New investors, old problems in water industry

Bambang Nurbianto, The Jakarta Post

The polemic in the media over the sale of shares by two foreign-owned water companies in Jakarta ended after Governor Sutiyoso approved the proposal of RWE Thames Water to sell 100 percent of its shares in PT Thames PAM Jaya (TPJ), the water company that serves the eastern part of Jakarta.

The sale followed a similar move by France's Suez Environment, which has reportedly sold 49 percent of its shares in PT Pam Lyonaisse Jaya (Palyja), the water company operating in the western part of the capital.

Thames Water sold its shares to Singapore-based Aquatico Pte. Ltd., while Suez Environment sold its shares to PT Astratel Nusantara (Astratel) and Citigroup Financial Products Inc. Before these transactions, Thames Water and Suez Environment held 95 percent of the shares in TPJ and Palyja respectively.

The local government-owned Jakarta tap-water company, PD PAM Jaya, holds the remaining 5 percent of the shares in the two companies.

The Palyja divestation took place smoothly because under its agreement with PAM Jaya, a sale of less than 50 percent of its shares does not need the approval of the Jakarta administration. That was not the case with TPJ, where the departure of the Britain-based company followed a lengthy debate.

The deals, however, are unlikely to solve the long-standing water-supply problems plaguing the capital, which the former investors were unable to address since their arrival nearly a decade ago.

No significant improvements in services have been seen since the Jakarta water business was taken control of by the foreign investors, as evident from the thousands of complaints sent to the companies. There are now a number of unresolved problems that the new investors will have to tackle as a legacy.

First, the scarcity of raw water, particularly during the dry season, as the companies rely too much on water from the Jatiluhur reservoir in West Java. Meanwhile, the water from the 13 rivers in the capital is too dirty to be processed into potable water.

Second, many people are unhappy about a clause in the agreement that provides for automatic water-price increases every six months. There have been rumors circulating that the privatization of the tap-water business was made possible due to collusion involving the family of then president Soeharto. Both Palyja and TPJ have denied the accusation.

Third, water privatization remains a controversial issue in this country, despite the enactment of the 2004 Water Resources Law. Many insist that privatization will deny the poor access to water.

Fourth, and most problematic, many customers say they have not seen any significant improvement in services since the arrival of TPJ and Palyja, although the two companies say they have invested a lot on improving water-supply infrastructure, such as the construction of new mains and the repair of old ones.

Palyja says it had invested some Rp 893 billion by 2005, while TPJ says it had pumped in some Rp 604 billion by the same year. But the old mains, many of them built during the colonial era, remain in use, causing water loss, poor quality of water and high costs.

According to a report issued by Palyja in late 2005, the company lost 46 percent of its water due to mains leakage. When the Jakarta-owned water company ran the system, the leakage rate was even worse at 61 percent. Customers have to bear the cost of the leakage through steadily increasing water charges, which is unfair.

The poor condition of the mains also results in poor water quality. Both TPJ and Palyja say they produced potable water, but its quality deteriorated due to the poor state of the mains.

Thames' exit from the water business in Jakarta and Suez Environment's divestation have been on the cards since 2003. An executive of one of the companies said at that time his company would quit if the Jakarta administration refused to raise water charges.

The Jakarta administration delayed tariff increases for several years despite the agreement that the water charges would rise every six months. This delay was due to the fact that Indonesia was still feeling the pinch of the economic crisis of the late 1990s. The two foreign companies, perhaps, came to Indonesia at the wrong time.

As a result of the postponed tariff increases, the administration ended up owing the two companies some Rp 900 billion (US$100 million) in shortfall payments in 2005 alone.

With the Indonesian economy now holding out brighter prospects, the new water investors may be hoping for a more lucrative business. The replacement of the old mains is the most urgent measure that needs to be taken by the new investors, given that the poor infrastructure is the root cause of the high cost of tap water.

The expansion of the mains is of equal importance in view of the fact that only about 40 percent of Jakarta's population has access to tap water.

The writer is a journalist with The Jakarta Post. He can be reached at bnurbianto@thejakartapost.com.

Jakarta facing dry future

The Jakarta Post

It was the second warning from Jakarta's tap water operators that water levels at West Java's multipurpose Jatiluhur Dam were dangerously low.

PT PAM Jaya and its foreign partners PT Thames PAM Jaya and PT PAM Lyonnaise Jaya said at a press conference Tuesday the dam, which is the main provider of raw water for the companies, was drying up in the face of unseasonably high temperatures.

The water level at the dam was 83.99 meters on Tuesday, much lower than the normal 105 meters. As a result, tap water production was only 65 percent of normal.
This was the second time the companies had issued such a warning. In 2005 they expressed concern over the deteriorating quality of groundwater and the decreasing sources of water due to environmental degradation.

Everything the tap operators said is undisputable fact: the quality and quantity of groundwater in Jakarta is deteriorating.

In densely populated kampongs, residents frequently have to dig their artesian wells deeper during the dry season. And it is becoming more and more difficult to find new locations to dig wells because of the profusion of septic tanks, which frequently leak out into the groundwater.

According to several reports, groundwater samples taken in different areas of the teeming capital have been found to be heavily contaminated with dangerous metals and bacteria.

In several residential areas, residents have had to drill artesian wells near roads in a bid to find a clean water source.

Cinta Air, a non-governmental organization that educates people on water resource protection, says Indonesia now ranks third in the world for the number of people lacking access to safe drinking water.

