Government calls off peat land project

JAKARTA (JP): President B.J. Habibie decided on Tuesday to stop the one-million-hectare peat land conversion scheme in Central Kalimantan, and ordered several Cabinet ministers to help the 61,000 transmigrants involved in the disappointing project, an official said on Tuesday.

Secretary of Development Operations Lt. Gen. (ret) Sintong Panjaitan said the government would halt the Rp 2 trillion so far allocated for the project because it had not achieved what it was intended and was harming the environment.

"The project was improperly designed," Sintong said in a joint press conference with Central Kalimantan Governor Warsita at the Bina Graha presidential office.

The President summoned several ministers on Tuesday to discuss the fate of the ambitious project.

He ordered Coordinating Minister for Economy, Finance and Industry Ginandjar Kartasasmita, who was also involved in designing the project, to head the government team to settle the problem.

A government investigation found last year that the peat land project had destroyed 1.4 million hectares of forest, caused forest fires and polluted rivers in the locality, and threatened the habitat of orangutans and proboscis monkeys.

The government has spent Rp 2 trillion developing the project, which was launched in early 1997 by then president Soeharto. Initial estimates said the mega project would cost Rp 5 trillion (US$2.1 billion) to set up. PT Sumatera Timur Indonesia, a subsidiary of the Sambu Group, was appointed by the government to develop the area.

The project involves converting one million hectares of peat swamp land in Central Kalimantan into 638,000 hectares of rice fields. The remaining 362,000 hectares were to be used for horticulture, plantations, conservation areas, housing and reservoirs.

"Because the target of the project is to make a rice production center, the project will be handled by concerned ministries," said Sintong.

The Indonesian Forum for the Environment (Walhi) estimates that indigenous people in the villages, known as the Dayak Ngaju, lost 57 percent of their land to the project and forest fires in 1997.

Walhi's 1998 study discovered that the project degraded the environment, which had already bee damaged by the practice of illegal logging, and lowered local people's incomes.

The study also found that the project, which included ancestral Dayak land, also led to the disintegration of communities.

Sintong acknowledged on Tuesday that transmigrants were living in very poor conditions, mainly because the rice harvest was destroyed by rodents.

He said the President had agreed to provide Rp 57 billion to provide food for the farmers until the next harvest season and to repair their houses.

"However, Rp 30 billion of the fund will be used to remove the rodents," said Warsito.

The governor said the government would not relocate the transmigrants as 60 percent of them were native Kalimantan people.

He said the government would convert the paddy fields into horticulture and hard crop plantations. (prb)