Infrastructure News Articles Indonesia

INDONESIA INFRASTRUCTURE INITIATIVE
INFRASTRUCTURE NEWS ARTICLES

WEEK ENDING 3 OCTOBER, 2014

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An Australian Government Initiative
Infrastructure News Week Ending 3 October, 2014

TRANSPORT

1. COLLABORATION: DKI - PT KAI Clean up Train Lines
KOMPAS, 2 October, 2014, Page 27, Section: Metropolitan, KERJA SAMA: DKI-PT KAI Tata Jalur Kereta
Provincial Government of Special Capital Territory of Jakarta (DKI Jakarta) collaborates with PT Kereta Api
Indonesia (KAI) and Ministry of Transportation to revamp train station and train line areas. The areas
along the rail lines will be revamped and developed into residential settlements that are integrated with
the mass transport mode. PAGE 1

2. INTEGRATED TRANSPORTATION: Trans Jabodetabek Bus Launched
KOMPAS, 2 October, 2014, Page 26, Section: Metropolitan, TRANSPORTASI TERINTEGRASI: Bus Trans
Jabodetabek Diluncurkan
The Trans Jabodetabek bus, an integrated transport mode between Jakarta and its partner regions,
namely Bogor, Depok, Bekasi, and Tangerang, was put into operation for the first time on Wednesday (1
October). The operation was marked by the launch of 10 Trans Jabodetabek buses serving the Ciputat
(South Tangerang) - Blok M (South Jakarta) route. PAGE 2

3. PU Spurs Road Projects in Sulawesi
Investor Daily, 30 September, 2014, Page 6, Section: Infrastructure & Transportations, PU Genjot Proyek Jalan
di Sulawesi
National Road Implementing Agency (BBPJN) VI of the Ministry of Public Works (PU) has targeted the
construction of a number of roads in Sulawesi to be achieved within the next five years. PAGE 3

4. KERTAJATI AIRPORT PROJECT MOVES ON: Husein Sastranegara Airport Starts to be
Developed
Investor Daily, 30 September, 2014, Page 6, Section: Infrastructure & Transportations, PROYEK BANDARA
KERTAJATI JALAN TERUS: Bandara Husein Sastranegara Mulai Dikembangkan
PT Angkasa Pura (AP) II has conducted the pile erection (groundbreaking) of Husein Sastranegara
Airports development project, Bandung, West Java (Jabar). The development project will increase the
terminal's capacity to 3.4 million passengers per year, or much higher than the current capacity of only
750,000 passengers. PAGE 4


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5. SUPPORTING ACCELERATION OF LOGISTICS INFRASTRUCTURE PROJECTS: Privately-
Owned Port Business Entities Ready to Allocate US$ 6 Billion
Investor Daily, 1 October, 2014, Page 6, Section: Infrastructure & Transportations, DUKUNG PROYEK
PERCEPATAN INFRASTRUKTUR LOGISTIK: Badan Usaha Pelabuhan Swasta Siap Gelontorkan US$ 6 Miliar
A number of privately-owned port business entities (BUP) in Indonesia have expressed readiness to pour
investment funds worth US$ 6 billion to support accelerated projects for the development of port
logistics infrastructure during the term of the new government in order to reduce logistics costs
nationwide. This private investment is certainly cheaper than the estimated funding requirement made
by the port operators of Pelindo and it can be realised more quickly than the present plan for the next
five years. PAGE 7

6. RP 20 BILLION PER MONTH REQUIREMENT: AirNav Adds Navigation Management
of 168 Airports
Investor Daily, 2 October, 2014, Page 6, Section: Infrastructure & Transportations, BUTUH RP 20 MILIAR PER
BULAN: AirNav Tambah Pengelolaan Navigasi 168 Bandara
Ministry of Transportation (Kemenhub) has handed the operations of air navigation services at 168
airports managed by the Airport Management Office of Directorate General of Air Transport to the
Indonesian Air Navigation Service Operator Agency (LPPNPI), or AirNav Indonesia. PAGE 8

7. TRANS-JAVA TOLL ROAD: Solo Kertosono Segment Threatened with Takeover
Bisnis Indonesia, 29 September, 2014, Page 29, Section: Transportasi & Infrastruktur, TOL TRANS-JAWA: Ruas
Solo-Kertosono Terancam Diambil Alih
The government said that the management of the Solo - Ngawi and Ngawi - Kertosono toll road segments
by PT Thiess Contractor is at risk of being taken over by another party because the company is suspected
to have financial problems. PAGE 10

8. PORT HOLDING COMPANY ESTABLISHMENT: Parliament Criticises Pelindo IIs Plan
Bisnis Indonesia, 30 September, 2014, Page 25, Section: Transportasi & Infrastruktur, PEMBENTUKAN HOLDING
PELABUHAN: DPR Kritik Rencana Pelindo II
Peoples Representative Council (DPR) has criticised the proposal of PT Pelabuhan Indonesia II, which will
merge all port operators in Indonesia, because it is considered that the plan would not be effective in
balancing development and increasing the productivity of ports. PAGE 12

9. AIRPORT DEVELOPMENT: AP II Sets aside Rp 10 Trillion to Polish Nine Locations
Bisnis Indonesia, 30 September, 2014, Page 24, Section: Transportasi & Infrastruktur, PENGEMBANGAN
BANDARA: AP II Siapkan Rp 10 Triliun Poles 9 Tempat
PT Angkasa Pura II is preparing an initial stage investment worth Rp 10 trillion to rejuvenate and develop
nine airports starting next year. PAGE 14

10. LONG- AND MEDIUM- DISTANCE, ECONOMY-CLASS TRAINS: Subsidy Withdrawn,
Prices Jump
Bisnis Indonesia, 1 October, 2014, Page 24, Section: Transportasi & Infrastruktur, KA EKONOMI JARAK SEDANG-
JAUH: Subsidi Dicabut, Harga Melonjak
PT Kereta Api Indonesia will charge tariffs without subsidy and partial tariffs on long-distance and
medium-distance economy-class trains effective from 1 January 2015. The average new tariffs for non
public service obligation (PSO) trains will be Rp 90,000 - Rp 150,000. PAGE 17

11. TRANS-SUMATERA TOLL ROAD: Government Begins Construction of First Two
Segments
Bisnis Indonesia, 1 October, 2014, Page 25, Section: Transportasi & Infrastruktur, TOL TRANS-SUMATRA:
Pemerintah Awali Pembangunan 2 Ruas Pertama

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TRANS-SUMATERA TOLL ROAD: Government Begins Construction of First Two Segments
The government will begin the construction of two out of the four priority trans-Sumatera toll road
segments on 8 October 2014, namely Medan - Binjai and Palembang - Indralaya. PAGE 19

12. PORTS: Lino: Cilamaya Project Should Be Stopped
Bisnis Indonesia, 2 October, 2014, Page 29, Section: Transportasi & Infrastruktur, KEPELABUHANAN: Lino:
Proyek Cilamaya Disetop Saja
The government's plan to develop the Port of Cilamaya has been assessed by the port service state-
owned enterprise (BUMN) PT Pelindo II, instead, as something that does not need to be pursued further,
following the construction completion of the Port of New Priok in Kalibaru, North Jakarta. PAGE 21

13. PORT SECTOR HOLDING COMPANY: Dahlan: Pelindo Merged in 2015
Bisnis Indonesia, 3 October, 2014, Page 28, Section: Transportasi & Infrastruktur, PERUSAHAAN INDUK
PELABUHAN: Dahlan: Pelindo Dilebur 2015
State-Owned Enterprises (BUMN) Minister, Dahlan Iskan, has affirmed that PT Pelabuhan Indonesia I, II,
III, and IV as well as related BUMNs should be merged into a single holding company next year in order to
accelerate the implementation of the sea tollways. PAGE 24

WATER AND SANITATION

14. Waste Management Facilities Inadequate
Media Indonesia, 3 October, 2014, Page 14, Section: Humaniora, Fasilitas Pengelolaan Limbah Minim
Environment Minister, Balthasar Kambuaya, said that the use of chemicals has continued to rise in line
with the scores of industrial activities that support economic growth. This can be seen from the increase
in the number of permits for the management of hazardous and toxic waste (B3) issued by the Ministry
of Environment (KLH). PAGE 26

OTHER

15. INFRASTRUCTURE: World Bank Readies Rp 6 Trillion to Assist Local Governments
KOMPAS, 2 October, 2014, Page 17, Section: Ekonomi, INFRASTRUKTUR: Bank Dunia Siapkan Rp 6 Triliun Bantu
Pemda
The World Bank has allocated an additional US$ 500 million, or equivalent to Rp 6 trillion, to improve the
accountability of infrastructure projects in the regions. The programme targets improvements of the
financial statements, technical matters, and enhanced monitoring of public services sourced from the
special allocation fund (DAK) and contributions from local governments. PAGE 27


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1. COLLABORATION: DKI - PT KAI Clean up Train Lines

KOMPAS, 2 October, 2014, Page 27, Section: Metropolitan
Author not mentioned

JAKARTA, KOMPAS - Provincial Government of Special Capital Territory of Jakarta (DKI Jakarta)
collaborates with PT Kereta Api Indonesia (KAI) and Ministry of Transportation to revamp train station
and train line areas. The areas along the rail lines will be revamped and developed into residential
settlements that are integrated with the mass transport mode.

The signing of the cooperation was done by Deputy Governor of DKI Jakarta Basuki Tjahaja Purnama,
President Director of PT KAI Ignatius Jonan, and Director General of Railways of the Ministry of
Transportation Hermanto Dwi Atmoko, Wednesday (1 October), at Jakarta City Hall.

