Malaysian firm mulls Kalimantan investment

Rusman , The Jakarta Post, Samarinda

A Malaysian firm will invest in the construction of an 88- kilometer road linking Samarinda and Balikpapan in East Kalimantan.

In a meeting with the East Kalimantan administration, Daimori Venture Capital Corporation Sdn Bhd's senior vice president Azali Arifin said on Tuesday that the company wanted the land for oil palm plantations in return for its financing of the Rp 1.92 trillion (about US$205 million) project. He did not specify the amount the firm planned to invest.

"To compensate our investment in constructing the road, we hope the East Kalimantan administration would give us land for plantations, particularly on the sides of the road," he said.

Second assistant to the province's secretary Nusyirwan Ismail welcomed the firm's investment plan but said further discussions would be needed about the provision of land.

The provincial government would have to involve regional administrations, as the land directly alongside the road would only amount to 3,000 hectares, far below the firm's need of 20,000 ha, he said.

Nusyirwan did not specify where the 20,000 hectares of land would come from. Much of the road's route and surrounding area currently has national park status.

East Kalimantan Development Planning Board head Sulaiman Gafur said the construction plan had undergone feasibility study and the administration had allocated Rp 18 billion (US$1.9 million) to land acquisition for the road.

The project will be jointly financed by both the government and private investors.