Dayak Besar takeover still in question

Dayak Besar takeover still in question

JAKARTA (JP): Minister of Forestry Djamaludin Suryohadikusumo
has asserted that the question of who will take over the debt-
burdened PT Dayak Besar Group (DBG) is not important as long as
its forests are used to benefit the local people.

"The central issue is that forests are state assets. Forests
should not be abandoned because they belong to the state. We will
use every government regulation to take them into our care,"
Djamaludin said.

DBG, which controls around 200,000 hectares of forest
concessions and a number of timber mills in East Kalimantan, was
found earlier this year to have defaulted on loans worth an
estimated Rp 350 billion (US$166 million).

Around Rp 200 billion of the debts were owed to the state-
owned Bank Rakyat Indonesia and another Rp 150 billion to various
private banks.

Businessman Probosutedjo, the chairman of the automotive
Garmak group and a half-brother of President Soeharto, later
stepped in, saying he was willing to take over the group, which
was previously controlled by businessmen Yusuf Hamka.

Until April, the takeover was not yet final and Probosutedjo
conceded that his company still needed several more months to
determine how to repay DBG's large debt burden. He insisted that
he would not retreat from the takeover.

Reliable sources in the forestry business, however, said that
Probosutedjo, who is also chairman of the widely-diversified
Mercu Buana Group, has backed away from the plan.

Djamaludin said yesterday he had yet to receive reports from a
special team -- comprised of officials from the Ministry of
Forestry and Bank Rakyat Indonesia -- which would decide the best
way to save the state's assets.

He acknowledged that if it was considered necessary and no
private investors were interested, DBG's concessionaires could
be managed by state forestry firms.

He explained that DBG's concessionaires were inadequate to
sustain the company's 11 lines of wood-based industries.

Yamdena

Djamaludin also met yesterday with the local people of Yamdena
Island in Tanimbar, Southeast Maluku, who previously rejected
logging operations in their area.

The 11 delegates, consisting of wood carvers, farmers, senior
citizens of the local villages and government officials,
acknowledged that they have decided to abide by government
regulations and fully support the logging operations and wood-
based industries managed by a joint venture between state-owned
PT Inhutani I and PT Mohtra Agung Persada.

Previously, the local people -- led by the Association of
Tanimbar Intellectuals -- opposed the concessionaires, saying
that the logging would destroy Yamdena's forests and their unique
flora and fauna.

Yamdena

Djamaludin, however, persisted in his decision to permit
Inhutani and Mohtra Agung to operate in the region, saying that
logging would not endanger the island as long as it was done
under the principles of sustainable forest management.

Inhutani, the delegates said yesterday, conducted sound social
approaches before starting operations in Yamdena. These included
the holding of a sacred ceremony which allowed the Tanimbar
tribe's traditional leaders to approve the logging operations.

The local people said they were also grateful for Inhutani's
efforts to market their wood carvings, supervise settled farming
and provide clean water.(pwn)