A log-for-road deal
Source: Gatra 40/VI, August 19, 2000
Irian Jaya Province invites South Korean to build trans-Irian road.
Costs exchanged with logs.
Irian Jaya may be the most backward province in terms of development in
Indonesia. The province lags behind in not only human resources
development but also road infrastructures. Most of the local inhabitants
live in remote and spreading conditions in isolated areas. Because most
of the transport services are provided through air and waters, the
transport fees are very expensive. "We must build trans-Papua highway,"
Chairman of the Province's Development Planning Board Frans Robert
Kristantus said. Papua is an unofficial name of Irian Jaya popularized
by President Abdulrahman Wahid since the beginning of this year.
For the purpose, the Irian Jaya provincial government invited for South
Korean companies. They are Initiative Co. Ltd, Dong Ah Co Ltd, Tong Woo
Co Ltd and Chong Buk Co Ltd. Vice Governor of Irian Jaya Johannes Rudolf
Gerzon Djopari signed a memorandum of understanding with the investors
from the ginseng country in Jakarta, last Tuesday. The memorandum
mentions that the South Korean companies will build a trans-Irian road
as long as 11,280 km with a total investment of US$1.7 billion or Rp
14.11 trillion. The road will include road sections of Jayapura - Nabire
as long as 585 km and Sorong � Nabire. The government will spend no
money on the project. As compensation, the investors are entitled to
logs from trees felled around the project site. "There is not yet
calculation whether the value of the logs commensurate with their
investors," Frans Robert Kristantus told Erwin G. Tambunan from GATRA.
The price of logs per cubic meter will be discussed with the province's
Forestry Service.
Trees located around five kilometers from both sides of the road to be
built will also be felled. In the case of the value of the logs being
inadequate to the investment, the South Korean consortium will offset
the shortage, Djopari said. Apart from that, the investors will also
obtain a concession for managing plantation and forestry projects with
the effective period of concession to be determined later. The
construction works will commence in January 2001. "The project is
expected to complete for ten years,"he went on. Djopari expects, the
road to be built can overcome isolation problems in Irian Jaya. The lack
of land transport inflates prices of daily basic necessities in the
province. Wamena inhabitants, for example, must spend hundreds of
thousands of rupiah to buy a bag of cement, whereas the product is sold
at a price of Rp 27,000 per bag in Jayapura.
The central government once built part of the trans-Irian road section.
The development of Jayapura-Wamena road even costed above Rp 200
billion, but the road could not yet been passed by public cars. Several
sections of the road are full of holes and become muddy pools if rain
falls. To complete the project, the provincial administration finally
invited South Korean consortium. It is not a simple task to build the
trans-Irian road. Bridges, which must be built to connect road sections,
are around 500, with the length ranging from less than ten meters to
hundreds of meters. Workers of the South Korean companies have to
breakthrough forests, walk along the Baliem valley and prepare
themselves from sting of malaria mosquito. According to Risman
Simanjuntak, Project Manager of Irian Jaya Road Development, additional
funds needed for completing the road is not less than Rp 1 trillion. "It
is quite reasonable, if South Korean investors ask for a concession,"
Risman said.
The development of the trans-Irian road has been discussed since
December 1999 when South Korean and Japanese
businessmen came to see the province. They submitted proposals for the
building of the road to the local administration. After examining the
proposals, the provincial legislative council (DPRD) finally decided to
be in favor of the proposal from South Korea. The investors prefer to be
paid by forest products, instead of money. South Korean businessmen came
again to the province last July to discuss details of draft memorandum
of understanding. The local legislative council raised no objections.
"We also accept because the local administration has no money to tender
the project," said Marthen Manrey, a member of Irian Jaya Legislative
Council's Commission B. Yet, he got shocked while learning that the
local administration already signed a
memorandum of understanding, because many aspects still need to be
discussed with the council. They include profit or loss of sales of
forest products to the South Korean investors. He worried that the deal
inflicts losses on certain parties on one side, but it also produces
unreasonable profits to other parties.
Lukas Karl Degey, Deputy Chairman of the Indonesian Democratic Party
Faction in the House of Representatives, fell no worry about the deal.
According to "the Cendrawasih Region Bull", the South Korean companies
have good reputation in the building of road as long as 60 km in that
country in 1997. "The road has remained in a good condition," he went
on. Lukas also raised no objections for the felling of trees in Irian
Jaya. He even considered it as a kind of incentive so that the investors
want to invest their capital. Yet, he called on the local administration
to discuss it first with tribal communities having traditional rights,
so that they can understand the benefit of the project. Yet, Deputy
Director of the Environmental Conservation Institute
Suwiryo Ismail viewed that the memorandum of understanding has potential
to damage. "We can't supervise, while the South Korean people are free
to destroy everything," he said. Suwiryo also expects the mega project
to be announced to the public first because it brings about implications
to communities and the environment. Moreover, many trees will be felled
to finance the development of the project. Suwiryo worries that the road
and road sides will pass through conservation areas and protected
forest.
[EMAIL PROTECTED] wrote:
>
> I have been sent this comment about a Korean 'logs-for-roads' deal. Does anyone
> know anything additional? Perhaps it has been in the Indonesian press?
>
> "The memorandum mentions that the South Korean companies will build a
> trans-Irian road as long as 11,280 km (impossible??!) with a total investment of
> US$1.7 billion or Rp 14.11 trillion. The road will include road sections of
> Jayapura - Nabire as long as 585 km and Sorong - Nabire. The government will
> spend no money on the project. As compensation, the investors are entitled to
> take logs from trees felled 5 km either side of the routes. "
>
> __________________________________________________________
> Tony Whitten
> Senior Biodiversity Specialist
> Environment and Social Development Sector
> East Asia and Pacific Region
> The World Bank
> 1818 H St NW, Washington DC, 20433, USA
> fax: +1-202-522-1666
> www.worldbank.org/biodiversity
>
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--
Ed Colijn
[EMAIL PROTECTED]
The Indonesian Nature Conservation Database
http://www.bart.nl/~edcolijn/
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