ENGLISH EDITION
The President Post T H E
S P I R I T
S G N I H T EP AN TO KYEE ON E 013 IN 2 Page
O F
I N D O N E S I A
January 2013 Vol. 2 No. 1 www.thepresidentpost.com
ENERGY
BUSINESS
The central feature of the new movement is the creation of a low carbon society within an economic system which strives for sustainability far into the future, when fossil fuels are no longer available and/or affordable as the basis of the economic system. – Page A6
State-owned oil and gas company PT Pertamina has predicted that petrochemical sales will increase by 500 thousand tonnes in domestic and regional markets in 2013. – Page B1
Low Carbon Society and Green Economy Lessons from Australia
IDR 20,000
2013
Pertamina Upbeat on Sales of 500,000 Tonnes
Upcoming Events
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State, Private Sector Join Forces To Provide Nation’s Power Needs www.antaranews.com
JAKARTA (TPP) – Contrary to recent media reports, Indonesia is on track in fulfilling its present and future energy needs in ways that would put foreign investors’ worries to rest.
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fast track program that was put in place two years ago – to build 93 power plants under the second 10,000megawatt (MW) power generation scheme – is nicely coming on stream. The power plants are expected to generate up to 10,153 MW in total. Of this figure, 5,770 MW or 57 percent will go into the Java-Bali grid with the rest going to the other islands. Of the total capacity, up to 1,204 MW (12 percent) will be generated by hydroelectric plants; 1,660 MW (16 percent) from gas combined-cycle plants; 3,977 MW (39 percent) from geothermal plants, and 3,312 MW (33 percent) from coal-fired plants. The biggest hydroelectric plant in the project will be the 4x250MW Upper Cisokan plant in West Java. The biggest gas combine-cycle plant will be the expanded Muara Tawar plant, also in West Java, with total capacity of 1,200 MW. The 1,000-MW Indramayu power plant in West Java will be the biggest of the coal-fired plants in this second phase, while the Sarulla 1 plant in North Sumatra, with expected
total capacity of 3x110 MW, will be the biggest of the geothermal power plants.
In December the Bosowa Group inaugurated its first power plant in South Sulawesi. The coal-fueled plant is valued at $250 million and features two 125-megawatt turbines. Located in Punagaya village in Jeneponto district, it will boost the electricity supply for South Sulawesi capital Makassar and surrounding areas. The inauguration was attended by Energy and Mineral Resources Minister Jero Wacik, former Vice President Jusuf Kalla and Chinese Ambassador to Indonesia Liu Jianchao.
Of the total 10,153 MW power expected to be generated from the project, state electricity company (PLN) is expected to generate a little more than half, or 5,118 MW. The remaining 5,035 MW is expected to come from plants run by independent power producers (IPPs). The power plants cost $15.96 billion in investment. Of the total 3,977 MW set to be generated by geothermal, IPPs are expected to contribute 3,097 MW. The second 10,000-MW project will include the construction of 3,490 kilometers of power transmission lines, requiring $383 million in investment, and is expected to be finished next year. In October the first unit of a coal-fired power plant (PLTU) with a production capacity of 660 megawatts (MW) was officially launched in Cirebon, West Java, and is expected to boost the electricity supply in Bali and Java. Earlier this year, PLN announced the electricity supply for Java and Bali was around
22,900 MW, while demand in the region was 35,000 MW or larger by 35 percent. The new 660 MW-plant is expected to supply 5,500 gigawatt-hour of electricity to Bali and Java per year or around 4 percent of the electricity supply in the region. CEP, an IPP, is a joint venture between four companies, with Japan-based Marubeni Corporation owning the biggest stake of 32.5 percent, followed by Korea Midland Power Co, which owns a 27.5 percent stake in the
firm. The other shareholders include South Korean company Samtan Co Ltd and Indonesia’s publicly listed PT Indika Energy, each own 20 percent.
the officials from the energy utilization directorate at the Energy and Mineral Resources Ministry as well as PLN over the planned second unit.