Environmental degradation is at least partly to blame for the decreasing water level at Jatiluhur Dam. The phenomenon was first detected several years ago, but no serious effort was made to reverse the trend.

More and more high-rise buildings have gone up in Jakarta, further exploiting groundwater and contributing to the decline in quantity.

Jakarta residents, tap water subscribers and those who depend on artesian wells need to be aware that one day there will be no more groundwater.

To put this day off, residents need to save water. Small underground reservoirs built in the yard of every house will help save water. The Public Works Ministry introduced such underground reservoirs more than a decade ago, but lack of awareness and the financial costs have meant these reservoirs have not caught on.

With tap water companies only able to serve around 30 percent of Jakarta residents, most people continue to depend on groundwater taken from their wells.

But it is not fair if only residents are put on alert over the dwindling supply of groundwater. The government should also be warned that something must be done to address the problem.

Nature has limits on how much water it can provide, so people must do more to preserve and protect water supplies. Establishing a sewage system in every mayoralty would be a start. These systems should include large ponds designed to treat all kinds of wastewater from households, and a plant equipped with devices able to "clean" wastewater and then distribute it back to neighborhoods.

In the ponds, wastewater would go through the aeration process, in which the water would get more oxygen to increase its biochemical oxygen demand (BOD). This process is like those of other treatment systems that produce and distribute ready-to-use water to households.

The city now has just one such treatment plant, in Setiabudi, South Jakarta. But the plant, established with funds from World Bank in the early 1990s, only treats wastewater from high-rise buildings and does not distribute treated water to households.

Setting up sewage systems in mayoralties would be big and expensive projects requiring the involvement of investors. That is why mayors with vision are needed. Investors will require assurances that they will recoup their money within a certain period from the fees paid by residents who enjoy the services of the system. Therefore, mayors with good managerial skills are needed.

Also necessary would be a kind of cross-subsidy scheme designed to help the poor afford the services of the sewage systems. In this way, people will no longer be so dependent on groundwater, which will ease the pressure on this natural resource and ensure its continued availability in the years and decades to come

'Well water in Jakarta is unhealthy'

The Jakarta Post

JAKARTA (JP): The quality of well water that is consumed by half of Jakarta's households is not getting better last year, a survey said on Thursday.

The Jakarta administration's survey showed that 80 percent of 75 wells across the city produced water which had been infected by unhealthy substances.

"The quality of water between 10 and 20 meters in depth is steadily decrease that no longer fit for human consumption," Daniel Abbas, head of the BPLHD's environmental damage controlunit told The Jakarta Post.

The report, which will be published next month said that the well water was mainly polluted by bacteria such as e-coli.

The annual survey measures parameters of temperature, salinity, content of detergent, iron, manganese, hydrogen sulfide, and the biological substances of bacteria and viruses.

Daniel said that the high e-coli contamination in well water was due to the poor sewage system in the city as most of household waste went in to septic tank which located near the wells.

"People look proud for not slurping its septic tanks in a long period. They are not aware that the old septic talks could leak raw sewage into the groundwater supply," he said.

The supply of the clean water has long been a pressing proble in Jakarta.

The city-owned water operator, PD PAM Jaya which relied on raw water from other provinces could only deliver tap water to half of Jakartans. (aps)

WWF says coffee grown national park threatens rhinos, tigers

The Jakarta Post

JAKARTA (AP): Coffee beans exported to the West are being illegally grown inside an Indonesian national park, threatening the habitat of endangered tigers, elephants and rhinos, the WWFsaid Wednesday.

Around 19,600 tons of coffee from the Bukit Barisan Selatan National Park on Sumatra Island are mixed with legally grown beans by local traders and exported each year, according to the global conservation organization.

"If this trend of clearing park land for coffee isn't halted,the rhinos and tigers will be locally extinct in less than a decade," Nazir Foead, WWF-Indonesia's Director of Policy and Corporate Engagement, said in a statement.

"We think even the world's most committed coffee drinkers willfind this an unacceptable price to pay for their daily caffeine buzz."

WWF said several Western food and drink companies were buying the illegal beans.

The group said it had told the companies of its findings. Some denied buying the tainted coffee, while others were discussing how to avoid buying it in the future, the group said.

Bukit Barisan Selatan is one of the few protected areas where Sumatran tigers, Sumatran elephants and Sumatran rhinos coexist.It is one of the most important habitats left for the three, all endangered or critically endangered species, the WWF said.

Indonesia is the world's second-largest exporter of robusta coffee, which is often used in instant coffee and packaged coffee sold in supermarkets.

Moderate earthquake rocks Indonesia's Papua

The Jakarta Post

JAKARTA (AP): A moderate earthquake rocked parts of Indonesia's Papua province on Wednesday, but there were no reports of any damage.

The 5.9 magnitude quake hit 129 kilometers southwest of Jayapura, the provincial capital, the U.S. geological survey said on its Web site.

A resident contacted by phone in the city said she had not felt the quake, which was centered deep below the surface of the earth.

Indonesia, the world's largest archipelago, is prone to seismic upheaval due to its location on the so-called Pacific "Ring of Fire," an arc of volcanoes and fault lines encircling the Pacific Basin.

A massive earthquake and subsequent tsunami on Dec. 26, 2004, killed more than 131,000 people in Indonesia's Aceh province and left half a million homeless.

Indonesia to cull backyard chickens amid spike in bird flu cases

The Jakarta Post

JAKARTA (AP): Indonesia will slaughter hundreds of thousands of backyard chickens over the next week in a bid to stem a surge in human deaths from the H5N1 virus, the health minister said Wednesday.

