Inhutani IV refuses to pay Aceh bill

Inhutani IV refuses to pay Aceh bill

JAKARTA (JP): PT Inhutani IV, the state forestry company with
large concessions in Sumatra, refused yesterday to pay Rp 3.76
billion ($144 million) demanded by the Aceh provincial
administration in local development levies.

Inhutani IV President Abas Ts said the company had never
agreed to pay as much as Rp 2,000 per cubic meter of concessions
to the Aceh administration.

"Inhutani IV is under strict orders from the minister of
finance not to pay any levy that does not have strong
legitimacy," Abas said.

Abas cited the minister of finance's 1995 decree which states
that management should not respond to any request from within or
outside the bureaucracy which could affect its objectivity in
making decisions.

The finance minister is the nominee holder of all state-run
companies.

The row erupted in July when Aceh Governor Syamsuddin Mahmud
wrote to the Minister of Forestry Djamaloedin Soeryohadikoesoemo,
demanding a freeze on Inhutani IV activities because the company
did not bring any benefit to the province.

Founded in 1991, Inhutani IV runs 224,200 hectares of forest
in Aceh, North Sumatra, West Sumatra and Riau. It manages 17
joint-venture timber estates and will develop 15 joint-venture
concessionaires in northern Sumatra.

Abas said talks to resolve the row with the Aceh
administration broke down and Inhutani IV was now waiting
instruction from Minister of Finance Mar'ie Muhammad.

He questioned the Aceh administration's calculations, saying
his company had only produced 525,000 cubic meters of wood since
it began operation in Aceh in 1992.

"Even if we have to pay Rp 2,000 per meter levy, the total
debt will amount to about Rp 1 billion," he said.

The company's present activities in Aceh include replanting
1,100 hectares in the former Olindo and Singkil concessions,
maintaining 7,500 timber estates in Aceh Besar, planting 1,100
hectares of mangrove forest in Langsa, East Aceh, developing
1,100 hectares of public forest in Tiro and 1,000
hectares of protected forest in Indrapuri, and some social
activities.

The company booked a pretax profit of Rp 6.7 billion ($2.58
million) last year, up from Rp 4.1 billion in 1995. (08)