The cooperation covers two areas. First is the measure to clean up and revamp the areas under the
overpass between Kota Station and Manggarai Station, as well as the land areas parallel to the railway
lines within DKI Jakarta.

The second one pertains to the development of the areas around train stations into residential
settlements that are integrated with the rail transport mode.

Jonan said that the cooperation is intended to make the rail services, especially in Jakarta, to become
even better, both in terms of the stations and the train lines. "In some of the land areas belonging to PT
KAI, high-rise rusunawa [low-cost rental apartment towers] will be built. Greater details about the
locations, land areas, and the commercial aspects will be discussed later. We hope that, with the
construction of rusunawa, the environment around the stations would not become more rundown, but it
would become more orderly," he said.

The cooperation on land area clean-up and arrangement involves removal of all matters not related to
railway services, such as objects and buildings that could amount to disruption of train trips. As a pilot,
area clean-up was done under the overpasses between Mangga Besar Station - Sawah Besar Station and
Jayakarta Station - Mangga Besar Station, as well as the areas parallel to railroads under the overpass
between Mangga Besar - Jayakarta - Mangga Dua stations.

Hermanto explained that the clean-up measures in the areas have been carried out following a major fire
three years ago, which resulted in disruption to the train trips. "Since then we have conducted demolition
[of buildings]. Indeed, there are obstacles and resistance from residents. However, with this agreement
we expect the clean-up measures under the train overpass could be done as well as possible," he said.

Currently, Hermanto said further, trains transport 650,000 - 700,000 passengers every day, so it is
expected there will be no other activities that endanger their tracks.

Inspection roads
After the land areas under the train overpasses and parallel to the rail tracks have been cleaned up, DKI
Provincial Government will build inspection roads, collector roads, parks, and open green spaces. In the
station areas, rusunawa buildings that are integrated, proper and affordable for the people will be
constructed.

Construction of these low-cost apartment blocks is expected to reduce the slums that have sprung up


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along the railway tracks. Residents affected by the clean-up measure will also be relocated to the high-
rise apartments.

Basuki said that, based on a survey conducted by DKI Jakarta Provincial Government, nearly half of the
residents of the slum areas are tenants. "Those who make commotion (when disciplinary actions are
taken) are people who rent out the land. They protest that the measures are inadequately socialised or
have not been socialised at all. I do not want this kind of excuse anymore," he said.

He ordered the regional secretary to record and note each socialisation activity to the residents around
the rail tracks. Basuki also ordered the landscaping services department to immediately build gardens
below the train overpasses, so that they will not be occupied by people again.

"We also hope that PT KAI increases the number of trains. Let the train passes every minute; it does not
matter if congestion occurs. I have also asked the transportation department to closed level crossings,"
said Basuki.

He expressed hope that, once everything has become neat, PT KAI will also build new stations that are
equipped with a park and ride facility, so that more people will ride the train and leave their personal
vehicles behind.

DKI Jakarta Regional Secretary, Saefullah, said that, for the first step, the clean-up measures will be
carried out around the BMW Park, North Jakarta. On the north side of the park there are still many illegal
settlements standing on the edges of the rail tracks.

Tanah Abang Subdistrict Head, Hidayatullah, said that clean-up measures at the edges of the rail tracks
within Tanah Abang territory will continue to be made. "The controlling measures will continue. We will
coordinate with PT KAI," he said.

Previously, controlling measures were taken at a location called Bongkaran, around Tanah Abang Station,
which was made into a settlement. (FRO/ART)

2. INTEGRATED TRANSPORTATION: Trans Jabodetabek Bus Launched

KOMPAS, 2 October, 2014, Page 26, Section: Metropolitan

SOUTH TANGERANG, KOMPAS - The Trans Jabodetabek bus, an integrated transport mode between
Jakarta and its partner regions, namely Bogor, Depok, Bekasi, and Tangerang, was put into operation for
the first time on Wednesday (1 October). The operation was marked by the launch of 10 Trans
Jabodetabek buses serving the Ciputat (South Tangerang) - Blok M (South Jakarta) route.

After this route, Directorate General of Land Transport of the Ministry of Transportation will develop the
Trans Jabodetabek routes from Depok, Tangerang, Bekasi, and Bogor.

Director General of Land Transport of the Ministry of Transportation, Suroyo Alimoeso, explained that
the Trans Jabodetabek bus is similar to TransJakarta-integrated border transport (APTB) that has been in
operation in the last two years in the Greater Jakarta area. The difference is that the APTB is a transport
mode serving the border areas, for example, between the city of Tangerang and Jakarta. In contrast,
Trans Jabodetabek serves the entire Jabodetabek.


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"We try to manage mass transport into one system whose rules come from the national level.
Meanwhile, APTB is managed by DKI Jakarta government and its partner regions," said Suroyo.

General Director of Perum PPD, Pande Putu Yasa, said that the Trans Jabodetabek bus is slightly different
from the APTB. The Trans Jabodetabek bus has a blue colour and it is equipped with two monitoring
cameras and GPS to monitor the bus trip. A microphone is also available at the speedometer to facilitate
the drivers communication with passengers. In APTB bus, such devices are not available.

Chairman of the Supervisory Board of Perum PPD, Hasudungan Aritonang, said that so far during the trial,
there could be seen locations of congestion at peak hours, during 06:00 - 08:00 hours, at Ciputat Market,
UIN, Pondok Pinang, and the Pondok Pinang I bus sop of TransJakarta. Starting from 16:00 hours,
congestions occurred in Blok M and Pertamina Hospital.

A week before the launch, the bus, with a capacity of 32 seats and 50 standing passengers, already served
passengers, but it was still in the testing phase. After the operation, passengers who ride the Trans
Jabodetabek bus from Ciputat are required to pay Rp 7,000 per one-way trip.

Suroyo said that by the end of this year, in December, there will be an additional 70 buses given to PPD to
help the operation, both Trans Jabodetabek, TransJakarta, and also APTB buses.

South Tangerang Mayor, Airin Rachmi Diany, welcomed the presence of the Trans Jabodetabek bus. The
population density in her administrative region, which covers an area of 147.19km
2
, reached 1.3 million
people per km
2
.

Nearly 50 percent of the population of South Tangerang are working in Jakarta. Some of them work in
Bodetabek [Bogor, Depok, Tangerang, Bekasi]. According to Airin, the Trans Jabodetabek bus is expected
to be an alternative mode of transport for the community. (PIN)

3. PU Spurs Road Projects in Sulawesi

Investor Daily, 30 September, 2014, Page 6, Section: Infrastructure & Transportations

JAKARTA - National Road Implementing Agency (BBPJN) VI of the Ministry of Public Works (PU) has
targeted the construction of a number of roads in Sulawesi to be achieved within the next five years.

"Central Sulawesi has an outlet of Pantolohan Port; this should be linked from the West Coast and the
East Coast through the western and eastern traffic routes," said Chief of BBPJN VI, Deded Permadi
Sjamsuddin, as quoted from the official website of the Ministry of Public Works on Monday (29
September).

According to Deded, in Central Sulawesi (Sulteng) there is already the Palu - Parigi road corridor, namely
the existing road that has a stable soil structure. With that condition, he added, his office is faced with
the choice whether to improve the existing road or create a new route that has been approved by the
Provincial Government (Pemprov) of Central Sulawesi, because there is the Palu Special Economic Zone
(KEK) there.

"Its feasibility is still being studied, technically and financially. The Palu Ring [Road] is to support the Palu


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KEK. The Palu - Parigi Project is part of the MP3EI projects, if everything is feasible, it will be realised two
years from now, that is 2016," he said.

Another strategic infrastructure in the province of Central Sulawesi is the planned development of
Pantoloan Flyover in the Western route. The flyover construction plan is still being assessed through a
feasibility study, especially from the financial perspective. In the province of West Sulawesi, BBPJN VI will
build a new road from Mamuju towards Mamasa - Makale - Toraja. In addition, Provincial Government of
West Sulawesi has proposed the construction of a new arterial road that connects to the port.

"In the next five years, BBPJN VI is targeting the Mamuju - Mamasa road segment toward the border of
South Sulawesi to be operated," he said.

Deded also explained that Public Works will build an underpass from Makassar - Maros heading to the
airport toll road, due to the increasing traffic demand, and the project should be completed in 2016.
Meanwhile, road widening will be done from Makassar to Bone in mid-2015.

"Overall, some 90.69 percent of the 5,700km national roads under BBPJN VI has achieved a solid
condition status," he said.

Not only just road access, in mid-August, the government started the construction (groundbreaking) of
the first phase of TransSulawesi Railway (KA) project of the Makassar - Pare Pare route along 145km
worth Rp 9.65 trillion. Construction of the first phase of the railway line, which is part of the Master Plan
for the Acceleration and Expansion of Indonesian Economic Development (MP3EI), is a pioneering project
of the railway in eastern Indonesia.

Director General of Railways of the Ministry of Transportation (Kemenhub), Hermanto Dwiatmoko, said
that the estimated construction cost of the Makassar - Parepare railway line of Rp 9.65 trillion has been
allocated, among others, for land acquisition, railway infrastructure, support facilities, and the provision
of facilities.

