PGN seeks guarantees for Sumatra project
PGN seeks guarantees for Sumatra project
Fabiola Desy Unidjaja, The Jakarta Post/Pekanbaru
State gas distributor Perusahaan Gas Negara (PGN) is seeking a
guarantee from provincial and local governments to support its
key pipeline project linking the Duri gas field in Riau to North
Sumatra.
In a meeting here with Riau Governor Rusli Zainal, PGN
president director W.M.P. Simanjuntak said the guarantee was
needed for investors to avoid unnecessary snags over land
acquisitions and permits.
"Of course (the guarantee) is important to assure investors in
this key project that such issues will not hamper its
realization. But, we are also keen to assure local authorities
that the project will benefit the provinces," Simanjuntak said on
Wednesday after the meeting, which was part of series of forums
held between the company and regional governments.
Locals could get jobs in the new regional companies in charge
of gas distribution that would be established, while some of the
gas would be earmarked for local SMEs, especially palm oil
businesses that were flourishing in the area, Simanjuntak said.
In response, Governor Rusli said he would coordinate with the
regencies involved in the project, and underlined that his office
would try to identify possible problems the project may encounter
in the future so as to find solutions.
"We cannot say anything yet, because we are still working out
which regencies will be affected by the construction, but of
course we will try to find best solutions," Rusli said.
Since the implementation of regional autonomy in 2001, many
investors have complained about the resulting confusion caused by
numerous regulations, often contradictory to those issued by
central government, which often cause expensive delays and boost
production costs. Many regulations have been criticized as
excuses for bribe-taking by government officials.
PGN is planning to build some 493 kilometers of pipeline from
the Duri field in Riau to North Sumatra, a project worth some US$
300 million. The project is due for completion in July 2007.
The pipeline will pass through several regencies in four
provinces -- North and South Sumatra, Riau and Jambi.
"What we can say is that we are committed to helping investors
as it will help us improve the province's economy, but we would
also like to see the project benefit local people," Rusli said.
The Riau administration planned to build two gas-fired power
plants in the area, he said.