12 forest concessions to be auctioned: Official

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)