"In 2015, the government allocated Rp 261 billion of State Budget funds for the construction of a double
track railway line along 30km in Barru Regency, South Sulawesi. Meanwhile, this year, land acquisition
along 30km is pursued in Barru Regency using funds from the local government budget (APBD) of South
Sulawesi Provincial Government," explained Hermanto recently. (tm)

4. KERTAJATI AIRPORT PROJECT MOVES ON: Husein Sastranegara
Airport Starts to be Developed

Investor Daily, 30 September, 2014, Page 6, Section: Infrastructure & Transportations
By Laila Ramdhini

JAKARTA - PT Angkasa Pura (AP) II has conducted the pile erection (groundbreaking) of Husein
Sastranegara Airports development project, Bandung, West Java (Jabar). The development project will
increase the terminal's capacity to 3.4 million passengers per year, or much higher than the current
capacity of only 750,000 passengers.

President Director of PT Angkasa Pura II, Tri S Sunoko, explained that the number of passenger
movements at Husein Sastranegara Airport in 2013 had reached 2.46 million people, or approximately
300 percent of the available capacity.


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"The spirit of this development is to make Husein Sastranegara Airport as an icon and pride of Bandung,
in addition, of course, it is to maintain the level of service amid the rapid pace of growth in the number of
air passengers," Tri said in a statement on Monday (29 September).

When asked for confirmation by Investor Daily, Development Director of Angkasa Pura II, Salahuddin Rafi,
estimated the development of the airport in Bandung would cost Rp 139 billion, with funds derived from
internal sources. The development project is targeted to take 12 months from groundbreaking, and it will
involve renovation and expansion of the passenger terminal, from an existing area of 5,000m
2
to become
17,000m
2
.

"Hussein Airport will be developed to improve service, safety, and comfort of passengers. The terminal
capacity will also increase from 750 thousand passengers to 3.2 million passengers per year," he said.

He explained that the development of Husein Sastranegara Airport leads to the concept of modern yet
traditional [airport character]. The design of the new terminal building is inspired by the traditional
architecture of the roof shapes of West Java traditional houses, i.e. Leuit and Julang Ngapak, as well as
the provinces traditional weapon, i.e. Kujang.

"The design will be modern futuristic, but with an interior that provides warmth from the freshness of the
air in the City of Bandung," said Rafi.

Husein Sastranegara Airport will be made with shades of indigo blue, as produced by the Tarum plant.
This plant is a natural producer of indigo blue colour, and was often used by the ancient Sundanese
people to dye clothes.

"The development is on the existing airport but still adopts international standards. The development of
Hussein Airport is also being done to meet the demand in West Java. This is because the airport will still
be the main airport in West Java, before Kertajati Airport is completed and becomes operational," said
Rafi.

In addition, PT Angkasa Pura II is preparing quite a large commercial area in order to increase the
contribution of non-aeronautical revenues at Husein Sastranegara Airport. After its development, the
commercial area at Husein Sastranegara Airport will reach about 3,000m
2
, much bigger than the existing
area of just 500m
2
.

This year, international and domestic passenger movements at Husein Sastranegara Airport are
estimated at 3.08 million passengers. Airlines that operate at the airport include AirAsia, Lion Air, Garuda
Indonesia, Citilink, Express Air, Silk Air, Wings Air, Susi Air, and Tiger Air. Husein Sastranegara Airport has
one runway measuring 2,500m x 45m, which can accommodate flights with aircraft of Boeing 737-800
NG, Airbus A320 and Boeing 737-900 ER sizes.

"Through the development that will increase the capacity of the terminal, it is expected that the people
in Bandung and surrounding areas will get optimal services at Husein Sastranegara Airport," said GM of
Husein Sastranegara Airport, Yayan Hendrayani.

Kertajati Airport
Meanwhile, on the sidelines of the first excavation work for the expansion of Husein Sastranegara Airport
terminal, State-Owned Enterprise (BUMN) Minister, Dahlan Iskan, said that West Java International


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Airport (Kertajati) in Majalengka should become a reality, because it will be the future of aviation services
in West Java.

"Kertajati Airport must be realised and the [project] moves on, in view of its ongoing development
process," said Dahlan.

He said that West Java should have an airport with sizable capacity and expansion potential, because it is
quite difficult to expand Husein Sastranegara Airport in Bandung.

"Today (Monday, 29 September), we did the groundbreaking for Husein Airports terminal expansion to
increase its capacity to 3.5 million passengers. But in the future, there should be a new airport whose
capacity could be twice as big or more, and it is expected this will be in Kertajati," he explained.

On that occasion, he said, determination and hard work to convince [the relevant parties] of the large
value infrastructure development are greatly needed.

"There needs to be determination and certainly a strong will to make it happen. When it is done,
everything can be realised," said Dahlan.

With regard to that matter, he said, the construction of the toll road over the sea in Benoa, Bali, which
was originally thought to be impossible, proved to be doable. And, it has now become a solution to
resolve traffic problems in the area.

With regard to the possibility of the realisation of Kertajati Airport, which represents collaboration
between West Java and PT Angkasa Pura II, Dahlan said that everything has been considered in terms of
services and potentials.

"Later (the management) will be run by the company (Angkasa Pura II)," he said.

Meanwhile, West Java Governor, Ahmad Heryawan, said that Kertajati Airport development has
continued to be pursued and presently its runway is already built.

The plan is for the airport in the eastern part of West Java to be built on an area of 1,600ha and
developed into an aerocity industrial zone, with a total area of 5,000ha.

According to Heryawan, West Java Provincial Government is committed to realise the international
airport, whose process was already initiated in 2008. The airport in due course will be equipped with the
Cisumdawu toll road and an airport railway line.

"Kertajati Airport will be the answer to the growth of the aviation industry in West Java routes. When
Kertajati is already in operation, Husein Airport will be a special purpose airport," he said.

Meanwhile, Head of Transportation Department of West Java, Deddy Taufik, said that the runway of
Kertajati Airport is already built and it is a matter of building the terminal[s] and other facilities.

"The runway is already built; a land area of 1,600ha is wide enough for an international airport.
Moreover, the airport will subsequently be connected with an airport train line and the Cisumdawu toll
road," he explained.

Development of Husein Sastranegara Airport


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Expansion of passenger terminal area from 5,000m
2
to 17,000m
2

Passenger accommodation capacity rising from 750,000 people to 3.4 million people
Until the end of 2013, the number of passenger movements reaches 2.46 million people or about 300
percent of available capacity
Cost of development Rp 139 billion
Airport design concept: modern yet traditional
Source: PT Angkasa Pura II

5. SUPPORTING ACCELERATION OF LOGISTICS INFRASTRUCTURE
PROJECTS: Privately-Owned Port Business Entities Ready to
Allocate US$ 6 Billion

Investor Daily, 1 October, 2014, Page 6, Section: Infrastructure & Transportations

JAKARTA - A number of privately-owned port business entities (BUP) in Indonesia have expressed
readiness to pour investment funds worth US$ 6 billion to support accelerated projects for the
development of port logistics infrastructure during the term of the new government in order to reduce
logistics costs nationwide. This private investment is certainly cheaper than the estimated funding
requirement made by the port operators of Pelindo and it can be realised more quickly than the present
plan for the next five years.

"Even without a letter of guarantee from the government, [we will invest] as long as we are given a
chance to manage ports, which have been monopolised by Pelindo all this time," said Vice Chairman of
the Standing Committee on Logistics Actors and Service Providers of Kadin Indonesia, Zaldi Masita, in a
written statement on Tuesday (30 September).

He explained that the maritime vision of the Joko Widodo - Jusuf Kalla Government, which will provide
investment opportunities to the national private sector, has been greeted positively by the national
logistics business actors.

"Implementation of the maritime vision can be a starting point to create maritime logistics services that
are efficient and effective, as well as highly competitive, by way of ending the domination of port
operatorship in Indonesia in the hands of BUMNs all this time," said Zaldi in a written statement received
by Investor Daily, Tuesday (30 September).

Zaldi explained that a number of privately-owned port business entities are ready to provide investment
funds for the port logistics infrastructure sector if the Joko Widodo - Jusuf Kalla Government truly
partners with the national private sector to develop strategic ports in the country. Currently, Ministry of
Transportation (Kemenhub) has established 25 strategic ports in Indonesia with 24 port units being fully
controlled by port sector BUMNs, and the other port is controlled by the Batam Authority Government.

Meanwhile, in the Blueprint of the National Logistics System (Sislognas), the government has set two hub
ports, namely Bitung Port and Kuala Tanjung Port, as well as the planned development of Cilamaya Port,
which is expected to be developed with the private sector in order to reduce the burden on the State
Budget (APBN).


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Shipping Law No. 17/2008 mandates arrangements in the field of port affairs, containing provisions
concerning the abolition of monopoly in the operation of the ports, separation between the functions of
regulator and operator, as well as allowing proportional roles for local governments and the private
sector to play in the organisation of national ports.

Currently, the cost of logistics in Indonesia is still deemed very wasteful, reaching 24 percent of the gross
domestic product (GDP). The port sector is still listed as one of the causes of logistics inefficiency because
of limited infrastructure, whilst, on the other hand, port tariffs and other charges have tended to
increase.

Zaldi expects the Government of Joko Widodo and Jusuf Kalla to no longer rely on APBN to develop
strategic ports in Indonesia, but increase the involvement of national investors and local governments,
instead. "Shipping Law already gives space to the private sector and local governments in the
organisation of ports, but this has yet to happen," he said.

According to him, the government can encourage the port sector BUMNs to pursue market penetration
overseas, especially in anticipation of the globalization of trade.

