Restart of some projects 'will not undermine reform'
JAKARTA (JP): The government said yesterday the resumption of projects previously postponed or reviewed would not undermine governmental efforts to tackle the currency crisis.
State Minister of National Development Planning Ginandjar Kartasasmita said yesterday the projects that were resumed were mostly ones which were already underway or those with rupiah financing.
"Just look at all those toll road projects, almost all of them use domestic financing," Ginandjar said.
Revived toll road projects include the Semarang Section C toll road, the Ujungpandang toll road, the Pondok Aren-Serpong toll road and the Aloha Waru-Tanjung Perak toll road.
President Soeharto, through Presidential Decree No. 47 dated Nov. 1, ordered 15 projects -- eight power plants, four toll roads, one airport, one building and one equipment-provision project -- to continue.
Eight of the projects had been put under review, while the remaining seven projects had been postponed under Presidential Decree No. 39 dated Sept. 20.
Loans
Presidential Decree No. 39 postponed and put under review some US$37 billion worth the infrastructure projects financed with foreign loans to cope with the rupiah's sharp depreciation against the U.S. dollar.
Ginandjar said the President had instructed his team to review the list of postponed projects or projects under review once every three months.
"We'll basically allow projects which are already 50 percent complete or those which do not use foreign loans to continue," Ginandjar said.
The revival of the projects was triggered by the recent fatal crash of a Garuda Indonesia airplane near Medan, North Sumatra, which forced the government to revive the previously postponed airport project to replace Polonia Airport in Medan.
"We asked the Ministry of Transportation to continue the airport project because the route approaching Polonia Airport is quite dangerous," Ginandjar said.
The new airport project is being developed by PT Citra Lamtorogung Persada, owned by the President's daughter Siti Hardiyanti Rukmana.
On the resumption of some big power projects, Ginandjar said developers had already secured financing, so there was no reason to delay them.
He said the revival of the controversial Tanjung Jati C power project in Jepara, Central Java, was based on the fact that its benefits were difficult to ignore. The same reason was given for the Tanjung Jati A project, also in Central Java.
"I think Tanjung Jati A and C will continue, because they are beneficial, but not Tanjung Jati B," Ginandjar said.
The 1,320 megawatt coal-fired Tanjung Jati C power project worth $1.98 billion was awarded to Consolidated Electric Power Asia.
The 1,320-megawatt coal-fired Tanjung Jati A power plant was given to a consortium consisting of the President's daughter Siti Hediati Prabowo and the Bakrie Group
Other power projects licensed to continue are the 330-megawatt Sarulla geothermal power project in North Sumatra, owned by a consortium consisting of the United States' Unocal Corp and the Nusamba Group; and the 55-megawatt Patuha geothermal power plant in West Java controlled by a consortium led by California Energy of the U.S.
The other power projects are the Karaha geothermal power plant, Unit 1 and Unit 2 of the Drajat geothermal power plant, the Asahan I hydropower plant, and the Palembang Timur combined- cycle power plant in South Sumatra, which is being financed by PT Astra International.
The government also decided to continue a small project to improve the Meteorology and Geophysics Agency's equipment, financed by export credit. (imn/rid)