Indonesian, Australian firms sign US$5.5 billion contract

JAKARTA (JP): Two Indonesian-Australian joint venture companies, PT Indonesia Bulk Terminal and PT Adaro Indonesia, have signed a US$5.5 billion contract with Indonesia's PT Batu Hitam Perkasa to supply and handle coal for PT Paiton Energy Company's coal-fired plant in East Java.

The agreement was signed here yesterday by representatives of the three companies in an Asian Pacific Economic Cooperation (APEC) brunch gathering. The gathering, organized by the Indonesia-Australia Business Council, was attended by Indonesian Coordinating Minister for Industry and Trade Hartarto and Australian Minister of Trade Robert McMullan.

Under the agreement, PT Batu Hitam Perkasa (BHP) will sell and deliver to PT Paiton Energy Company (PEC) an average of 4.3 million tons of coal per annum during the 30 year term of the agreement, valued at an estimated $5.5 billion.

Kusumo A.M., a director of PT Indonesia Bulk Terminal (IBT), told The Jakarta Post after the signing ceremony that the coal will be supplied by PT Adaro's mine in South Kalimantan and will be handled, stored, and shipped by PT Indonesia Bulk through its large scale deep water bulk-handling port at Pulau Laut, off south eastern Kalimantan.

PT Adaro Indonesia is equally owned by Australia's New Hope Corporation Limited and by Indonesia's firms--Tirtamas and Swabara groups.

New Hope also owns 50 percent of PT Indonesia Bulk with the remaining shares held by Indonesian shareholders, Tirtamas, Swabara groups and PT Dermaga Batu Perkasa.

The $2.5 billion Paiton coal fired plant, consisting of two units each with a capacity of approximately 615 megawatts, was built by PT Paiton Energy Company whose shareholders are the United States' Mission Energy and General Electric, Japan's Mitsui and Co. Ltd. and Indonesia's PT Batu Hitam Perkasa.

During the gathering, a memorandum of understanding was also signed by Australia's Ray White Real Estate with Indonesia's PT Mercanta Propindo.

PT Mercanta Propindo's President Jenny Jethnani told the Post that her company, and Ray White, will jointly market properties both in Indonesia and Australia.

"For example, we will cooperate to market King's Gate apartments in Mampang, southern Jakarta area and housings, lands or other properties in Perth and Sydney to Indonesians," Jenny said.

The Australian embassy said Indonesia-Australia business ties have been expanding rapidly, as shown by an increase of around 63 percent in the issuance of business visas over the previous year.

Jenny added that since most Indonesian buyers of properties or houses in Australia are those who send their children to study in their country, her office also provides other related services, such as information about schools and assistance in getting multiple entry visas.(als)