Mon, 29 Mar 1999

12 forest concessions to be auctioned: Official

JAKARTA (JP): The government will auction 12 logging licenses covering some one million hectares of forest concessions in East Kalimantan, an official said on Saturday.

The head of East Kalimantan's forestry and plantations office, Kayat R. Soekaryo, said the logging licenses would expire at the end of this year. The government decided not to extend them to the current holders but auction them to the public.

The concession forests up for auction include those controlled by big names in the forestry industry, including timber tycoon Mohamad "Bob" Hasan, through PT Alas Helau, the Kayu Lapis Indonesia Group, through PT Gama Mula Raya, and the Alas Kusuma Group, through PT Belayan River Timber and PT Sahid Timber II.

Alas Helau currently holds 330,000 hectares of concessions in the province, Gama Mula Raya has 197,000 hectares, while Belayan River and Sahid Timber each have 30,000 hectares.

Other concessions to be auctioned include: 95,000 hectares of forest currently controlled by PT Basuimex, 57,000 hectares controlled by PT Meranti Sakti, 55,000 hectares under PT Jatrin, 53,000 under PT Tunggal Yudi Timber, 39,000 hectares under PT Benegen Timber, 30,000 hectares controlled by PT Gunung Jati Rimba and 60 hectares by PT Marimun Timber, PT Gunung Jati and PT Lestari Greenland Utama.

The new holders of the forest rights would be able to conduct logging activities in those forest concessions in the calendar year 2000, Kayat was quoted by Antara as saying in Samarinda, East Kalimantan.

He said the government, through a tender committee, had established strict requirements for prospective bidders.

The bidders, he said, were required to have enough capital and appropriate equipment, resources and techniques to manage the forests. The companies must also be based somewhere in the province.

"Prospective bidders will be obliged to provide a performance bond or bank guarantee in an amount commensurate with the potential yield of each area," Kayat said. "The bank guarantee is necessary to prevent possible trading of concession rights."

Director General of the Utilization of Production Forests Waskito Soerjodibroto, who chairs the tender committee, said earlier this year that three million hectares of forest nationwide would be offered to the public through auction.

The auctions would be open to everyone, including cooperatives, private and state timber companies, who met the requirements, he said.

Indonesia earlier planned to introduce the auction system for forest concessions by the end of July, to comply with the reform agenda agreed with the International Monetary Fund. But the plan was rescheduled to the first quarter of this year.

The auction would mark a change in the government's policy of granting forest concession rights to investors. The existing concession holders were all appointed by the government to carry out logging operations.

The government first began to award forest concessions to private companies in 1971 under the Forestry Law, which grants the concession holder the sole right to cultivate and exploit the forest in that concession area.

The move has led to a concentration of the country's forest assets in the hands of a small number of business groups, mostly those controlled by kin and cronies of former president Soeharto. (gis)