Bimantara holds up over $1b projects

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)