"The port sector BUMNs have the capacity to expand abroad in order to support the national export
trade. The incoming government should be able to target the port sector BUMNs to seek overseas
expansion," he said. (lrd)

6. RP 20 BILLION PER MONTH REQUIREMENT: AirNav Adds
Navigation Management of 168 Airports

Investor Daily, 2 October, 2014, Page 6, Section: Infrastructure & Transportations
By Laila Ramdhini

JAKARTA - Ministry of Transportation (Kemenhub) has handed the operations of air navigation services at
168 airports managed by the Airport Management Office of Directorate General of Air Transport to the
Indonesian Air Navigation Service Operator Agency (LPPNPI), or AirNav Indonesia.

Acting (Plt) Director General of Air Transport of the Ministry of Transportation, Santoso Eddy Wibowo,
said that the handing of navigation management from the government to the red-plated [state-owned]
company is part of the implementation of Law No. 1/2009 on Aviation and Government Regulation No.
77/2012 on Perum [Public Company] LPPNPI.

"The transfer of units related to the provision of air navigation services in airports under UPT [Technical
Implementation Unit] and UPBU [Public Airport Implementation Unit] will take place no later than two
years after the establishment of the perum," he said in Jakarta, Wednesday (1 October).

This transfer involves technical and operational components, assets and finance of air navigation, as well
as human resources. Therefore, he continued, his office has appealed to LPPNPI to always ensure the
smooth operation of air navigation services in accordance with legislation. "This is to be achieved by
ensuring the operational continuity of air navigation services, assistance with data provision, and taking
care of assets," he said.

In the same place, President Director of LPPNPI, Icwanul Idrus, said that the company needs additional
operational funds of Rp 20 billion per month for the management of navigation in the 168 airports


9

belonging to the Technical Implementation Unit of the Ministry of Transportation. The BUMN will begin
managing navigation services, among others at Hang Nadim Airport in Batam (owned by Kemenhub), as
well as Siborongborong Airport, Silangit Airport, and North Tapanuli Airport, belonging to PT Angkasa
Pura II.

Icwanul said that the merging of navigation operatorship at the airports belonging to PT Angkasa Pura
(AP) I and II, as well as the UPT of Kemenhub, is mandatory according to Law (UU) No 1/2009 on Aviation,
even though his company has to seek additional operational funds of Rp 20 billion per month .

The law stipulates that air navigation management be performed by an independent business entity,
outside both the airport operators, both Kemenhub and AP I and AP II. "Like it or not, we have to transfer
revenues from busy airports to be allocated as subsidies for the UPT airports," he said.

Besides, he added, in transferring the management of these services, inventory and verification still need
to be done together between Directorate General of Air Transport and LPPNPI pertaining to the transfer
of assets, human resources, and finance. This, he said, is an effort to anticipate the occurrence of any
operational gap in services, personnel administration and financial management at the 168 airports.

In the minutes of the handover event, it is also noted that a periodic, three-monthly reporting in 2015 will
be done to evaluate the process of operational transfer of air navigation services at the airports. "This is
done to ensure the smooth running of services, so that the level of safety and regularity of aviation can
be maintained and improved," he said.

Domestic Passengers Up 26.82 Percent
Meanwhile, the number of air passengers in domestic routes during August 2014 was 5.7 million people,
or rising 26.82 percent compared to July 2014. The number of international air passengers in August was
recorded at 1.1 million people, up 1.97 percent from the previous month.

Head of the Central Statistics Agency (BPS), Suryamin, said that the rising number of air passengers in
August 2014 occurred as a result of the reverse flow of Lebaran [Eid] traffic.

"In August 2014, there was a reverse flow of mudik [home-coming] traffic after Lebaran. Here, it is clearly
illustrated; in July there was not any visible increase in the number of passengers, even the number
temporarily declined, and now (August) all rose up," said Suryamin in a press conference yesterday.

In July 2014, a decrease in the number of transport mode users, especially air transport, was in line with
the decrease in the number of foreign tourists. In July 2014, BPS recorded a decline in foreign tourist
arrivals, which only reached 777.2 thousand people. The decrease coincided with the month of Ramadan.
However, tourist arrivals went back up again in August 2014, with 826.8 thousand visits.

"However, the increase in the number of passengers, particularly air passengers, did not only occur
because of the rising number of foreign tourists, but also there were domestic travellers, business trips,
and other things," he said.

Meanwhile, the cumulative number of air passengers from January to August 2014 was recorded at 47.5
million, up 5.82 percent from the actual number in 2013. The details are as follows: the cumulative
number of domestic passengers until August 2014 reached 38.5 million people, up 6.02 percent, and the
number of international passengers reached nine million people, up 4.95 percent compared to the same
period in 2013 (m01)


10

7. TRANS-JAVA TOLL ROAD: Solo - Kertosono Segment Threatened
with Takeover

Bisnis Indonesia, 29 September, 2014, Page 29, Section: Transportasi & Infrastruktur
By Fitri Sartina Dewi
fitri.sartina@bisnis.co.id

JAKARTA - The government said that the management of the Solo - Ngawi and Ngawi - Kertosono toll
road segments by PT Thiess Contractor is at risk of being taken over by another party because the
company is suspected to have financial problems.

PT Thiess Contractor is a toll road business entity (BUJT) and at the same time a majority shareholder in
the two toll road segments of Solo - Ngawi and Ngawi - Kertosono (Solo - Kertosono).

The company is known to have handed over the management of the Solo - Ngawi segment to PT Solo
Ngawi Jaya (SNJ), while the Ngawi - Kertosono segment has been handed over to PT Ngawi Kertosono
Jaya.

Director General of Highways (Bina Marga) of the Ministry of Public Works, Djoko Murjanto, said that
there have been indications of a change or takeover happening to the two toll road segments that are
parts of the Trans-Java.

This is because, he said, PT Thiess Contractor, as the BUJT, is deemed to lack sufficient funds to carry out
the construction. "It looks like there will be a replacement, as there have been indications that they have
difficulties in terms of funding," he said on Sunday (28 September).

Until now, he said, the construction progress of Solo - Ngawi toll road segment has not been significant,
i.e. at around four percent, whereas the amount of land that has been acquired has reached 90 percent.

Djoko revealed that a number of companies have expressed interest to take over the physical
construction of the two toll road segments.

However, he declined to mention the names of companies that have expressed interest to take over.
"There are some, but this is not yet certain, right? So, we cannot mention the names [of the companies]
yet," he said.

When asked for confirmation, Communications Specialist of PT Thiess Contractor, Imam Ghazali, said that
his company is still committed to continuing the physical development of the Solo Ngawi and Ngawi -
Kertosono toll road segments.

He instead denied the allegations about funding difficulties and any plans of a takeover by another
company. "That matter [i.e. lack of funding] is not true. The fact is that activities on the field have
continued to take place," he said.

Presently, he continued, construction progress on Solo - Ngawi segment has reached four percent, with
land filling work reaching 10km, and also there is installation of reinforced concrete pipes (RCP), erection
of piles, culverts, and permanent fencing.

NOT YET STARTED


11

Meanwhile, for the Ngawi - Kertosono segment, this BUJT has not yet started the construction process
because the land acquisition process is still at 65 percent.

Based on his explanation, to fund the construction of two toll road segments, PT Thiess Contractor has
received a loan from Leighton Finance. However, Imam was reluctant to mention the amount of loan
proposed by his company.

Djoko Murjanto said that the government will start the construction of the Nganjuk - Kertosono section
that represents the governments portion [of responsibility] in the Solo - Kertosono toll road project.

"We will begin works on the 25km-long Nganjuk - Kertosono section of the Solo - Kertosono toll road
construction project, which is the portion of government support at the beginning of next year," he said.

He explained that the government has an obligation to build two sections of the toll road. The two
sections are the Solo - Ngawi section along 15km and the Nganjuk - Kertosono section along 25km.

"The governments portion, with these sections, has a total length of 40km; the 15km section of Solo -
Ngawi is already underway, and now the Nganjuk - Kertosono section along 25km will soon start
[construction]," he said.

He said that the governments provision of support in the form of physical construction is based on the
assessment that the toll road segment is less than viable economically. Currently, he added, the
construction process of Nganjuk - Kertosono section has entered the contractor tender process.

However, to carry out the physical construction of the Nganjuk - Kertosono section, until now, the
government is still waiting for the disbursement of a loan from China worth US$ 360 million.

"The contractor tender has begun, so we expect a down payment of 15 percent - 20 percent of the total
loan from China to be disbursed soon by December 2014, so that the construction process can begin in
January next year," he explained.

For the physical construction at the 15km-long Solo - Ngawi section, Djoko explained that his party has
almost completed the construction process, with its progress to date already reaching 90 percent. In the
next year, the work on this section is targeted to be completed.

"We are optimistic we can finish the two sections as soon as possible. After they are completed, we can
pursue Thiess Contractor to immediately finish the construction of their parts," he said.

Profile of Two Segments of Solo - Kertosono Toll Road
1. Segment of Solo - Ngawi
BUJT : PT Solo Ngawi Jaya (SNJ)
Length : 90 km
Number of Sections : 4
Investment : Rp 5.14 trillion
Land Cost : Rp 995 billion
Operational Target : 2016
Land Progress : 90.5 %
Construction Progress : 4 %

2. Segment of Ngawi - Kertosono


12

BUJT : PT Ngawi Kertosono Jaya (NKJ)
Length : 87 km
Investment : Rp 3.83 trillion
Operational Target : 2016

Source: Ministry of PU, from various sources, processed
BISNIS/HUSIN PARAPAT

8. PORT HOLDING COMPANY ESTABLISHMENT: Parliament Criticises
Pelindo IIs Plan

By Muhammad Hilman
redaksi@bisnis.co.id

JAKARTA - Peoples Representative Council (DPR) has criticised the proposal of PT Pelabuhan Indonesia II,
which will merge all port operators in Indonesia, because it is considered that the plan would not be
effective in balancing development and increasing the productivity of ports.

