Games 2018.

According to the minister, the certification program for Indonesian construction workers is crucial to offer them a higher recognition and boost their competitiveness,.

Workers involved in the Bung Karno stadium renovation project as well as Jakarta Mass Rapid Transit and Light Rail Transit projects participated in the event.(*)

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Trada Maritime Changes Name, Switches Focus to Mining
The Jakarta Globe, 20 October 2017

Jakarta. Trada Maritime, a shipping services and marine transportation company, changed its name to Trada Alam Minera, marking the company's change of course to focus more heavily on the mining sector.

The company's shares rose as high as 13 percent on Friday (20/10) to trade at Rp 156 ($0.01) a piece on the Indonesia Stock Exchange (IDX).

"In the future, our business from mining is about 80 percent, while the remaining 20 percent is still in the shipping sector," Soebianto Hidayat, the president director of Trada Alam Minera, said on Thursday (19/10).

Trada plans to acquire coal miner Gunung Bara Utama by taking over shares and injecting capital in both of Gunung Bara's shareholders, Semeru Infra Energi and Black Diamond Energy, for Rp 2.47 trillion.

Gunung Bara has been in operation since last year. It holds a license to mine ​​5,350 hectares in West Kutai in East Kalimantan until 2031. The mine has coal reserves of 64,855 million tons and coal reserves of 264 million tons.

Trada will also acquire Lautan Rizki Abadi, which holds a 50.10 percent share in listed coal miner SMR Utama, for Rp 3.13 trillion. Hidayat said the acquisition has a strategic value as SMR Utama's subsidiary, Ricobana Abadi, engages in coal contracting services.

"This business line will be integrated first quarter-2018," Hidayat said.

Ismail Mahruf, a director at Trada Alam, said the company plans to raise funds for the acquisition by selling a maximum 40 billion new shares, or 80.43 percent of the company's enlarged capital, in the coming months to raise Rp 6 trillion.

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Indonesia reaches agreements over Masela gas project with Japan
ANTARA News 20 October 2017

Jakarta (ANTARA News) - Indonesia has reached three agreements with Japan following a recent visit by the countrys Energy Minister Ignasius Jonan to Japan to discuss the Masela Block gas field development project.

The agreements were made after Minister Jonan met with Japans Inpex Corp. CEO Toshiaki Kitamura in Tokyo on Tuesday, according to a press release from the Ministry of Energy received here on Thursday.

The three agreements include the governments stance to urge Inpex to develop the LNG refinery project onshore in line with President Joko Widodos directive.

Secondly, the government will extend Inpexs contract for 20 years and add seven more years to compensate for changing the project from offshore to onshore.

Thirdly, the Indonesian government will offer Inpex the freedom to determine the location of the refinery project.

"The decision to extend the contract with Inpex to 20 years was made, as the current contract will expire soon. The seven additional years have been given to compensate for changing the scheme from offshore to onshore project," Minister Jonan said after meeting with Kitamura. 

Currently, Inpex is conducting a "pre-front end engineering design" (pre-FEED) of Masela after receiving a work order from SKK Migas, the oil and gas regulatory agency.

Following Minister Jonans visit on May 16, 2017, a pre-FEED agreement was reached with an option of production capacity and an island.

Based on the order, it was stated that the capacity of the LNG refinery was set at 9.5 million tons per year and gas pipe production at 150 million cubic feet per day.

Pre-FEED is an important stage for formulating a revision of the Plan of Development (PoD).

The revision of PoD is being conducted to increase the LNG production capacity when the project is still to be carried out offshore.

The Masela Block contract, signed in 1998, is managed by Inpex, as the operator, with a 65 percent stake, and Shell Upstream Overseas Services, with a 35 percent stake. 

The Indonesian government is optimistic that Inpex would immediately start the development project.

During the work visit to Japan, Minister Jonan, at a meeting with LNG Japan Corporation on Monday, said Indonesias gas purchase policy was a longer contract with a fixed volume.

"The minister said that we will avoid as much as possible a split cargo. PT Pertamina (state-owned oil and gas company) will discuss the gas purchase in further detail. Indonesias main gas policy is meeting the domestic demand and only export after it is met," Dadan Kusdiana, the energy ministrys spokesman, noted. 

During the meeting with LNG Japan, Minister Jonan also called for detailed discussion with SKK Migas to reduce the cost of the LNG Tangguh project and LNG Benoa with regard to its high shipment cost, calling for efforts to reduce the price immediately.

During a meeting with Tokyo Gas on Tuesday (Oct 17), the company sought the Indonesian governments support for its LNG study in Sulawesi, including regulatory support to boost the gas business.