Siti Fadilah Supari said local governments will issue regulations banning the rearing of poultry in residential areas, signaling a more forceful approach in the nation worst hit by the virus.

She said owners would receive compensation of just under US$1.50 per bird, with the main focus of the cull in the capital, Jakarta, and densely populated areas to the west where most of Indonesia's human infections have occurred.

House calls on govt to tighten control over meat, innards imports

Jakarta (ANTARA News) - House Commission IV legislators in charge of agriculture and food called on the government here on Tuesday to tighten control over meat and entrails imports.

"Commission IV has received many complaints on the imports of meat using innards import documents," Azwar Chesputra of the Golkar Party faction of the House of Representatives (DPR) said.

Mindo Sianipar of the Indonesian Democratic Party of Struggle (PDI-P) faction also made the same call, urging the government to prevent manipulations of meat and entrails import documents.

According to Azwar, a cartel, which consists of four or five companies, among others, PT Anzindo, PT Sumber Laut Perkasa, PT Indogama and PT Bumi Mastro Ayu, is now taking control of the meat imports in the country.

He said the fact they control meat imports also enables them to manipulate the documents easily.

Azwar said the allegation that meat imports had entered the country using innards import documents was true.

When the Commission IV members conducted an impromptu visit to the container terminal at Tanjung Priok seaport on Monday, they found illegal meat imports.

The impromptu visit was made by at least ten Commission IV members from different political party factions. They included Bomer Pasaribu of the Golkar Party, Azwar Chesputra, Hifnie Syarkawi of the United Development Party, Sudjud Surajudin of the National Mandate Party, Umung Anwar Sanusi of the Prosperous Justice Party and Gde Sumarjaya Linggih of the Golkar Party.

The visit was led by Commission IV Deputy Chairmen Mindo Sianipar of the PDI-P and Suswono of the Prosperous Justice Party.

Mindo said that the meat importers deliberately used entrails documents to avoid paying more import duties.

The government imposed a five percent import duty of the sales values on both meat and innards imports.

But because the price of meat was higher than that of entrails, the importers would gain more profits if they used innards documents for their meat imports.

Bird flu back in Thailand and Japan, found in cats in Indonesia

by Weena Kowitwanij, AsiaNews.it

Virus is found on a duck farm in Phitsanulok. It might easily be transmitted from stray cats to humans. Bird flu outbreak is reported in one farm.

Phitsanulok (AsiaNews) – Concern over the H5N1 virus and the bird flu remains high in Thailand, Japan and Indonesia.

Thawat Suntracharn, director-general of Thailand’s Department of Communicable Disease Control (CDC), said that on “January 10, ducks died on a farm in Phitsanulok. After tests showed they were infected with the H5N1 virus, more than 2,000 birds were culled the next day. This is first outbreak of the year and comes 166 days after the last one.

Tests are also being carried out in every farm within a five kilometre (three miles) radius. Poultry within a ten kilometre radius cannot be moved for the next 30 days

Phitsanulok province has a humid climate and is an ideal place for the virus, which has previously been reported in the area.

At least 22 people have already shown flu symptoms but tests exclude it is of the avian kind.

Concern is growing though because of the approaching Chinese New Year (which falls on February 18 this year), when all Thais of Chinese origin are likely to eat poultry-based dishes.

The CDC is inspecting all slaughter houses to prevent outbreaks. In Phitsanulok health care workers will go house to house to check for people showing bird flu-like symptoms. Should there be other cases emerge, they should show up be within a month.

Meanwhile in Indonesia, C.A. Nidom, head of the Avian Influenza Laboratorium at the University of Airlangga, said the virus was found in dozens of cats in various cities from Java to Sumatra.

Some 500 cats were tested and about 20 per cent were found to carry the virus. This shows that it is evolving and that there is a possibility that the virus might be able to affect humans not only through poultry but also through cats.

Cats, Nidom explained, are much closer to humans than birds, but further studies are needed before one can be sure whether they can pass on the disease or not.

Tested cats were eventually released.

Tests are currently under way for a man in Jakarta’s Persahabatan Hospital. His wife and 18-year-old son died a few days ago—they were infected with the virus.

Should it be proven that direct contagion is possible between relatives, this would confirm the theory that transmission is easier between genetically-related individuals.

For Michael Osterholm, from the University of Minnesota (US), this might be the first sign of the pandemic.

In Japan’s Miyazaki Prefecture, 900 kilometres south-west of Tokyo, 12,000 chickens from one farm will be incinerated after 3,900 of them died last Saturday. But it is not clear whether the H5N1 or any other virus was involved.

Hisanori Ogura, a local health care official, said that the measure taken was only meant to prevent contagion. He added that nothing similar was reported from other farms.

Life is sweet at height of rambutan season

The Jakarta Post, Jakarta

Despite the congested roads, record-high temperatures and other seasonal complaints, a wide variety of fruits are available in the city in January.

One of the most popular is rambutan or hairy lychee (Nephelium lappaceum L.).

The bright red spiny fruit is easy to spot at markets and roadside stalls city-wide.

Udin, a vendor at Palmerah market, Central Jakarta, said he sold one-and-a-half kilogram bunches of Rambutan for Rp 5,000 (about 60 US cents).

He sells more than 500 bunches a day.

"Rambutan is a seasonal fruit but it's most people's favorite," said the man who used to sell drinks at Pulo Gadung bus terminal.