A company like Pelindo, which focuses on infrastructure development, is feared to only favour the
development of certain ports. Meanwhile, greatly needed development plans for other ports will be
inhibited, instead, because of the ego of the port operator.

Commission VI Chairman of DPR, Airlangga Hartanto, said that what Pelindo II meant about giving
favourable attention would happen in the development of Tanjung Priok Port alone. In fact, along with it,
the government is preparing the construction of Cilamaya Port, which is considered very urgent to be
built.

If a model of mutual constriction is adopted for infrastructure development, it is considered an adverse
impact on economic growth, and it may even clog it.

"Cilamaya [could] be inhibited although it is much needed by industry. Pelindo, through the Ministry of
Transportation, has put in a condition that Cilamaya could be built if the expansion of Tanjung Priok has
already reached a breakeven point (BEP)," he said on Monday (29 September).

On the other hand, port operators have different performances. Airlangga took the example of Pelindo
III, which has been able to accelerate the development and expansion of port infrastructure without
encountering any significant problems, whereas Pelindo II is still facing a lot of internal struggles.

"For [the development of] infrastructure, [as what is proposed] Pelindo is not effective to be made a
holding [i.e. parent company]. Later, there will be favouring of certain ports," he said.

In a discussion on the National Logistics System Coming to MEA 2014, Impact and Opportunities, which
was organised by Bisnis Indonesia and PT Pelindo II, Thursday (25 September), Director of Pelindo II,
Richard Joost Lino, said that port operators in Indonesia need to be merged into a single holding company
in order to increase logistics efficiency.


13

The merger was assessed to make all of the ports to have the same minimum service standards. The port
operators also need to get an investment injection of US$ 6 billion for revamping the ports so that they
can accommodate large ships.

GOOD ENOUGH
Director of the National Maritime Institute (Namarin), Siswanto Rusdi, said that the discourse on the
merger of port operator BUMNs [state-owned enterprises] is good enough to improve the balance of
development among ports.

In addition, the consolidation will also provide common work patterns among the ports. For example, the
work style of Pelindo IIs President Director, R.J. Lino, all this time has been considered fast and full of
breakthrough initiatives, and this will impact on other Pelindo companies that are still slow.

However, he added, the merger should be made into two port operator companies, namely the port
operator for the western region and the port operator for the eastern region. In due course, each
operator establishes new subsidiary companies to take care of each port.

By doing so, the potential vulnerability to losing control from the parent company, due to the large
number of ports under the management, can be minimised. "If all are merged into a single holding
company it will not be effective because the CEO may also not be able [to handle] operational matters.
So, the better option is to divide the holding between the west and the east. "

The formation of two parent port operator companies will also make the respective operators increase
production and operational effectiveness at the ports because of business competition. "There has to be
competition," said Siswanto.

Head of Public Relations of Pelindo III, Edi Priyanto, said that the suggestion of Pelindo IIs President
Director should get a comprehensive scientific study, both in terms of business theory and
implementation on the field.

So far, he said, all the boards of directors of Pelindo I, II, III and IV also have been working together in the
concept of the Pendulum Nusantara [Pendulum of the Archipelago]. In the framework of this
cooperation, a subsidiary company has been established, i.e. PT Terminal Petikemas Indonesia (TPI).

Three Fundamental Measures to Reform National Logistics System
1. Infrastructure
Development of industrial area
Short sea shipping programme
Trans-Java Toll Road
Pushing for improvement of an addition to road networks throughout Indonesia
Logistics study result - national logistics cost
Development of logistics centres
Availability of facilities for air cargo
Accelerated development of Tanjung Priok area
Adoption of national logistics system in the regions
Development of aerocities/aerotropolis

2. Fiscal Policy
Resolution of tax issues for freight forwarding


14

Revitalisation of land transport modes that support logistics
Revitalisation of sea vessels
Change of export terms of trade into CIF
Adoption of national single window

3. Regulation
Planned revision of KM 10/1998 on Transport Arrangement Services
Encouraging improvements in the performance of Customs and Excise
Adoption of e-payment for customs clearance processes
Streamlining and expedition of export and import procedures
Eliminating the sectoral ego of stakeholders
Law on Logistics and Transportation

Source: Association of Indonesian Logistics and Forwarders (ALFI), processed
BISNIS/TUTUN PURNAMA

9. AIRPORT DEVELOPMENT: AP II Sets aside Rp 10 Trillion to Polish
Nine Locations


BANDUNG - PT Angkasa Pura II is preparing an initial stage investment worth Rp 10 trillion to rejuvenate
and develop nine airports starting next year.

President Director of PT Angkasa Pura II (Persero), Tri S. Sunoko, said that the development of these
airports is already in the companys plans for 2014 and 2015. It is recorded that there are a number of
airports to be developed, including Sultan Thaha Airport in Jambi, Raja Haji Fisabililliah Airport in Tanjung
Pinang, and Dipati Amir Airport in Pangkal Pinang.

In addition, there are Supadio Airport in Pontianak, Silangit Airport in North Sumatera, Kualanamu
Airport, as well as Husein Sastranegara Airport of Bandung. "Approximately there are nine airports that
will be further developed," he said after a groundbreaking event for the development of Husein
Sastranegara Airport terminal on Monday (29 September).

Kualanamu Airport, Medan, although it has just become operational, is also planned to be further
developed, especially for its runway and terminal[s].

Currently, the airport's capacity is still around 16 million passengers per year and it will be pushed up to
reach 25 million passengers per year by 2020 "At the moment, Kualanamu is still being designed," he
said.

Just for the development of these airports in 2014, he said, AP II must set aside Rp 8.7 trillion. Although
the funds will not be fully utilised, his company has already calculated the requirement for 2015 worth Rp
10 trillion that has to be prepared. "Indeed, we are still struggling, but the Minister [of BUMN] has asked
for the development to take place. We are now looking for the funds," he said.

AP II itself requires a total investment of Rp 32 trillion to develop airports in accordance with the


15

company's programme by 2030 According to Tri, the investment amounts or the airport development
vary [from airport to airport].

He pointed out that the development of Husein Sastranegara Airport costs Rp 139 billion. "The target is
to have it completed within 12 months, covering renovation and expansion of the passenger [terminal(s)]
from 5,000m
2
to 17,000m
2
," he said.

According to him, the development of Husein Sastranegara Airport is very urgent because the number of
passengers it has to accommodate will continue to rise to 3.4 million people per year.

Currently, the capacity of the terminal in Hussein could only serve 750,000 passengers per year.
"Meanwhile, the [passenger] movements in Hussein in 2013 already reached 2.46 million [passengers] or
300 percent of the capacity," he said.

HOLDING A TENDER
In addition to the expansion of Husein Airport, his company in the near future will prepare a tender for
the construction of Silangit Airport in Toba, North Sumatera. He admitted his company is still struggling to
resolve the issue of land acquisition in the airport adjacent that is close to the tourism location of Lake
Toba.

According to him, the land acquisition is being done very carefully because the location pertains to
community ownership. "If the land acquisition is already done, we will be ready to hold a tender," he
said.

According to him, the development of Silangit is targeted to start in 2015, soon after completion of the
land acquisition matters. AP II claimed it will have the flexibility to build once the acquired land officially
falls under the companys authority.

BUMN Minister, Dahlan Iskan, said that going forward the government will rely on state-owned
enterprises to build infrastructure, rather than looking for funding sources from the State Budget (APBN).

Dahlan has asked AP II to fund the development of those airports using its own funds, but this is already
beyond the capability limits of the company. "But all these should be built. Money can be sought later,"
he said.

Development of a number of airports under the coordination of both AP I and AP II, Dahlan said, must be
immediately addressed. He pointed to [the airport conditions in] Bandung, Banjarmasin, Semarang,
Yogyakarta and Bintan, which are still considered embarrassing in the international eye.

"Bandung will be resolved within this year. Banjarmasin, Semarang; they will also achieve groundbreaking
in two weeks," said Minister Dahlan.

Development of a number of airports [has been pursued] on average because their capacity is no longer
sufficient, such as terminals that could not accommodate the surge in the number of passengers and
there are long lines at check-in counters.

Silangit Airport is a priority of BUMN Ministry because currently tourist flows to the area are still not able
to access the air transport mode.

In addition, there is Kulonprogro Airport, which will replace Adi Sutjipto Airport, but the execution of the


16

project still cannot be done in 2014. "However, all the airports that have embarrassed us all will be
done," said Dahlan. (k57)

Seven Airports under AP II Still Make Losses
BANDUNG - Ministry of State-Owned Enterprises has asked Angkasa Pura II to offset its rejuvenation plan
for a number of airports by reducing losses in a number of places that they manage.

BUMN Minister, Dahlan Iskan, said that, of the 13 airports under AP II, there are seven that are still losing
money. He noted that losses occur in Sultan Thaha Airport in Jambi, Kualanamu Airport in Medan,
Pangkal Pinang, Raja Haji Fisabilillah in Tanjung Pinang, Sultan Mahmud Badarudin II in Palembang and
Minangkabau in Padang. "Padang and Jambi have made losses due to depreciation," he said on Monday
(29 September).

According to him, the losses at the two airports are not due to the factor of inadequate operations, but
they have occurred because of the very large costs of airport construction, loan interest and assets
depreciation.

