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Jokowi reassures foreign investors

  • Ina Parlina and Suherdjoko

    The Jakarta Post

Batang | Sat, August 29, 2015 | 04:35 pm
Jokowi reassures foreign investors VIP inspection: President Joko “Jokowi” Widodo (third left, wearing white shirt) and his entourage inspect the 2,000-megawatt coal-fired power plant site in Batang, Central Java, on Friday. The US$4 billion plant is expected to be finished in 2019. The construction of the project was delayed due to land acquisition problems. (JP/Suherdjoko) (third left, wearing white shirt) and his entourage inspect the 2,000-megawatt coal-fired power plant site in Batang, Central Java, on Friday. The US$4 billion plant is expected to be finished in 2019. The construction of the project was delayed due to land acquisition problems. (JP/Suherdjoko)

VIP inspection:  President Joko '€œJokowi'€ Widodo (third left, wearing white shirt) and his entourage inspect the 2,000-megawatt coal-fired power plant site in Batang, Central Java, on Friday. The US$4 billion plant is expected to be finished in 2019. The construction of the project was delayed due to land acquisition problems. (JP/Suherdjoko)

As a sign of his seriousness in lifting bottlenecks surrounding infrastructure development, President Joko '€œJokowi'€ Widodo officiated on Friday the construction of Southeast Asia'€™s biggest power plant four years after its development sputtered out due to protracted problems in land procurement.

Jokowi'€™s resolution to the problems plaguing the 2 x 1,000 megawatt (MW) coal-fired power plant located in Batang, Central Java, will test his leadership abilities after he repeatedly promised Japanese Prime Minister Shinzo Abe that he would not sit idly by and allow a chain of obstructions to hamper the construction and development of the plant.

The Japanese-funded plant, the first to be built under a public-private partnership (PPP) scheme, is of significant strategic importance as it could help avert electricity crises in Java and Bali.

'€œWe hope this [ground-breaking ceremony] will serve as a model of success and optimism illustrating that all problems related to investment can be resolved,'€ Jokowi said during his speech at the site.

'€œDon'€™t let investors doubt us anymore. We want to show the world that we can solve problems.'€

Japan'€™s Electric Power Development Co. (J-Power) and Itochu Corp., as well as Indonesia'€™s PT Adaro Energy formed PT Bhimasena Power Indonesia to construct the plant in 2011 at an estimated
cost of US$4 billion, a cost that will mostly be financed by the Japan Bank for International Cooperation.

Although the consortium has secured 90 percent of the required 225 hectares of land, it cannot start construction because the remaining 10 percent of the disputed plot has yet to be secured, and it is on this part of the land that the plant'€™s turbines are set to be located.

Changes in the design are very unlikely, making the ability to secure the remaining 10 percent a make-or-break issue.

The commercial operation of the plant was expected to start in 2016. However, in July of last year, the developer declared the project burdened by a force majeure, citing unresolved land acquisition issues.

Local residents and environmental groups have opposed the plant, arguing had the project would affect land fertility.

'€œThere will no longer be any more stalled projects due to, for example, permits and land acquisition issues,'€ the President assured investors during the event, which was attended by a number of Japanese officials.

Despite the President'€™s reassurance, full-scale work at the Batang site would only begin when the remaining 10 percent of needed land was fully acquired, said Masao Kitakaze, a spokesman for J-Power as quoted by Bloomberg.

Jokowi assured those concerned that he was working closely with local governments to help speed up the land procurement process.

'€œThis is undergoing a peaceful resolution process. Because, once again, electricity is not merely about industry and hotel lamps, but also about supporting our children to learn [during the nighttime], and to support small businesses and shops in the villages,'€ the President said.

Central Java Governor Ganjar Pranowo, Jokowi'€™s colleague in the ruling Indonesian Democratic Party of Struggle (PDI-P), was given one month by the President to settle the land acquisition dispute.

Ganjar said he would offer more generous compensation for the landowners, but did not specify the details of the new scheme.

'€œI do not want my citizens to suffer losses,'€ Ganjar said. '€œI am currently offering them better schemes, if they want those.'€

According to Agrarian and Spatial Planning Minister Ferry Mursyidan Baldan, only around 11.1 hectares of land had yet to be settled as of Friday after three families recently agreed to give up their land for compensation.

Ferry said that another dialogue session would be held next Monday.

State-run power company PT PLN president director Sofyan Basir said the project would be commercially operational by the end of 2019, a delay of a year from the date that Jokowi had originally requested.

Jokowi'€™s visit to the site was met by a protest of more than 1,200 activists and people claiming to be landowners.

Some demanded higher compensation for their land while some entirely opposed the construction due to concerns of potential environmental destruction.

'€œI voted for Jokowi. But now he wants to destroy the fertility of our land by supporting the power plant,'€ said Cayadi, one of the protesters. Cayadi failed to get near the President as hundreds of police and military personnel were deployed to secure the site.

There are 60 land owners who are still refusing to sell their land.

In response to the protest, Jokowi lightly replied: '€œThey staged the rally in the sea? [the plant site is located near the Java Sea]. It'€™s OK if they protest. I'm fine with that.'€

'€” Agus Maryono also contributed to this story

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