Kuntoro to improve investment climate

JAKARTA (JP): Minister of Mines and Energy Kuntoro Mangkusubroto pledged yesterday to improve the investment climate in the country's mining and energy sector.

Kuntoro said the improvement of the investment climate would be the ministry's top priority to boost the government's dollar- based earnings from the sector.

"I shall apply transparency and consistency to attract investors," Kuntoro said in a speech during the ceremony marking the transfer of the ministerial post from I.B. Sudjana to him.

The ceremony was held at the ministry's headquarters after the installment of the new cabinet ministers at the presidential palace.

Kuntoro said he would restructure the ministerial organization to boost efficiency and transparency as one of the priorities during his five-year tenure.

Kuntoro said he would also seek effective measures to minimize the impact of the planned increase in fuel and electricity rates on the public.

The government plans to increase fuel and electricity prices in the near future to reduce the government's subsidies on both.

"I believe the public will accept any action we take with regards to fuel and electricity as long as it is reasonable and orderly."

Kuntoro served as director general of mining from 1993 until March 1997, but he was dismissed by Sudjana in 1997 following the Busang gold scandal.

The Busang gold field was touted as the world's biggest gold find of the century, but an independent study said it was a hoax.

Sources said he was dismissed by Sudjana because he was opposed to Sudjana's move to obtain a stake in the Busang gold field for the government. Kuntoro insisted that the government should not breach any contract.

After his dismissal, he was appointed deputy chairman of the Investment Coordinating Board.

Kuntoro has received a positive reception from industry officials and analysts, despite his lack of experience in the petroleum business.

Oil and gas officials surveyed Monday by Dow Jones Newswires said Kuntoro's reputation as a technocrat, his independent stance in last year's Busang gold scandal, as well as his experience in restructuring state companies bode well for the country's oil and gas industry.

'(Kuntoro's) one of the good ones in the cabinet,' said a Jakarta-based industry source. 'He's a technical man, (and) the industry is pleased with his choice...He's well respected by the industry.

Despite his dismissal last year, Kuntoro was selected for the influential minister's post, thanks in part to his close ties to new economy, finance and development supervisor Ginandjar Kartasasmita and Vice President B.J. Habibie, sources said.

Kuntoro takes over at the energy ministry at a time when the energy sector faces a host of problems.

Pertamina is now grappling with the politically volatile issues of lifting domestic oil subsidies, payment delays to oil and gas field operators and restructuring of the enormous state oil and gas enterprise. (jsk)