Tokyo Gas is currently studying LNG in Sulawesi and is committed to accelerating the completion of its study.

"Tokyo Gas plans to develop LNG refineries in Indonesia and is currently conducting a study in Sulawesi. Along with Pertamina, they are also currently conducting a LNG development project in Bojonegara, Banten. At the meeting with Tokyo Gas, the minister again emphasized the importance of efficiency," Dadan said.

Minister Jonan also told Tokyo Gas that the LNG purchase deal should be made under a long-term contract, and that the gas company will not only develop infrastructure but also generate power.

"The challenge is the high transportation cost in eastern Indonesia. To make the cost more efficient, the minister has urged to develop the power plant near an energy source or well," he said.

On Wednesday (Oct 18), the minister will be the key speaker at the LNG Producer Consumer Conference 2017.

He will shed light on sustainable LNG development in Indonesia. 

The LNG Producer Consumer Conference 2017, held by Japans Ministry of Trade and Industry and the Asia-Pacific Energy Research Center, is themed "Opportunities in LNG Markey Driven Innovation" and aims to increase the knowledge of global LNG market trends and development.

The conference was attended by more than a thousand participants from government offices, business entities, and research institutes.

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PT KAI plans to issue bonds worth Rp2 trillion
ANTARA News 20 October 2017

Jakarta (ANTARA News) - State railway company PT Kereta Api Indonesia (KAI) plans to issue rupiah-denominated bonds worth Rp2 trillion to finance its projects.

"Nearly 55 percent of the bond issue will be used to complete the construction of Soekarno-Hatta railway line, and 45 percent will be used to procure trains," PT KAI Finance Director Didiek Hartantyo said here on Thursday.

The bonds consist of series A and series B. The five-year series A bonds will be issued at a coupon of 7.25-8 percent, and the seven-year series B bonds will be issued at a coupon of 7.50-8.35 percent, he remarked.

He expressed optimism that the bonds will attract the market, thanks to the companys good experience and track record, strong cash flow, and good financial management profile.

Credit rating agency PT Pemeringkat Efek Indonesia (Pefindo) has assigned its AAA (triple A) rating for the bonds, thanks to the companys financial condition, he explained.

PT KAI has set itself the target of operating the Soekarno-Hatta railway line, which was built under Presidential Regulation No. 83/2011, by early next year.

"We have targeted to earn Rp122 billion from the operation of the Soekarno-Hatta line in 2018, and the figure is expected to increase to Rp557 billion in the following year," he added.

PT KAI also plans to rejuvenate its facilities with the aim of improving its services to passengers and increasing the number of passengers.

The bonds are expected to be offered to the public from Nov 14 to 16, with the allotment date scheduled for Nov 17.

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Bank Indonesia Maintains Reference Rate at 4.5 Percent
TEMPO.CO  20 October 2017

TEMPO.CO, Jakarta - Bank Indonesia (BI) has decided to maintain the reference rate at 4.5 percent. BI’s deposit facility interest rate is also maintained at 3.5 percent, and the lending facility interest rate stays at 5.0 percent.

“The BI Rates will apply on October 20, 2017,” Bank Indonesia’s economic and monetary policies department head Dody Budi Waluyo said in Jakarta on Thursday, October 19.

Dody revealed that the decision was made during the BI board of governors meeting that was held on October 18 and 19. The decision to maintain the rates is consistent with the effort to preserve macroeconomic and financial system stabilities, as well as to drive economic recovery while still taking global and domestic economic conditions into account.

Dody added that the interest rates are still sufficient to control the inflation rate. The consumer price index inflation in September was recorded at 0.13 percent month to month or 3.72 percent year on year, which is lower when compared to the average inflation rate over the last three years at 0.15 percent.

According to Dody, the central bank will continue to work with central and local governments to maintain the inflation rate at around 4.0 percent in 2017 and 3.5 percent in 2018 and 2019.

In addition, Bank Indonesia will also watch a number of risks posed by the US monetary policy and fiscal reform and geopolitical pressures in Europe and Korea. Other fiscal risks include the consolidation of the corporation and banking sectors.

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Four International Tourism Festivals to Be Held in S. Kalimantan
TEMPO.CO  20 October 2017

TEMPO.CO, Banjarmasin - South Kalimantan Tourism Board Head Heriansyah said that the local government will host four international tourism festival in 2018. He said that the administration continues to explore the region’s tourism potential in a bid to find other sources of income aside from mining commodities and palm oil.

Heriansyah elaborated that the events that are slated to be held in S. Kalimantan are the International Theatre Festival, the International Folk Festival, the International Dragon Boat Festival and bicycle tournament Tour de Loksado. “They are planned for 2018 but I don’t know the months. We continue to improve the concept,” Heriansyah said on October 19.