He said mangosteen and duku (Lansium domesticum) -- which has a hard brownish outer covering and sweet whitish flesh -- also came into season in January.

"Selling rambutan is more profitable," he said, adding that he made Rp 200,000 a day.

He said he got his rambutan from plantations in Subang and Bekasi, West Java.

"I always make sure the fruit is fresh."

Another rambutan vendor, Oji, had a similar story.

"I make between Rp 150,000 and 200,000 a day."

He said he bought between 700 and 1,000 bunches a day from an orchard in Rangkasbitung, West Java.

"Thank God, I sell out every day."

Duryat, a resident of Kemandoran, West Jakarta, said he bought three bunches of rambutan over the weekend.

"We're going to have a family gathering at my nephew's house upon his return from the haj. I chose rambutan because everybody likes them."

Aside from fruits that are stocked according to the season, a selection of other fruits, like apples and oranges, are available year round.

Some vendors choose to steer clear of seasonal fruits altogether.

Wagiyem, who has a stall at Pasar Minggu market, South Jakarta, for example, sells nothing but oranges, apples, kelengkeng (small lychees) and grapes.

"I like to keep it simple because so many other vendors sell seasonal fruits, like rambutan, nowadays."

She sells oranges, apples, kelengkeng and grapes for Rp 10,000, Rp 12,000, Rp 18,000 and Rp 40,000 per kilogram, respectively.

She said she was afraid of offering more variety because she runs the stall single-handedly.

"I'm not as young as I was, and I work alone," said the 65-year-old.

She said she made about Rp 800,000 a day -- sometimes more.

"But if there are not many buyers, I take home less than Rp 500,000.

"Sometimes I don't even know how much money I make because I spend it straightaway on fruit for the next day," said the woman, who, like most vendors in Pasar Minggu procure their fruit from Kramat Jati wholesale market in East Jakarta.

"We go to the market as a group, in the back of a pickup truck. We don't go every day -- usually every two days is enough."

Buyers reinforce concerns regarding the need to improve the level of quality and consistency of the fruits sold at city markets.

Price is the first consideration of Istiqomah, a resident of Cipinang, East Jakarta.

"I like all kinds of fruit. Really I don't care what I buy, so long as it's cheap," she said while selecting some apples at a stall in Pasar Minggu market.

She said she preferred shopping at traditional markets because she could bargain the prices down.

"I've got a good deal on these apples," she confided.

But a shopper at a fruit store in Pancoran, South Jakarta -- who asked not to be named -- said she hated haggling over prices.

"It's easier to go to the supermarket," she said, adding that vendors in traditional markets routinely marked up their prices.

"Buyers should be alert to the fact that it's easy to deceive them if they don't know the market price," she said, putting a packet of durian in her trolley.

"I always get my fruit from here because it's close to home."

She said she was not particularly sensitive to environment but prioritized convenience.

"Take this durian, for example, I don't have to peel the prickly rind off, I can just eat it."

BMG data is often not accurate: Aircraft association

JAKARTA (JP): The Indonesian Aircraft Association (INACA) says data from the Meteorology and Geophysics Agency (BMG) are often not reliable, thus pilots do not trust the information from the agency.

Elshinta radio station quoted a senior official in INACA on Monday that pilots must seek information from a more reliable agency due to such a problem in BMG.

"When BMG predicts, for example, our visibility is only few meters, the fact is different," he said during a hearing with the National Commission on Transportation Safety (KNKT.)

He called on BMG to renew and calibrate its weathermeasurement tools to give a more reliable information.

Indonesia to ban backyard poultry to fight bird flu

01.15.07, 7:33 AM ET

JAKARTA (XFN-ASIA) - Indonesia is preparing to ban backyard poultry farming in a renewed effort to fight bird flu, officials said, after the feared disease killed four people last week.

The fatalities raised Indonesia's death toll from the virus to 61, the highest in the world. The vast majority of bird flu cases have occurred after contact with infected poultry.

'This is already ... a situation of health emergency, and we hope that the protection of humans will be much better if birds and humans are separated,' said Aburizal Bakrie, the coordinating minister for people's welfare.

He spoke after a meeting between ministers and the heads of the Jakarta, West Java and Banten regions, which have been worst-hit by the H5N1 virus.

Indonesia's efforts to curb the spread of bird flu have been hampered by the reluctance of some poultry owners, especially backyard farmers, to hand over their sick or potentially infected birds for slaughter.

Health Minister Siti Fadillah Supari said most of Indonesia's victims had had contact with poultry around the house rather than birds from commercial farms.

'In principle, there should be no birds in residential areas,' the minister said, adding that regulations banning backyard poultry will be introduced in the three worst-hit regions.

World Health Organization representative Georg Petersen welcomed the move.

'It is important to reduce contact between birds and people and restrict the raising of chicken in highly-populated areas,' he told Agence France-Presse.

'It has always been our advice to the government to separate birds and humans and in principle this is a very good move,' he said.

Bakrie said the economic impact of the move is being calculated by the affected regions. Jakarta and the provinces of West Java and Banten account for the bulk of bird flu cases.

Bayu Krisnamurthi, the head of the national committee for the control of avian influenza, said the regulations will have to be introduced and implemented by regional governments, which have authority over local farming and fishing.

H5N1 has killed around 160 people worldwide since late 2003 and triggered the mass slaughter of tens of millions of poultry.

Electricity Project Hoping for Funds from UN

Monday, 15 January, 2007 | 16:54 WIB

TEMPO Interactive, Denpasar: A garbage-powered electricity generating plant project that is being built in Denpasar is hoping for funds from Clean Development Management of the United Nations.

