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Jakarta Post

Palapa Ring undersea cable projects to start this year

  • The Jakarta Post

    The Jakarta Post

Jakarta   /   Tue, March 8, 2016   /  08:54 am

After years of delay, the ambitious nationwide Palapa Ring project is expected to begin soon following the signing of the government'€™s commitment to guarantee the broadband network project connecting the entire archipelago.

The Palapa Ring project, which will involve laying down 11,000 kilometers of undersea fiber-optic cable, will be divided into three sections '€” the West, Central and East package.

Communications and Information Minister Rudiantara officially signed on Friday an agreement for the development of the Central Package with Len Telekomunikasi Indonesia, which will lay down 2,700 km of undersea fiber-optic cables connecting Kalimantan, Sulawesi and North Maluku.

The Rp 1.38 trillion (US$105.6 million) undersea cable project, which is expected to start in the third quarter of this year, is scheduled for completion in 2018, Rudiantara said, adding that state-owned financing guarantee company Penjaminan Infrastruktur Indonesia (PII) on the behalf of the government would guarantee the project.

The cooperation agreement for the West Package, which will be developed by Mora Telematika Indonesia, was signed on Monday. The project'€™s estimated costs of Rp 1.28 trillion will involve laying down 2,000 km of submarine fiber-optic cable that aims to connect Riau province, Riau Islands and the Natuna Island off Sumatra. PII will also act as the financial guarantor.

The East Package is still in the pre-qualification stage. It will connect East Nusa Tenggara, Maluku, West Papua, and remote places inside Papua. Currently, there are seven companies who have registered for its tender.

Palapa Ring is the first government-to-business cooperation (KPBU) scheme within the telecommunications sector that will utilize the availability payment method, in which the private partner would receive payment based on availability of the designed infrastructure at a specified performance level.

With the Palapa Ring project, the government hopes to expand broadband service availability to all regions within Indonesia as well as to reduce its usage costs.

At present, the top-five cities with the fastest internet access are Bandung, Bekasi, Jakarta, Surabaya and Tangerang, all which are located in Java. Currently, the archipelago'€™s broadband distribution outside of Java is poor, where most people outside of Java cannot enjoy good internet, while even if they can, the cost is high.

'€œWe hope that by 2019, people in every part of Indonesia will have the same opportunity to access the internet,'€ Rudiantara said after the signing ceremony on Friday, which was also attended by Coordinating Economic Minister Darmin Nasution and Finance Minister Bambang Brodjonegoro. The Palapa Ring is part of the government'€™s priority projects, which is overseen by the Committee of Infrastructure Priorities Development Acceleration (KPPIP) led by Darmin.

The KPPIP, which focuses on the acceleration of priority infrastructure projects, can filter which projects can be financed with the state budgets and which projects can be financed by the KPBU scheme, Bambang said.

'€œI hope that more large-scale infrastructure projects with commercial value can be financed by using the KPBU system so that the burden on the state budget can be reduced,'€ he said in his address at the signing ceremony.

The Palapa Ring project, formerly called Nusantara 21, was initiated by the government in 1998, but it was delayed due to Indonesia'€™s worst ever economic crisis.

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