In addition, the Tourism Board plans to hold cultural event Pekan Gawai Dayak 2018. The event is aimed at introducing South Kalimantan tourism potential to national and international tourists. 

Heriansyah also expects international events to help tourism villages (desa wisata) in the region, namely Loksado in Hulu Sungai Selatan District, Angsana in Tanah Bumbu District and Tanah Laut District.

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Indonesia receives highest UN democracy index in ASEAN
ANTARA News 20 October 2017

Jakarta (ANTARA News) - The government of Indonesia has been consistently receiving the highest total score of democracy index, as compared to other ASEAN countries, according to Universal Periodic Review 2017 held by the United Nations Human Rights Council.

Indonesia scored 6.97 percent, while other ASEAN members, namely Philippines scored 6.94 percent, Malaysia scored 6.54 percent, Singapore scored 6.38 percent, and Thailand scored 4.97 percent, as noted by Theofransus Litaay, a deputy adviser at the presidential office, here on Thursday

The UNs review lauded Indonesian governments commitment to secure freedom of opinion and expression, which was indicated during the regional election in April 2017, where almost 42 million Indonesian citizens voted to choose the head of province, district, or city.

Even though the review rated the elections as independent, inclusive, and peaceful, Litaay noted that the government has some human right issues that still remain unsettled.

"Resolving the human rights issues in the past has been part of government's program with the Supreme Court," he remarked.

On the other side, the government is working to increase peoples welfare through social programs, such as providing Indonesian Health Card, Indonesia Smart Card, and public housing, as well as improving law enforcement, noted Litaay.

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Indonesia hands over IORA chairmanship to S Africa
ANTARA News 20 October 2017

Jakarta (ANTARA News) - Indonesia has officially handed over the chairmanship of the Indian Ocean Rim Ocean Association (IORA) to South Africa during the 17th IORA Council of Ministers Meeting in Durban, South Africa, on Wednesday.

Indonesian Ministry of Foreign Affairs website stated here on Thursday that Indonesia, whose delegation was led by Deputy Minister of Foreign Affairs A.M. Fachir, has completed its two-year term of IORA Chairmanship from 2015-2017 and will continue its participation in advancing the international organization consisting of coastal states bordering the Indian Ocean.

Indonesia will continue its active role in IORA, within the troika mechanism, alongside South Africa, as the chair, and the United Arab Emirate, as the future chair.

Fachir stated that IORA was yet to utilize its full potential to develop a stronger and more solid cooperation among the member states of IORA as well with its dialogue partners and other international organizations.

Member states of IORA expressed their highest appreciation to Indonesias chairmanship that promoted the profile of IORA and developed strong foundation for future cooperation.

One of Indonesias achievements during its tenure was that it had successfully conducted the first IORA Leaders Summit in March 2017 in Jakarta, which resulted in the Jakarta Concord and the IORA Action Plan.

South Africa will chair IORA for 2017-2019 term.

South African Minister of Foreign Affairs Maite Nkoana-Mashabane revealed in her opening remark in the ministerial meeting that during South Africas chairmanship, IORA will hold a theme of "Uniting the peoples of Africa, Asia, Australia, and the Middle East through enhanced cooperation for peace, stability, and sustainable development."

The 17th IORA Council of Ministers Meeting ratified the Durban Communique, which reemphasized the IORA member countries commitment to implement the Jakarta Concord and IORA Action Plan, as well as promote dialogue partner countries to contribute more to their cooperation with IORA.

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Bank Mandiri Books Rp3.8 trillion Worth of E-Money Transactions

TEMPO.CO, 20 October 

TEMPO.CO, Jakarta - Bank Mandiri recorded electronic money (e-money) transactions worth Rp3.8 trillion in the period of January-September 2017. The figure increased by 40 percent when compared to the same period of last year.

Bank Mandiri distribution director Hery Gunardi said his office has distributed 11 million e-money cards to support the non-cash national movement. In October, Bank Mandiri has issued 3 million additional e-money cards to be distributed by the end of this year.

“In late October, toll gates will only accept non-cash payment,” he said in Jakarta on Thursday, October 19.

Hery revealed that only 30 percent of the 11 million e-money cards are actively used. The additional cards are expected to boost the number of e-money usages in Indonesia.

In the period of January-August 2017, Bank Mandiri had served 6 million financial transactions worth Rp6.3 trillion. Currently, almost 95 transactions of the bank's customers are conducted via the company’s electronic network.

Bank Mandiri also recorded that 3.6 million transactions worth Rp3 trillion are conducted via ATM on a daily basis.

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