Dahlan believes that the losses at the two airports can slowly be eliminated in line with the end of the
rupiahs exchange rate depreciation. "I do not remember the loss figures," he said.

Although the majority of the airports are still losing money, Dahlan still asked AP II to continue pushing
for the development of a number of airports, both old and new.

He admitted that AP II needs substantial funds to build airports, but the commitment to making airport
infrastructure in Indonesia credible has pushed him to ask AP II to keep moving. "I do not want to know;
money can be found," he said.

Minister Dahlan claimed that, in addition to encouraging AP II, he has also asked AP I to revamp a number
of airports in order to provide good services. (k1)

Several Airport Development Projects under Angkasa Pura II
Name of Airport Location
Sultan Thaha Jambi
Raja Haji Raja Fisabilillah Tanjung Pinang
Dipati Amir Pangkal Pinang
Supadio Pontianak
Silangit Siborong-borong
Kualanamu Medan
Husein Sastranegara Bandung

Existing and Post-Development Capacity of Husein Sastranegara Airport of Bandung
Item Existing Post-Development
Terminal Area (m
2
) 5,000 17,000
Capacity (Million Passengers) 0.8 3.4
Curbside (m
2
) 341 2,296
Check in area (m
2
) 371 1,533
Commercial Area (m
2
) 469 3,746
Baggage Claim Area (m
2
) 104 1,087
Arrival Hall Area (m
2
) 632 2,553


17

Departure Hall Area (m
2
) 746 3,109
Toilet (m
2
) 150 975
Source: PT Angkasa Pura II (Persero), processed
BISNIS/RADITYO EKO

10. LONG- AND MEDIUM- DISTANCE, ECONOMY-CLASS TRAINS:
Subsidy Withdrawn, Prices Jump

Bisnis Indonesia, 1 October, 2014, Page 24, Section: Transportasi & Infrastruktur
By Fitri Rachmawati & M.G. Noviarizal Fernandez

JAKARTA - PT Kereta Api Indonesia will charge tariffs without subsidy and partial tariffs on long-distance
and medium-distance economy-class trains effective from 1 January 2015. The average new tariffs for
non public service obligation (PSO) trains will be Rp 90,000 - Rp 150,000.

Vice President Head of Corporate Communication of PT Kereta Api Indonesia (Persero), Makmur
Syaheran, that the imposition of commercial tariffs, or tariffs without subsidy, for the economy-class
trains has resulted from the governments policy to divert public service obligation (PSO) [funds] for
economy-class trains to local trains within the Jabodetabek [Jakarta, Bogor, Depok, Tangerang Bekasi]
area and commuter trains.

"Actually. The [new] tariffs were once applied in the first quarter of 2014," he said, Tuesday (30
September).

The setting of the new tariffs without subsidy, he said, will not discourage people who use long-distance
and medium-distance, economy-class trains because the service standards for these trains will be better.

Meanwhile, the tariffs to be made effective by PT KAI itself vary, or depending on the distance and
occupancy, as well as the public interest. For example, the Progo I Train with the relation [i.e. route]/
destination of Lempuyangan - Pasar Senen [presently] has a subsidized fare of Rp 50,000, but once the
subsidy is removed, he ticket price will be Rp 105,000 per person.

However, if the relations of the long-distance and medium-distance, economy-class trains are less desired
by the people, the government will still give PSO or subsidy.

According to Makmur, the provision of PSO will be more effective when distributed to users of local trains
as well as commuter trains, since most users of the Commuter Trains are workers or commuters with the
highest number of trip frequency.

"PSO will be prioritised for local and commuter trains because of the higher trip frequency of the people
who use the local trains and commuter trains than the economy-class trains," he said.

Commercial Director of PT KAI, Bambang Eko Martono, said that the governments policy to divert PSO to
the local economy-class trains and commuter trains is meant to make the subsidy better targeted to
users of railway services.

The policy has also been based on the results of evaluation by Directorate General of Railways of the
Ministry of Transportation, who has been continuing to evaluate the provision of subsidy for the long-


18

distance and medium-distance economy-class trains.

"The number of long-distance and medium-distance economy-class train passengers has continued to
increase, but even a more pronounced increase has been recorded on the commuter trains," he said.

SINCE 2 OCTOBER
For information, PT KAI since 2 October 2014 has imposed new tariffs without subsidy for long-distance
and medium-distance economy-class train trips from 1 January 2015.

With the diversion of the subsidy, said Bambang, it is certain that the rupiah amount payable by the
passengers when booking a ticket will be larger than the PSO-supported train fares. Meanwhile, the
increase in tariffs varies because it depends on the route of each train.

"The magnitude [of tariff] varies. For example the Kertajaya Train (KA) with Surabaya - Tanjung Priok
route, which originally has a fare of Rp 55,000 payable by the passenger will charge Rp 95,000 - Rp
150,000 to the passenger after the diversion of PSO," he said.

Currently, the number of long-distance and medium-distance train passengers based on the 2013 data
reaches about 500,000 people and it is believed it will continue to increase until the end of the year.
Meanwhile, there are currently 655,000 passengers of commuter and local trains each day.

By looking at the number, he said, the diversion of PSO funds from the long-distance and medium-
distance trains to the local and commuter trains manifests the right step because the diversion is made
for passengers who have a greater need.

Previously, Head of Legal and Public Relations Division of Directorate General of Railways of the Ministry
of Transportation, Joyce Hutajulu, said that the transfer of subsidy could lead to an increase in the
frequency of local and commuter trains or decrease in the tariffs of those trains.

According to him, there are about Rp 800 billion of PSO funds for long-distance and medium-distance
trains that will be diverted to the commuter and local trains. It has been noted there are 22 long-distance
train units and 24 medium-distance train units that will experience a change of tariff payable by the
passenger.

Adjusted Tariffs of 20 Long-Distance and Medium-Distance Trains
in Java and Sumatera per 1 January 2015
(Rp per passenger)

1. Logawa Train: from Rp 50,000 to Rp 115,000
2. Kertajaya Train: from Rp 50,000 to Rp 135,000
3. Brantas Train: from Rp 55,000 to Rp 135,000
4. Kahuripan Train: from Rp 50,000 to Rp 125,000
5. Kutojaya Utara Train: from Rp 40,000 to Rp 90,000
6. Bengawan Train: from Rp 50,000 to Rp 110,000
7. Progo Train: from Rp 50,000 to Rp 100,000
8. Pasundan Train: from Rp 55,000 to Rp 130,000
9. Sritanjung Train: from Rp 50,000 to Rp 110,000
10. GBMS Train: from Rp 55,000 to Rp 140,000
11. Matarmaja Train: from Rp 65,000 to Rp 150,000
12. Tawangjaya Train: from Rp 45,000 to Rp 95,000


19

13. Serayu Train: from Rp 35,000 to Rp 95,000
14. Kutojaya Selatan Train: from Rp 35,000 to Rp 70,000
15. Tegal Arum Train: from Rp 25,000 to Rp 55,000
16. Tawang Alun Train: from Rp 30,000 to Rp 65,000
17. Rajabasa Train: from Rp 30,000 to Rp 65,000
18. Buser/Serelo Train: from Rp 30,000 to Rp 55,000
19. Putri Deli Train: from Rp 20,000 to Rp 45,000
20. Siantar Ekspres Train: from Rp 20,000 to Rp 40,000

Source: Kemenhub, processed
Bisnis/Husin Parapat

11. TRANS-SUMATERA TOLL ROAD: Government Begins Construction of
First Two Segments

By Fitri Sartina Dewi
fitri.sartina@bisnis.co.id

JAKARTA - The government will begin the construction of two out of the four priority trans-Sumatera toll
road segments on 8 October 2014, namely Medan - Binjai and Palembang - Indralaya.

Director General of Highways (Bina Marga) of the Ministry of Public Works (PU), Djoko Murjanto, said
that the work process of the two toll road segments will experience a little change, i.e. the work will not
started with the Medan - Binjai segment, but it will begin with the Palembang - Indralaya segment.

"There has been a change, where we initially predicted the Medan - Binjai segment to start first in getting
constructed, but because of land acquisition constraints, then the work will begin with the Palembang -
Indralaya segment," he said on Tuesday (30 September).

According to him, the Palembang - Indralaya segment will be done first because its land acquisition
process has registered a significant progress and it has been targeted that the land acquisition process
can be completed by the end of this year.

He explained that President Susilo Bambang Yudhoyono (SBY) has indeed issued a Presidential Regulation
(Perpres) that assigns PT Hutama Karya (Persero) to carry out the construction of the four toll road
segments in the Trans-Sumatera line.

However, he said, before carrying out the construction process, Hutama Karya (HK) must meet a number
of requirements, such as submitting a business plan. Then it has to form a toll road business entity (BUJT)
and signed a toll road concession agreement (PPJT) with the Toll Road Regulatory Agency (BPJT).

"It seems that HK will already be able to conduct groundbreaking [first pole erection] in December 2014,
provided that its PPJT has been signed," he said.

For the business planning process, the government has given a month to HK to prepare and submit it to
the Ministry of Public Works. Corporate Secretary of PT Hutama Karya, Ari Widiyantoro, claimed that his
company will be able to finish the process of preparing a business plan in a timely manner, which is by


20

October 2014.

LAND ACQUISITION
Head of Sub Directorate for Land Acquisition of Directorate General of Highways of the Ministry of Public
Works, Achmad Herry Marzuki, said that to acquire land in the Palembang - Indralaya segment, his office
has adopted the new rules contained in Law No. 2/2012 on Land Procurement for Public Purposes.

