why we chose kalimantan-java-gas pipelines

8/14/2019 Why We Chose Kalimantan-Java-Gas Pipelines

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Eddy Satriya([email protected] , [email protected] )

Deputy Assistant for Infrastructure and Regional DevelopmentCoordinating Ministry For Economic Affairs, INDONESIA

2ND Asian Pipeline Conference and ExhibitionPipeline Infrastructure for Asias Growing Energy Needs

Hotel Istana, Kuala Lumpur, Malaysia, 21-22 November 2006
mailto:[email protected]:[email protected]:[email protected]:[email protected]


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Acceleration of economicgrowth will need higher investment ininfrastructure.

The expansion of theeconomy will raise thecommercial viability of infrastructure investment

Persistent Growth Acceleration

Economic Growth

2000-2003

3- 4 %

4 - 5 %6 %

> 7%

% Change in GDP

2004-2005 2006 2007 - 2009 2010 - beyond

6 - 7 %

Expected


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With a stable macro-economic environment andsufficient fiscal resources,

the cost of finance willcorrespondingly decline andlengthen the tenor or maturity of loan lengthens.

Inflation Rate

Macroeconomic Stability Has Been Achievedand Continued

Inflation Rate (%)

2005 2006 2007 07-09

17 %

7 %

3-4 %

6.5 %


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Budget deficit has come down considerablysince the crisis period and has recentlybeen contained at around 1 % of GDP.

Fiscal Consolidation on Track andCountry Risk on The Declining Path

Budget Deficit

Source : MoF 2006

2004 2005 2006

-1.3

- 0.9

-1.2

2007*

- 1.1

Budget Deficit (% 0f GDP)

0%

15%

30%

45%

60%

75%

2003 2004 2005 2006

Public Debt Ratio

Source: MoF, World Bank staff estimates

% of GDP Domestic

External

Public debt to GDP ratio has been falling fastfrom about 100% GDP in 1999 to below 40%of GDP by the end of 2006 and is likely tocontinue falling thereafter.


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31.835.0

43.7

0

10

20

30

40

50

2004 2005 2006*

The allocation for development spending as arough proxy public investment has since risennoticeably. Total public investment for all levelsof government in 2006 is expected to exceed 7%of GDP and about the same in 2007.

Government Commitment onCreating Fiscal Space For Infrastructure

Public Investment Infrastructure Expenditures

% of GDP Rp Trillions (in 2000 constant prices)

Total amount of such spending for all levels of government has increased from Rp. 35 trillion in2005 to Rp 44 trillion in 2006.

2.9

6.57.1

4.5

0

1

2

3

4

5

6

7

8

2000 2003 2005 2006

Source: BPS, MoF, World Bank staff estimates


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Investment Needs

Governments abilityhas been limited bybudgetary constraints.

Current economiccircumstances dictatethe need to resort toprivate sector participation

Infrastructure Annual Investment Needs 2005-2010

Source : World Bank 2006,

Average AnnualInvestment Needs

7 8 %of

GDPAverage Centraland LocalGovernmentBudgetAllocation

AnnualFunding Gap

(Filled byPrivate Sector)

4 5 %

OfGDP

3 %

Of GDP


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Reform Demands Democratization Decentralization Good Governance

Stages:

Initiation (1999) Installation Consolidation Stabilization(2007)

Performance is to be improved Various Understanding/Vision

Legislation process is poor

Improving Public Services

1. Transfer of Power/Governance (UU22/1999)

2. Transfer of Financial Authority (UU25/1999)

DESENTRALIZATION

New Laws UU No. 32/2004 UU No. 33/2004

Sumber: Satriya, 2005


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FACTS ABOUT KALIJA PROJECT

Part of ASEAN Integrated Gas Pipeline (Plan)Included in Master Plan of National

Transmission and Distribution of Natural GasNetwork;

The project was officially offered inInfrastructure Summit I, Jan 2005;Government /BPH Migas has already awardedcontract after Special Right open bidding

process (Jun 2006);But debate on Pipeline or Shipping orNone goes on;Whilethe country is starving for gas


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NATIONAL VIEWS

The need to shift from oil to otheralternatives;National budget is still supported by oil

and gas revenue, but huge subsidyparalyse other social sectors;President SBY declared that gas is for

domestic priority;Not to renew LNG contract which areexpire on 2009-2010 (Kompas , 25 March2006


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KALIJA PROJECT: Sui Generis

No clear decision on gas deliverability,less sense of urgency;This project is pioneeried firstly by PT.PGN;Protest from region (Bontang City andpart of East Kalimantan Province);

..but..Acute shortage for gas supply in Java andother region;

Regional Development and Industrialrelocation;Needed to increase nationalcompetitiveness;ThereforeThe ro ect is on its own =

Source: Satriya, Investor Daily, 15 Nov 2006


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Recent publications are available on www.geocities.com/satriyaeddy

eddysatriya.blogsome.com

kolom.pacific.net.id

Eddy Satriya 1989 :Graduated from Bandung Institute of Technology (Telecommunication Engineering)

1997 :Graduated from University of Connecticut(MA in Economics)

1989-90: Program Management Consultancy(PMC-IV) for Telecommunication Development

1990-2005: Working in Bappenas (The NationalDevelopment Planning Agency).

2005 (Dec)-present: Working in CoordinatingMinistry for Economics Affairs 1997- present: Visiting Lecturer in University of

Indonesia, University of Pelita Harapan, and ITB 2002-present : Actively writes various article and

column in national papers and magazines.

Contact: [email protected] [email protected]
http://www.geocities.com/satriyaeddyhttp://www.eddysatriya.blogspot.com/http://kolom.pacific.net.id/mailto:[email protected]:[email protected]:[email protected]:[email protected]://kolom.pacific.net.id/http://www.eddysatriya.blogspot.com/http://www.geocities.com/satriyaeddy


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THANK YOU &

GOOD LUCK IN YOU CAREER

why we chose kalimantan-java-gas pipelines

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