“The project helps reducing poisonous gas emitions which is in line with the mission of the institution,” said Made Sudharma, Head of the Garbage and Sanitation Supervisory Agency of Denpasar, Badung, Gianyar and Tabanan, yesterday (01/14).

According to Made, development started one year ago by joining together with British company PT Navigate Organic Energy Indonesia.

The task of the company is to organize the areas of garbage disposal in Suwung, the location of the project.

Made explained that there were some models of garbage management that may produce energy such as sanitary landfill technique—a land management that is equipped with special installation—and anaerobic digestion or decomposition using microorganism for new garbage.

New dry garbage such as plastic, glass, iron, and building ruins, he said, require high temperature non-oxygen warming.

The biogas, which is a byproduct of the process, will be utilizes to activate the turbine.

With an anticipated 1,500 cubic meters of garbage per day, electricity production could be between five and eight megawatts.

Rofiqi Hasan

Asian leaders sign energy pact at landmark summit

By Bill Tarrant, Reuters

Monday, January 15, 2007; 5:52 AM

CEBU, Philippines (Reuters) - Leaders from 16 Asian nations, representing half the world's population, pledged on Monday to develop alternative energy supplies and reduce greenhouse gas emissions.

The agreement capped a week of high-level meetings on the Philippine resort island of Cebu that waded into issues as diverse as disease, disaster, trade and terrorism.

Southeast Asian leaders along with the heads of China, Japan, South Korea, India, Australia and New Zealand held their second East Asia summit in a more purposeful manner after last year's inaugural meeting.

Beijing and Tokyo used the forum sponsored by the Association of Southeast Asian Nations (ASEAN) to further mend ties.

The 16 leaders urged North Korea on Monday to abandon nuclear weapons and respond to humanitarian concerns, including abductions of Japanese in previous decades.

But while Northeast Asian diplomacy featured at the summit, its centrepiece was an Energy Security pact that seeks to reduce the region's dependence on costly imported crude and help stave off climate change.

Most of the goals in the pact are vague or voluntary, however. And unlike the European Union, which last week unveiled ambitious energy proposals to cut greenhouse gas emissions by at least 20 percent, the leaders of some of the most polluted countries on the planet offered no concrete targets.

New Zealand Prime Minister Helen Clark told Reuters in an interview the comparison was not entirely apt.

"This is very early days in the East Asia context, to be talking about targets," she said. The EU has commitments to cut emission under the Kyoto Protocol, while many of the East Asian countries have not signed up to the accord.

Heavy emphasis was put on promoting biofuels that use plantation crops such as sugar or palm oil as feed stock, not surprising since these are huge export commodities in Southeast Asia.

But there is no doubt about the magnitude of the problem facing these countries. Greenhouse gas emissions are expected to triple in Southeast Asia by 2030, while demand for energy will double during that period, according to ASEAN data.

FREE TRADE BLOC

The head of the Asian Development Bank (ADB), Haruhiko Kuroda, urged East Asian countries to create a vast trade bloc from India to New Zealand to pull 750 million of their three billion citizens out of dire poverty.

Officials at the summit said that while the idea is being studied, any such bloc is far into the future, if at all, and ASEAN's priority is to sign FTAs with individual countries represented at the summit.

"It's a big idea and I think the world needs big ideas in trade," Clark said.

With world trade talks stalled since July and time running out to revive them, countries around the Pacific rim have agreed or are trying to hammer out a "noodle bowl" of around 50 local FTAs.

Both Japanese Prime Minister Shinzo Abe and China's Premier Wen Jiabao are vying to influence ASEAN as it becomes a more integrated political and economic bloc.

Abe highlighted Tokyo's desire to play a more prominent security role in the region by agreeing to support Southeast Asian maritime security.

China and ASEAN agreed on Sunday to slash barriers on trade in services, which Wen said was a "crucial step" toward creating the world's most populous free trade area.

"With the ASEAN moving forward toward firm accords on its own charter, security, overseas workers and trade, the prospect for the region becoming a formidable bloc in the world is well within reach," said President Gloria Macapagal Arroyo of the Philippines, the host nation.

The leaders, who also endorsed a bird flu prevention "road map" that will share best practices, are anxious not to develop into a glorified chat room.

They wondered after last year's inaugural meeting if it was worth having another, Arroyo told a concluding news conference.

"What has made it successful going into the second year is that it was not just a talk shop. We were talking about concrete areas of cooperation and most specifically energy security."

(Additional reporting by Chris Buckley, Rosemarie Francisco and Manny Mogato)

Yudhoyono encourages farmers to increase paddy production

Gorontalo, Sulawesi (ANTARA News) - President Susilo Bambang Yudhoyono has encouraged farmers in paddy-producing provinces across the country to increase the paddy production.

"It is part of an effort to improve the people`s welfare through the increase of crop production, especially rice," President Yudhoyono said in a function to promote a national movement to increase national hybrid paddy production to 2 million tons this year at Pulubala village, Kota Tengah district, Gorontalo Province, northern Sulawesi, on Monday.

On the occasion the president was accompanied by First Lady Ani Yudhoyono, Home Affairs Minister Muhammad Ma`ruf, Agriculture Minister Anto Apriantono, and Gorontalo Governor Fadel Muhammad.

Yudhoyono noted that government`s effort to improve crop production was conducted through concrete actions.