"We have used the new rules for the Palembang - Indralaya segment, and so far the process has been
going well, and the progress has even been significant. It is targeted that by the end of this year the
acquired land can reach 100 percent," he said.

According to him, the land that has been acquired for the Palembang - Indralaya segment has just
reached seven km of the total length of 22km. However, he said that until now the process of
compensation payment to affected people has proceeded pretty smoothly.

"We need additional funds to pay compensation to the community and accelerate the process of land
acquisition," he said.

Meanwhile, for the Medan - Binjai segment along 16km, Herry said that the land acquisition process is
still at zero percent. That is because most of the land to be used for the construction of Medan - Binjai
segment belongs to PTPN II.

If the letter of assets release from the BUMN Minister, Dahlan Iskan, has been issued, he said, the
progress of land acquisition will increase to 70 percent.

Herry said that his office has pushed for an expedited release of the land assets belonging to PTPN II from
Ministry of BUMN to Directorate General of Highways through a permission letter sent on 23 December
2013 and with a copy sent to BUMN Minister, Dahlan Iskan.

"We sent the letter a year ago, but until now there has been no reply from the Minister of BUMN. We
hope the letter will be responded to as soon as possible, so that progress can be increased," he said.

Djoko Murjanto admitted that the land acquisition process in the Medan - Binjai segment is very difficult
indeed and it takes a long time. That is because some of the land owned by PTPN II has been illegally
occupied by people.

Thus, a permission letter from the Ministry of BUMNs is needed to be able to quickly relocate people who
occupy the land illegally.

Shares of Hutama Karya Absorbed by Three Construction Sector BUMNs
JAKARTA - The shares of PT Hutama work will be taken by three construction sector BUMNs who act as
investors in the construction project of the Medan - Kuala Namu - Tebing Tinggi toll road segment.

Ari Widiantoro, Corporate Secretary of PT Hutama Karya (Persero), said that the company will sell a 15
percent stake in the consortium for the construction of the toll road project in North Sumatera.

"[The plan] will be discussed with the BUMN consortium. Later, in line with the investment auction rules,
the three BUMNs can absorb Hutama Karyas shares," he told Bisnis Monday (29 September).

Hutama Karya holds 15 percent shares of the BUMN consortium that works on the Medan - Kuala Namu -


21

Tebing Tinggi toll road project. The three other BUMNs are PT Jasa Marga (Persero) Tbk. with 55 percent,
PT Waskita Karya (Persero) Tbk. with 15 percent and PT Pembangunan Perumahan (Persero) Tbk. with 15
percent.

He said that the shares owned by Hutama Karya will be released in whole or in part, in accordance with
the wishes of the other shareholders. Each construction sector BUMN can absorb 15 percent of the
shares in accordance with the agreement.

According to him, the process presently undertaken is still at the stage of exploration. The company
would like to release the shares in the near future.

Hutama Karya has prepared an investment with a 15 percent portion of the Rp 6 trillion. Until now, the
company has spent about Rp 180 billion for the project. (Sukirno)

Brief Profile of the Trans-Sumatera Toll Road Project
Length : 2,600km
Number of Segments : 23 segments
Priority Segments : 4 segments
Assignment to : PT Hutama Karya
Construction Target : December 2014

Several Priority Segments of Trans-Sumatera Toll Road
1. Medan - Kualanamu - Tebing Tinggi
Total Length : 61.7km
Governments Portion : 17.8km
BUJTs Portion : 43.9km
Investment : Rp 4 trillion - Rp 6.2 trillion
Construction : Rp 540 billion

2. Medan - Binjai
Length : 15.8km
Land Investment : Rp 256 billion
Construction Investment: Rp 1.3 trillion

3. Palembang - Simpang Indralaya
Length : 22km
Land Investment : Rp 200 billion
Construction Investment: Rp 1 trillion

Sources: Various, processed

12. PORTS: Lino: Cilamaya Project Should be Stopped

By Muhammad Hilman


22

JAKARTA - The government's plan to develop the Port of Cilamaya has been assessed by the port service
state-owned enterprise (BUMN) PT Pelindo II, instead, as something that does not need to be pursued
further, following the construction completion of the Port of New Priok in Kalibaru, North Jakarta.

President Director of PT Pelabuhan Indonesia (Pelindo) II, Richard Joost Lino, said that the origins to the
planned development of Cilamaya is to help (back up) the Port of Tanjung Priok, which was planned to be
developed only by the extent of one km area, with a capacity of 1.5 million TEUs.

However, along with the development of New Priok, the total container capacity, when combined with
that of the Port of Tanjung Priok, could reach 20 million TEUs.

Thus, he said, the plan for the development of Cilamaya is no longer needed. At the initial stage, he
added, Container Terminal (CT) I of New Priok I will also be completed and become operational by mid-
2015 "If Priok [has a capacity of] 20 million TEUs, may be only in 2040 that [logistics] needs Cilamaya," he
said, Wednesday (1 October).

However, Chairperson of the Indonesian National Shipowners' Association (INSA), Carmelita Hartoto, had
a differing view. She said that the construction of Cilamaya Port needs to be continued to support
industry that has begun to grow in West Java.

Later, Cilamaya also will make the owners of goods to have many port options when they distribute their
goods. "It should not happen that we [Indonesia] is deemed inconsistent by investors from abroad."

Carmelita, who is also Vice Chairperson of the Indonesian Chamber of Commerce and Industry (Kadin
Indonesia) for Logistics and Shipping, urged that the Port of Cilamaya be built soon.

This is because Tanjung Priok no longer supports the national logistics system efficiently. Although New
Priok has been completed, he said, the position of the Tanjung Priok Port, which is located in the city
centre, contributes greatly to congestion, so as to trigger the high cost of logistics.

All this time, approximately 60 percent - 70 percent of the national logistics flows has been handled via
Tanjung Priok. Meanwhile, the potential of logistics business reaches Rp 1,400 trillion per year. Thus, the
logistics business, which revolves with its main gate being Tanjung Priok, amounts to more than Rp 500
trillion.

According to her, the Tanjung Priok port operator also should not be afraid to compete with the presence
of Cilamaya, which is located in the hinterland, as the interests of society should take precedence.

"The solution is that the burden of Priok should be shared by preparing a substitute port, or a larger port
of comparable class to Tanjung Priok," she said.

SHIFT OF CHANNEL
Meanwhile, with regard to the polemic on the development of Cilamaya, which is assessed to disrupt the
gas pipeline owned by PT Pertamina, Ministry of Transportation (Kemenhub) has proposed a shift of the
shipping channel of Cilamaya by 3,000m to the west, with a dock clearance distance of 5,000m.

Kemenhubs suggestion is a follow-up of the study by independent consultants Mott McDonald and DNV-
GL and Booz & Co., as Supervisor Consultant, in June 2014.


23

In addition, along the port channel in Cilamaya, signals will be placed to mark the shipping line, as well as
determine the location of the prohibition to throw the anchor at some points where a gas pipeline is
located.

Data from Kemenhub show that the construction of Cilamaya is estimated to require a total cost of Rp
34.5 trillion, which is divided into two stages.

In the first phase, the total cost required is Rp 23.9 trillion. At this stage, the development of
infrastructure consists of a container terminal with a capacity of 3.75 million TEUs and a car terminal with
a capacity of 1.03 million CBU units.

CT I Targeted to Become Operational in Mid-2015
JAKARTA - PT Pelindo II or Indonesia Port Corporation said that the company is accelerating works on
Kalibaru Port (or New Priok Port) development project through the operation of Container Terminal I.

Chief Financial Officer (CFO) of PT Pelindo II/ IPC, Orias P. Moedak, claimed that the first phase of Kalibaru
Port development project, which has been conducted since 2012, has achieved significant progress.

He said that the first phase construction includes Container Terminal I (CT I) along 800m. According to
him, the CT I construction progress until now has entered the stage of overlay or plating.

"The CT I works are targeted to reach 50 percent completion by December 2014," he said, Wednesday (1
October).

He said that his company targets CT I works can be fully completed and it will become operational by
mid-2015. After completion of CT I works, he said, IPC will again carry out the process of contractor
tender for the execution of CT II works.

When CT I has been fully built and put into operation, he said, the terminal is predicted to increase the
accommodation capacity by up to 1.5 million TEUs.

however, if the New Priok Terminal has become fully operational, the accommodation capacity could
reach 15 million TEUs.

He said that the construction of the New Priok Terminal has received support from the new government
of Joko Widodo - Jusuf Kalla. (Fitri Sartina Dewi)

Development of Cilamaya Port
Phase I Investment: Rp 23.9 trillion
Stages of Development: Container Terminal of 3.75 million TEUs, car terminal of 103 million units, oil
dock, ro-ro terminal, shipping channel with a depth of -17 M Lws.
Phase I Scope of Work
Breakwater, outer seawall/revetment, dredging, reclamation, oil jetty, access roads and bridges, pier,
container yard, procurement of loading and unloading equipment, other supporting facilities.

Phase II Investment: Rp 10.6 trillion
Phase II Scope of Work: Continuation of container terminal construction from Phase I, namely
construction of access roads and bridges, reclamation, procurement of loading and unloading equipment,
other supporting facilities.


24

Technical Data of New Priok Port
Company: PT Pelindo II or IPC
Total Budget: Rp 24 Trillion
Construction: 2012
Operational Target: 2018
Capacity: 15 million TEUs

Sources: Various, processed

13. PORT SECTOR HOLDING COMPANY: Dahlan: Pelindo Merged in
2015

By Sukirno
sukirno@bisnis.co.id

SURABAYA - State-Owned Enterprises (BUMN) Minister, Dahlan Iskan, has affirmed that PT Pelabuhan
Indonesia I, II, III, and IV as well as related BUMNs should be merged into a single holding company next
year in order to accelerate the implementation of the sea tollways.

