Inhutani IV's laments partners' slow progress

JAKARTA (JP): State-owned forestry company PT Inhutani IV said yesterday its joint-venture industrial-timber estate development was falling behind schedule because of overlapping claims and the "unprofessional management" of its private-sector partners.

Inhutani IV president Abas T.S. said yesterday the delay meant the joint-venture firms had problems getting reforestation funds from the government to further develop their estates.

"The areas allocated for our estates often overlap with non- forestry projects, such transmigration sites and plantations," he said on the sidelines of a House of Representatives' hearing.

Executives from the state-owned PT Inhutani V also attended the hearing with House Commission IV for forestry, agriculture and transmigration.

Abas said most of Inhutani's private partners -- which handle the joint-venture's daily operations -- had little experience in estate management.

He conceded Inhutani IV could not help the partners much because its role in the joint ventures was primarily as a shareholder.

Inhutani IV has been teaming up with private firms since 1994 to establish 17 industrial estates in Aceh, North Sumatra, West Sumatra and Riau.

Inhutani IV's joint-venture estates cover 367,525 hectares, but only 43,515 hectares (11.8 percent) have been planted with industrial timber species.

"In the beginning 14 percent of the joint-venture project's funds come from government equity in the venture and 21 percent comes from the private partner's equity," Abas explained.

"The remaining investment comes afterwards from reforestation funds, which are given only after the joint venture can demonstrate that it has established at least 70 percent of the plantations with the initial funds," he said.

Analysts say problems in getting reforestation funds because of red-tape have delayed the development of most of the country's industrial timber estates.

But Abas said this was not the case.

"It is because the inability (of the joint ventures) that the disbursement of reforestation funds has been deferred. It's not the other way around," he said.

Inhutani V president M. Toha said yesterday his company would in future rely mainly on wood from industrial timber estates.

The firm only has one forest concession and a forest-clearing permit. The permit allows it to use wood obtained from land- clearing for transmigration sites and plantations.

Apart from its 176,550-hectare concession, Inhutani V also oversees four joint-venture concessions and 21 concessions previously owned by private firms.

The firm's operations cover Jambi, South Sumatra, Bengkulu and Lampung.

Toha predicted that by 2005, no more timber would be obtained from land-clearing.

"That is why we are developing industrial timber estates, which we hope can be harvested from 2002," he said.

Inhutani manages one industrial timber estate and eight joint- venture industrial timber estates.

The government stipulates that industrial timber estates should be established to guarantee supplies for wood-based industries. The estates are developed by planting deforested grasslands with selected timber species. (pwn)