"Therefore, government`s responsibility to step up the people`s food resilience through concrete actions is neither a mere discourse nor an empty rhetoric," Yudhoyono noted.

He added that besides food, water and energy were also in the government priority to manage them properly to meet the people`s demand, as the country?s population continued to increase.

The president noted that harvest improvement for the farmers was the only way to have self-supporting in rice and to avoid its import.

"In order not to be haunted with rice import, we are committed to taking concrete actions in our effort to step up rice production to 2 million tons this year," Yudhoyono said.

Thus, he expressed hope that paddy-producing provinces such as East Java, Central Java, West Java, South Sumatra and Gorontalo should also be responsible in supporting the government?s efforts to produce 2 million tons of rice this year.

"If we remain cohesive and united, God`s will, we will be able to reach the target," the president said.

Meanwhile, Agriculture Minister Anto Apriantono said the government was committed to realizing food self-sufficiency, especially rice, corn, soy bean and beef.

Genting BHd to invest US$3 bln in Indonesia biofuel

Kuala Lumpur (ANTARA News) - Genting Bhd plans to invest 3 bln usd to build a biofuel plant in Indonesia, the New Straits Times reported.

Citing sources, the report said the investment will be made through Genting Biofuels Asia Pte Ltd, incorporated in Singapore and wholly-owned by Gecoun Ltd.

It also said that a Genting official has confirmed that the group has entered into a cooperation agreement with a local government for the biofuel venture.

President dedicates projects worth Rp12.9 billion in Tomohon

Tomohon, North Sulawesi (ANTARA News) - President Susilo Bambang Yudhoyono symbolically dedicated five projects worth more than Rp12.9 billion in Tomohon, North Sulawesi province on Sunday.

The head of state was accompanied by Coordinating Minister for Economic Affairs Aburizal Bakrie and North Sulawesi Governor Sarundajang when dedicating the projects.

The function was attended by First Lady Ani Yudhoyono, Dutch Ambassador to Indonesia Nicolaus Van Dam, Agriculture Minister Anton Apriantono, Tomohon Mayor Jefferson Rumajar and Minahasa district head Vreeke Runtu.

Indonesia was still facing fundamental problems of poverty, unemployment and foreign debts, the president said, adding that in efforts to overcome poverty, the government has allocated a budget of Rp51 trillion to help poor families in 2007.

Thus, the head of state called on all layers of the people, including the governors, mayors and district heads, to make concerted efforts to deal with poverty and unemployment.

The president pointed out that the government would increase rice production by two million tons to 54 million tons through an agricultural revitalization program in 2007.

The projects dedicated by the president included a palm sugar factory in Tomohon with an investment of more than Rp8.6 billion employing 38 workers, and a TV5D television studio in the same town with an investment of Rp3 billion employing 51 people.

The other newly dedicated projects include a logistics depot in Pulau Miangas, Sangihe district, with an investment of more than Rp666 million, and a logistics depot in Pulau Marore, Talaud district with an investment of more than Rp663 million.

On the occasion, the head of state also led a ceremony marking the first export of 12.5 tons of palm sugar, and had a meeting with about 4,000 palm sugar farmers.

Two Women Die Of Bird Flu In Indonesia

Christian Nordqvist , Medical News Today

Article Date: 14 Jan 2007 - 0:00 PST

Authorities have confirmed that two women, aged 27 and 22, have died of bird flu H5N1 infection, bringing the total number of deaths in the country to 61 - four so far this year. One woman was from Jakarta, she died on Friday, the other, from a town west of Jakarta, died yesterday.

Indonesian authorities say another person has been admitted to hospital with bird flu like symptoms. This person had been slaughtering poultry.

On January 9th a 38-year-old woman from Tangerang, Banten Province, died of H5N1 bird flu.

Scientists fear the H5N1 bird flu virus strain, the most virulent one, will eventually mutate so that it spreads easily among humans. This has not yet happened. It is still a difficult illness for humans to catch from birds or other humans. The most likely way the virus might mutate would be to infect a human who has the normal flu. The bird flu virus could then exchange genetic information with the normal human flu virus and pick up its ability to spread easily from human-to-human.

Jakarta possibly sees drought not wet season, experts predict

Adianto P. Simamora, The Jakarta Post

JAKARTA (JP): Jakartans have to wait longer for the rainy season this year as experts signaled Saturday that drought instead of normal wet season might come around this month.

The Meteorological and Geophysics Agency (BMG) said the recent heat in Jakarta had reached 36 degree Celsius, far higher than normal of below 32 degree during rainy season.

"This is the first-ever record of such a high heat in January. If it stays through January, we might have severe dry season instead," Achmad Zakir, the agency's head for weather forecastingdivision told The Jakarta Post.

Achmad said that the rain was absent as most of cumulus nimbus clouds were currently trapped above the South China sea.

"To make it worse, the clouds are then swept by strong winds. Thus, the sun's heat down directly without being filtered by the clouds," he said.

The agency recorded the highest temperature in Jakarta was 37 degree Celsius in October last year. Achmad said that wind velocity during rainy period was normally between five to 10 knots.

"However, it currently rises up to 25 knots. Jakartans must be aware of the strong wind that can topple trees or vulnerablestructures," he said.

The agency earlier predicted that the peak rainy season in Jakarta was between January and February with the intensity of over five consecutive days.

Floods however, had hit a number of provinces.

Zadrach L. Dupe, meteorologist at the Institute of Technology Bandung said that the recent heat in Greater Jakarta was no longer in normal level.