"If indeed [the concept of] sea tollways must be realised, PT Pelabuhan Indonesia [I, II, III, IV] should
become a holding [parent company]," he said, Thursday (2 October).

Plt. (ad interim) Minister of Transportation, Bambang Susantono, made a positive gesture to the planned
establishment of a holding company for the state-owned port sector firms. He said that the port sector
BUMN holding can make the performance of each company increasingly positive.

One of the governments plans that can be realised soon with the formation of this holding company is
the inaport net program. He expressed optimism that the realization of the inaport net programme can
be faster than the set target.

"From the side of the regulator, we ensure the rules of the game for services and the community. So, it is
more in that direction," he said.

President Director of PT Pelabuhan Indonesia III (Persero), Djarwo Surjanto, claimed his company would
follow the wishes of the government as a shareholder of the company, with regard to the planned
merger of port-sector BUMNs.

He assessed that the plan to have a port sector BUMN holding company could be positive and negative
for each of the merged companies. "If there are a lot of positive effects, well, just do it; but if the
negatives are many, it should not be done."

Pelindo III expressed its readiness to welcome the planned programme of the new government, who
wants to implement the concept of the marine tollways, or domestic transhipment on the national
network.

The concept of marine tollways is essentially a wish of the government to accelerate connectivity within
the framework of implementing the national logistics system through sea transport from the western end


25

to the eastern tip of Indonesia. This concept requires improvements and efficiency so that the ports will
be able to accommodate large capacity ships.

His company has made a more in-depth assessment of a number of ports managed by Pelindo III. On
average, the ports managed by Pelindo III has a [pool] depth from -14m LWS to -16m LWS and they can
accommodate large-capacity vessels. "Tanjung Perak Surabaya is ready to serve the sea tollways. We
have prepared all the ports in line with the activity level of each port; we are preparing," he said.

SHIPYARD BUMNs
Dahlan Iskan said that, besides PT Pelindo I - IV, the government is also making a design to merge a
number of state-owned companies in the shipyard sector, i.e. PT PAL (Persero) and PT Dok and
Perkapalan (Persero) into the state-owned port-sector holding company.

Although the House of Representatives (DPR) has prohibited the government from merging the BUMNs
into a holding company, Dahlan has remained unmoved. He is optimistic that the new legislators can
negotiate to pass the plan for the holding company.

"[This is done] because the goal is to make progress. We will discuss it without being emotional, but it will
be done rationally. If it is for the good of the companies, what would be done should not be done so
emotionally," he said.

Until now, the government has established five BUMN holding companies, i.e. PT Semen Indonesia
(Persero) Tbk., PT Pupuk Indonesia (Persero), a reinsurance BUMN holding company, a BUMN holding
company in the plantation sector and in the forestry sector.

The formation of holding BUMNs is part of the programme for downsizing (right sizing) the number of
BUMNs, which is made to improve efficiency and create large-sized state-owned companies in each
sector.

The government aims to create around 14 - 16 BUMN holding companies and will reduce the number of
BUMNs from 138 companies currently.

Currently, the total assets of BUMNs in the logistics and trade sector in 2012 amounted to Rp 33.12
trillion. Meanwhile, the total assets in 2013 was estimated at Rp 35.8 trillion. In the company work plan
budget (RKAP) this year, the total value of assets is targeted to reach Rp 37.62 trillion.

Several Strategic Policies
Organisation of Maritime Transportation
1. Deregulation and de-bureaucratisation of national shipping arrangements
2. Development of national maritime transport network
3. Reposition of the role of port sector BUMNs
4. Financing and budget management governance
Source: Indonesian Transportation Society, processed

Several Ways to Build Efficient, Integrated and Connected Logistics System
1. Modernise Infrastruktur by involving the private sector on a massive scale
2. Efficient, inter-island connectivity
3. Improvement of human resources
4. Increase in the use of information technology for efficiency purposes
5. Switch from basic commodity export products to high-value commodities


26

6. Becoming a gateway for international shipping

Source: Maersk Line, processed

14. Waste Management Facilities Inadequate

Media Indonesia, 3 October, 2014, Page 14, Section: Humaniora
By Vera Erwaty Ismainy

There has only been one integrated waste management centre in Indonesia. In fact, economic activities
have led to an ever rising production of waste.

Environment Minister, Balthasar Kambuaya, said that the use of chemicals has continued to rise in line
with the scores of industrial activities that support economic growth. This can be seen from the increase
in the number of permits for the management of hazardous and toxic waste (B3) issued by the Ministry
of Environment (KLH).

"The permits issued by the Ministry of Environment increased by up to 44.6 percent. From 112 in 2012 to
258 licenses in 2013," he said in a workshop themed Challenges in Waste Management Towards
Sustainable Development held by PT Prasadha Pamunah Limbah Industri (PPLI), in Cileungsi, Bogor, West
Java, yesterday.

The increased use of chemicals that produce B3 waste, according to Balthasar, cannot be separated from
economic growth, population, and the Master Plan for the Acceleration and Expansion of Indonesian
Economic Development (MP3EI) scenario.

What has been a problem: the inadequate number of waste management centres creates the potential of
pollution and environmental damage. In the future, Indonesia will need more waste and B3 waste
management centres in many regions.

"The rising use of chemicals and [production of] B3 waste has implications for pollution and
environmental damage if it is not properly managed. The government encourages the establishment of
waste management centres throughout economic growth centres." Balthasar also explained that the
development of the Draft Government Regulation (RPP) on B3 waste has now reached the final stage.

"The RPP is prioritised to be passed before the end of the United Indonesia Cabinet II administration. I
have put my initial on the RPP; only the initials of some other ministers are needed, namely Minister of
Energy and Mineral Resources (ESDM), Minister of Trade, Minister of Industry, and Minister of Home
Affairs," Balthasar said.

Some of the matters covered by the RPP pertain to the degree of danger of the B3 waste and utilisation
of the B3 waste.

Specific requirements
At the same occasion, Secretary of the Ministry of Environment, Rasio Ridho Sani, said that today PPLI has
been the only integrated waste management centre in Indonesia. The lack of facilities like PPLI has led to
sub-optimal management of waste.


27

PPLI provides facilities for recycling, collection, handling, as well as safe disposal of toxic waste and B3
waste. "To obtain a waste management license, there are strict requirements and mechanisms to follow,"
said Rasio.

The requirements that must be met include, among others, the companys having an environmental
permit, having a landfill or B3 waste recovery field, as well as certified technology and human resources.

PPLI President Director, Koji Kuroki, said that if B3 waste is processed correctly, the contaminated land
will become green again and the groundwater can be utilised as well. vera@mediaindonesia.com

Management of B3 Waste in Indonesia
Permits for Management of B3 Waste
- 2012 112 management permits
- 2013 258 management permits

Causes of the Rising Use of Chemicals
- Economic growth
- Number of population
- Scenario of Master Plan for Acceleration and Expansion of Indonesian Economic Development
(MP3EI)

Management Hurdles
- Lack of awareness for waste management
- Lack of information on waste water processing plant (IPAL) technology
- Inadequate capacity of human resources (SDM) who master waste processing technology
- Inadequate availability and spread of waste management centres, facilities and infrastructure

Requirements to Get Waste Management Permit
- Company must have an environmental permit
- Having landfill or land for B3 waste recovery
- Having certified technology and certified/professional human resources

Source: Ministry of Environment/MI Team

15. INFRASTRUCTURE: World Bank Readies Rp 6 Trillion to Assist Local
Governments

KOMPAS, 2 October, 2014, Page 17, Section: Ekonomi

JAKARTA, KOMPAS - The World Bank has allocated an additional US$ 500 million, or equivalent to Rp 6
trillion, to improve the accountability of infrastructure projects in the regions. The programme targets
improvements of the financial statements, technical matters, and enhanced monitoring of public services
sourced from the special allocation fund (DAK) and contributions from local governments.

World Bank Country Director for Indonesia, Rodrigo A Chaves, mentioned this in a press release received
in Jakarta on Wednesday (1 October). The funds are channelled to provinces other than Aceh, Jakarta,
Papua, and West Papua.


28

"Accountability of local governments have a direct impact on the quality of public services received by
the public. This project aims at improving the efficiency and effectiveness of the use of budgets in the
regions," said Rodrigo.

Public service responsibilities have devolved from the national government to the sub-national
governments in the last 10 years. There are regions that have become developed, but there are also
those where the quality of public services has declined, instead.

The World Banks Senior Specialist of Urban Affairs, Taimur Samad, added that the increased capacities of
government officials in financial management, procurement management, and investment planning and
maintenance are targeted. This project is measured from the transparency and accountability
[prescribed] by the Development and Finance Supervisory Board.

Separately, Executive Director of Regional Autonomy Implementation Monitoring Committee, Robert
Endi Jaweng, said that capacity building in the governance of infrastructure budget is essential for the
accountability of funds management. Inefficiency and corruption have been a major challenge in
infrastructure investment because rent seeking has shifted from the auction process to the stages of
project implementation and supervision.

Executive Director of the Institute for Development of Economics and Finance (Indef), Enny Sri Hartati,
said that programmes that encourage budget accountability are good. "It should not happen that these
funds will instead become an opportunity to enlarge Indonesian foreign debt," she said. (HAM)

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