Bimantara holds up over $1b projects

JAKARTA (JP): The Bimantara Group says it will either postpone or scale down projects worth in excess of US$1 billion even though they are not affected by the government's retrenchment program.

Peter F. Gontha, a commissioner of the business group, said Friday that large-scale projects which had been postponed included refinery projects in Cilacap, Central Java, and Situbondo, East Java.

"All small projects will go ahead," Gontha told journalists after the signing of a business deal with Britain's BP Chemicals.

The group hopes to resume the projects after the monetary situation returns to normal in one to two years, he said.

Bimantara had planned to develop the project through its subsidiary PT Asia Pacific Petroleum Ltd.

At least 36 companies have applied for licenses to build and operate oil refineries, according to government data.

The Nusamba Group, which is controlled by timber tycoon Mohammad "Bob" Hasan, said that it would also enter the downstream oil industry to benefit from the easing of the government's oil industry policy.

Under the new policy, private refinery companies are allowed to sell their petroleum products in the local market through state-owned oil company Pertamina. They were previously only allowed to produce finished oil products for export.

The government said last week it would either postpone or review projects worth over Rp 111.18 trillion ($38 billion) as part of its measures to handle the sharp drop in the rupiah against the U.S. dollar.

The 75 postponed projects include the gas-fired Pasuruan power plant in East Java, partly owned by Bimantara subsidiary Pasuruan Power Company.

Gontha said Bimantara accepted the government's retrenchment policy even though it would have to pay additional costs due to the postponement of its projects.

"We need to tighten our belts but there is no need to get very distressed," he said. "Because even foreign analysts say the situation in Indonesia is better than in other neighboring countries." (jsk)