"It is a strange trend. I suspect it is a sign of 10-year cycle of which Jakarta may suffer severe dry season such as in 1997's El Nino phenomenon," he said.

The El Nino stopped the rains from reaching the country. It caused serious harvest failures, forest fires and health hazard.

The devastating drought destroyed some 300,000 hectares of forests and the haze disrupted the lives of millions of people the Southeast Asia region.

"The government needs to analyze it to determine whether the heat is only micro change in Jakarta area or not," he said.

Zadrach said that the serious environmental degradation mainly due to high urbanization trend contributed much to the extreme heat in Jakarta.

Jakarta experiences large daily fluxes in population -- home to an estimated 10 million people at night, its numbers swell to 12 million in the daytime.

Most of its green zones have been converted to the commercial premises or been illegally settled by poor migrants.

Of it 60,000 hectares of land Jakarta currently has only 5,911 ha of green areas or 9 percent. The administration has pledged increase green spaces of 9,156 hectares, or 13.94 percent by 2010.

First finder of jetliner wreckage to get cash from VP

MAKASSAR (Antara): A fisherman Bakrie, 53, who found part of the right tail of the missing Adam Air jetliner in Mallusetasi waters, South Sulawesi would get cash of Rp 50 million (US$5,490) from VicePresident Jusuf Kalla for his finding.

Antara quoted Friday Commander of Makassar Air Base First Air Marshal Eddy Suyanto that he, on behalf of the Vice President, would give the money to Bakrie on Saturday.

Bakrie finding was very precious to the search activities of the missing jetliner as the search and rescue teams were previously clueless despite the deployment a number of high technology search vehicles.

Related Story: Fishermen find parts of jetliner

Flooding, landslide kills 11 in northeastern Indonesia

JAKARTA (AP): A landslide and flooding triggered by heavy rains barreled into a village in northeastern Indonesia on Friday, killing 11 people and leaving more than 20 others missing, officials said.

At least 64 houses and two churches were either swept away, buried or badly damaged in the disaster on remote Sangihe Island, said Johannes Mongkaren, a local government disaster relief official.

Mongkaren said 11 bodies had been recovered and that 21 people were still missing.

He said around 2,600 people had been evacuated and were sheltered in local schools.

Seasonal downpours cause dozens of landslides and flash floods each year in Indonesia, a vast chain of 17,000 islands, where millions of people live in mountainous areas or near fertile flood plains.

Flooding and landslides last month killed more than 100 people on Sumatra, the country's westernmost island. In June last year, more than 210 people were killed on Sulawesi island, to the east.Sangihe is around 2,640 kilometers northeast of Indonesia's capital, Jakarta.

President to promote national hybrid paddy

Gorontalo, Sulawesi (ANTARA News) - President Susilo Bambang Yudhoyono was scheduled to promote the product of national hybrid paddy in Gorongtalo province on January 15, local administration spokesman Irwan Halid said here on Friday.

He said the president on the occasion would be accompanied by a number of ministers, among others Agriculture Minister Anton Apriyanto, Home Affairs Minister Muhammad Ma`ruf and Gorontalo Governor Fadel Muhammad.

The president and his entourage would arrive in Gorontalo on January 15 after attending the 12th Association of Southeast Asian Nations (ASEAN) summit in Mactan, Cebu province in the Central Philippines.

"After the ASEAN summit in the Philippines, President Yudhoyono will directly head for Gorontalo to propagandize 2 million tons of hybrid paddy product," Irwan said.

Since it would be a national event, Irwan added that it would also be attended by a number of agronomists from all over the country.

Gorontalo was chosen to be the location of national hybrid paddy because the province has for several times received awards in national food resillience.

"In the central government judgement, Gorontalo is one of the provinces in Indonesia that has been successful in food improvement program," Irwan said.

He added that various preparations had been and were being made for the working visit of President Yudhoyono in Gorontalo.

Wiping Out of PPN May Boost Industry's Competitiveness

Thursday, 11 January, 2007 | 17:03 WIB

TEMPO Interactive, Jakarta: It is expected that the government's decision to wipe out the 10 percent value-added tax (PPN) on primary commodities in the domestic market will increase downstream industries such as cocoa and rubber.

Industry Minister Fahmi Idris has said that the wiping out of PPN may boost the competitiveness of downstream industries.

According to Fahmi, one of the weaknesses of national industries today is the difficulty in acquiring raw materials.

“Currently, we still have to import because of fiscal considerations and this causes a lack of competitiveness among downstream industries,” he said on Thursday (01/11).

He cited that it will be more competitive to buy raw materials from abroad than from the domestic market for chocolate products.

The reason for this was that domestic chocolate producers prefer exporting to supplying the domestic market.

“This because PPN is imposed on domestic trading whereas exporting is PPN free,” he said.

The policy to wipe out PPN, said Fahmi, was aimed at increasing downstream industries’ competitiveness as well as improving the quality of primary products.

The government previously imposed PPN of 10 percent on primary commodities that are traded on the domestic market.

The commodities included products from the agriculture, breeding, forestry, plantation, cultivation and fisheries sectors.

MUHAMAD FASABENI

Wilmar Energy to produce 1 million tons of biodiesel fuel

ika/iwa, The Jakarta Post - 2007-01-10 11:37

JAKARTA, January 09, 2007 (JP) - Wilmar Energy said Tuesday that its biodiesel fuel production would reach 1 million tons by the end of this year.

A senior executive of the firm said that the expected production would come from its factory in Dumai, Riau.