Indika Energy vice president director Wishnu Wardhana said the firm was mulling a plan to build a second unit for the Cirebon plant with a capacity of 1,000 MW, with a planned investment of around $1.2 billion to $1.3 billion. He said that currently the joint venture was still in talks with
Meanwhile, in December the Bosowa Group, a Makassarbased conglomerate with diversified business interests, inaugurated its first power plant in South Sulawesi. The coal-fueled plant is valued at $250 million and features two 125-megawatt turbines. Located in Punagaya village in Jeneponto district,
Vocational Education Affects Rise of Middle Class Indonesia, the world's fourth most populous nation, is experiencing a rapid expansion in the middle class. Indonesia recently became a leading exporter of coal and gas to China and India, and is also the largest exporter of palm oil, surpassing Malaysia in 2006. This new economic boom has allowed Indonesia to create a new, skilled, and powerful middle class that will allow Indonesia to rise to further international prominence. As the economy continues to grow at a fast rate, there has been an upsurge of purchasing power in Indonesia. In 2006, there were just over 6.6 million individuals who were earning over $10,000. By 2011, it increased to 13.7 million. It is predicted that this trend will continue, and by 2014 will stand at 150 million. Over the period of 2012-2020, consumer expenditure per household will likely grow by 39.2% in real terms whilst per household disposable income will increase by 40.5% in real terms. Euromonitor International forecasts Indonesia's real GDP growth rate at 6.1% year-onyear in 2012, above the expected real growth rates of some other emerging market economies such as Vietnam (5.6%), Russia
Industries with higher requirements tend to pay workers higher wages, both because there is a smaller labor supply capable of operating in those industries and because the required education and training carries significant costs. (2.8%) and Brazil (2.7%). Like many other Asian countries, the middle class in Indonesia is characterized not only by their purchasing power, but also their generally higher levels of skills and education. The education and training of a country's workers is a major factor in determining just how well the country's economy will do. The middle class labor pool in Indonesia is increasingly dominated by a younger generation; statistics show that 60.8% of individuals are aged below 35 years of age. Many members of the Indonesian middle class are educated at universities in the West. As a result, multi-national consumer goods companies entering the Indonesian market can capitalize on both the rising wealth and the high skills of the middle-class labor pool. Industries with higher requirements tend to pay workers higher wages, both because there is
a smaller labor supply capable of operating in those industries and because the required education and training carries significant costs. To meet the industry’s demand of skilled labor, Ministry of Manpower and Transmigration has specific internship program to Japan. In 2012, the ministry targeted as many as 2,500 participants who placed in approximately 700 companies that provide 60 types of professions. The priority for vocational internship programs are in the industrial, automotive, textiles, electrical, manufacturing, machinery, and buildings. Minister of Manpower and Transmigration Muhaimin Iskandar said that the internship program to Japan is one of the concrete step of the implementation of link and match concept that ensure the education and training are align with the needs of industries, as well as reducing
unemployment in Indonesia. Meanwhile, Directorate General of Higher Education (Dikti) initiated community college which provides vocational education with D1 (diploma) and D2 level in several scope of discipline based on local advantages to meet special needs. Minister of Education Muhammad Nuh said that community college graduates are ready to work according to the needs of the industry. Jababeka industrial estate, under the coordination of President University Education Foundation, also established Akademi Komunitas Presiden (AKP) in the Jababeka Education Park. Achmad Suryadi, Director of AKP, said that the establishment of AKP could be a pioneer for other similar communities. AKP is intended for students who take courses in Industrial Engineering which aims for safety, health and environment. Vocational education as well as apprenticeship program will increase the productivity and help companies reduce cost. However, research, innovation, and technology should continue to be developed.
it will boost the electricity supply for South Sulawesi capital Makassar and surrounding areas. “Makassar will become one of the best cities that can provide adequate supply of electricity and good infrastructure in the country,” said Erwin Aksa, president director of Bosowa Corporation, the holding company of the group. The inauguration was attended by Energy and Mineral Resources Minister Jero Wacik, for-
mer Vice President Jusuf Kalla and Chinese Ambassador to Indonesia Liu Jianchao. Erwin, who is also the president director of Bosowa Energy, said the plant will help state utility company PLN save Rp 4 trillion ($424 million) in fuel costs in the region. Bosowa plans to build a second power plant with two 125-MW turbines, costing around $300 million and to be located next to the group’s existing coal-fired plants in Jeneponto.
A Happy New Year, Jakarta! New Year’s Eve is one of the largest global celebrations around the world because it marks the last day of the year in the Gregorian calendar, December 31. Many people celebrate the end of the year with mixed emotions – joy and reflection – while anticipating for the New Year. In Indonesia, hundreds of thousands of people thronged along the traffic-free (carfree night) on the main road of Jakarta, the capital city. Commemoration of the 20122013 New Year's Eve is for the first time held in Jakarta by not allowing motor vehicles on the main streets of the city for seceral hours. The main avenues of Sudirman-Thamrin were closed to all vehicles from 06.00 pm Western Indonesia Time to 02.00 am on 1st January 2013. For along these roads the public was free to walk around and join in the special New Year fiesta. A Carnival featuring Jakarta’s own authentic ‘Betawi’ culture performed through the streets starting from the Jakarta City Hall and ending at the Hotel Indonesia roundabout where the countdown to 2013 took place.
With so many shows staged in Jakarta, there’s definitely something for everyone to celebrate the countdown to the New Year of 2013 in this magical metropolitan capital. Meanwhile, Jakarta’s largest recreational park by the beach, the Ancol Dreamland, also held a festive event to celebrate the end of the year, ringing in the New Year. For the New Year celebrations, the management of the park prepared a series of exhilarating shows including bursts of fireworks at three sites, a seaside mini theatre, contemporary wayang (Indonesian traditional puppets) performances, Jakarta’s Lenong Betawi, 100 street musicians’ performance, and huge musical stages were set up on Carnival Beach and Ocean Ecopark. Except for the main entrance fee to Ancol Dreamland, all shows were free of charge. A number of malls also staged special events to welcome New
Year 2013. At Gandaria City Mall, an exciting laser show and the Rave in the City music attraction dazzled audience while browsing through special discounts presented during the late night bazaar. At Sumarecon Mall Serpong, stunning musical fireworks claimed as the fifth largest in ASEAN were presented on the countdown along with performances of some famous DJs in the country. While at Mall Kelapa Gading 3, a unique performance of acrobats in a bubble was presented for the first time in Indonesia. Some of the finest hotels of the city also staged special shows for the occasion. The Aston Marina Hotel Ancol presented a special musical show featuring some of the finest singers of the country, among others are Krisdayanti, Vina Panduwinata, and Dira Sugandi, while at the Mercure Ancol, the rising popular rock band “Kotak” entertained the audience into the wee hours of the morning. With so many shows staged in Jakarta, there’s definitely something for everyone to celebrate the countdown to the New Year of 2013 in this magical metropolitan capital.