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Jakarta Post

Jokowi worries '€˜big forces'€™ hampering govt projects, policies

  • Raras Cahyafitri

    The Jakarta Post

Banggai, Central Sulawesi   /   Mon, August 3, 2015   /  03:28 pm

President Joko '€œJokowi'€ Widodo has said that numerous big projects in the country are being left idle and unfinished for years because there are '€œbig forces'€ that consistently hamper the development of government programs and policies.

The president said that he was undeterred and offered political support to speed up the implementation of policies or the realization of a government project.

'€œIf political back up is needed, please tell me. Sometimes even ministers cannot execute a policy because '€˜big forces'€™ work against them,'€ Jokowi said during the inauguration ceremony of several oil-and-gas projects in Central Sulawesi on Sunday.

To offer an example, Jokowi mentioned the recent policy undertaken by the Maritime and Fisheries Ministry to sink illegal fishing boats. '€œI needed to order it three times before it was executed,'€ he said.

Many big projects currently under the spotlight surround the oil-and-gas sector and the mineral and coal industries.

There are several big deepwater gas projects, such as the Indonesia Deepwater Development (IDD) by Chevron and the development of a deepwater facility at the Masela block by Inpex, which are currently in a state of uncertainty because contractors are still working on the revision of the projects to make them more economical with a longer contract period.

The issue of the expiring contract of giant copper miner PT Freeport Indonesia is currently also a nightmare for the government.

The company is planning to invest billions of dollars for its underground mining and smelter development yet it needs certainty that it will be able to continue to operate beyond 2021, a complicated issue involving a law and certain regulations that the government are still trying to solve.

Chevron and Freeport bosses recently met to Jokowi to try and solve the issue.

Meanwhile, late last week the government decided to keep the fuel price at its present level despite rising concerns that this price level would result in bigger losses for state-owned Pertamina.

Since late March, the government has set the price of Premium-branded gasoline far below the market price, arguing that the move was needed to maintain people'€™s purchasing power.

Given the fact that there is no fuel subsidy for Premium, the price gap grew higher alongside with the inching upward of the world price. In July, the gap grew from Rp 750 (5 US cents) to Rp 1,950.

Pertamina, the country'€™s biggest dividend payer to the government, has recorded Rp 12 trillion in losses that it has had to bear from selling fuel below the market price.

Apart from promising '€œpolitical support'€, Jokowi also called for a re-industrialization program aimed at processing the country'€™s resources in domestic facilities rather than sending them abroad as raw materials.

'€œTo support the downstream industry, there must be energy [infrastructure] that must be built. Integrated projects should be continuously established in all regions so that they will generate a large effect for the country,'€ he said.

On Sunday, Jokowi officially inaugurated several projects integrating the upstream and downstream sectors of oil-and-gas with a total investment of US$5.8 billion.

The projects consisted of the central processing plant operated by the Joint Operating Body Pertamina Medco Tomori Sulawesi, the first shipment of an LNG cargo from the Donggi Senoro LNG Plant to the Arun re-gasification terminal in Aceh, the GG field in the Offshore North West Java block and breaking ground in the development of an ammonia plant owned by PT Panca Amara Utama.

'€œPotential income for the government will be about $7.02 billion for a 13 year period based on the assumption that the oil price will be listed at $70 per barrel. This assumption is still reliable,'€ Energy and Mineral Resources Minister Sudirman Said said.

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