"This will become the world's largest biodiesel fuel production," he said.

Next month, Wilmar's biodiesel fuel production will reach 350,000 tons per year.(ika/iwa)

59 energy firms, institutions to invest $12.4b in biofuel

ika/iwa, The Jakarta Post - 2007-01-10 11:39

JAKARTA, January 09, 2007 - (JP): A total of 59 energy firms and institutions signed Tuesday Memorandum of Understandings (MoUs) as part of their commitments to invest US$12.4 billion in biofuel in Indonesia.

Among the firms that will invest in biofuel under the MoUs are CNOOC, Hong Kong Energy and Malaysia-based Genting Energy.

Bandung Institute of Technology (ITB), Bogor Institute of Agriculture (IPB), the Research and Development Division of the Ministry of Energy and Mineral Resources are also among the institutions that signed the MOUs.

CNOOC and Hong Kong Energy have commitments to invest $5.5 billion to develop biofuel in Indonesia, while Genting Energy are committed to invest $3 billion.

"This is part of our efforts to promote the use of alternative energy," Head of the Biofuel National Team Alhilal Hamdi said during the MoU signing ceremony.

Asides from the MoUs, banks are also expected to disburse Rp 25 trillion (US$2.7 billion) in loan to finance local farmers that help the biofuel projects. (Ika/Iwa)

Indonesian-Malaysian jv to build palm oil center in Maluku

Jakarta (ANTARA News/Asia Pulse) - PT Indomal Usahasama, a joint venture between Indonesian and Malaysian investors, says it plans to build a US$1 billion Palm Oil Center on the island of Mangole in North Maluku.

The center will include oil palm plantations, crude palm oil (CPO) processing plants, and palm oil-based bio-diesel plants, said Indomal president Chairul Anhar.

He said the company will build a 200,000 hectare oil palm plantation which it expects will produce 5 million fresh fruit bunches a year, along with 7 processing plants to produce CPO with an annual capacity of 120 tons an hour.

Indonesia, EU ready to discuss timber export licensing system

Jakarta (ANTARA News) - Indonesia and the European Union were ready to discuss timber export licensing system which was already set on the basis of Voluntarily Partnership Agreement, the Forestry Ministry said.

Forestry Minister MS Kaban and EU Commissioner on Environment Stravros Dimas and Commissioner on Development and Humanitarian Aid Louis Michel agreed the preparedness in Brussels on Monday, the ministry said in a statement made available to ANTARA News here Tuesday.

Indonesia and the EU also agreed that anticipating illegal logging and smuggling was not only the timber producing country`s responsibility but also of the importing states.

They also shared the view that illegal logging and smuggling were world phenomena which involved company and private trading and financial networks both in producing and importing countries.

Indonesia and the EU believed that the agreement could give a big contribution to anti-illegal logging drive and to sustainable timber trade. Therefore, they agreed that environmentally-friendly timber should be given a premium price.

In Monday`s meeting, the EU pledged to help find European market access for Indonesian timber.

The Voluntary Partnership Agreement is part of European Union`s Forest Law Enforcement, Governance and Trade (EU FLEGT) which is aimed to help deal with illegal logging through governmental system improvement in producing countries and to cut illegal logging consumption in Europe as well as to prevent European financial institutions from supporting illegal logging

PT PEN to absorb 1.2 million workers

Jakarta (ANTARA News) - If PT Pangan Energi Nusantara (PT PEN) the establishment of which has been proposed by the state enterprises ministry could operate as expected, at least 1.2 million people could be employed in farms and 41,000 others in other sectors in the 2007-2010 period.

"At least such a big number of workers that could be employed will lower the unemployment rate in the country," Hadi Mustofa, a media staff of the state enterprises ministry, said in a phone interview here on Tuesday.

In addition, through PT PEN the welfare of the farmers can be improved besides having an opportunity to have a share in the company of farmers-owned enterprises (BUMP) as long as they are members of BUMP which is also a partner and shareholder of PT PEN.

PT PEN will make Indonesia self-sufficient in rice and export its rice to other countries.

Being self-sufficient in rice and improve the welfare of the farmers whose fate remained unchanged in the more than 62 years of the country`s independence, the state entreprises ministry had the idea to synergize nine state owned companies which will become stakeholders of the future PT PEN.

Expected to be set up in the second quarter of this year, BUMP will act as motivator, State Entreprises Minister Sugiarto said in a visit to the country`s biggest rice mill in Jatisari village, Cikampek district, West Java, last week.

The nine state companies which will establish a consortium are the national logistics agency (Bulog), fertilizer-producing industries PT. Pusri, PT. Pupuk Kaltim, PT Petrokimia, and PT. Pupuk Kujang, irrigation companies PT. Jasa Tirta I and II, seed suppliers PT. Sang Hyang Sri and PT. Pertani.

PT PEN is to be set up to boost the productivity of the farmers, rice production and improve the farmers` buying power, with a view to conducting research, training, and purchase of the farmers` rice.

BUMP which happens to be a partner and shareholder of PT. PEN will provide advice to the farmers on funding, seeds, fertilizers and planting technigues as well as shareding in BUMP.

Following the establishment of the BUMP, a the result of a study by of the state enterprises ministry said that at least Rp48,48 trillion would be needed to establish 100 BUMPs throughout Indonesia until 2010.

As a beginning, at least 10 BUMPs will have to be established.

If the plan has been realized, Indonesia will not only become self-sufficient in rice, but will also produce sufficient rice in the future.