Light participation

Fish traders at Kramat Jati market in East Jakarta kept their lights on during the Earth Hour campaign, on Saturday evening when people were supposed to turn off their lights, although many were unaware of this. Many night workers had to keep their lights on between 8:30 p.m. and 9:30 p.m.

Officials: Suicide bombs kill 35 on Moscow subway

Two female suicide bombers blew themselves up on Moscow's subway system as it was jam-packed with rush-hour passengers Monday, killing at least 35 people and wounding more than 30, the city's mayor and other officials said.

Emergency Ministry pokeswoman Svetlana Chumikova said 23 people were killed at the Lubyanka station in central Moscow. The station is underneath the building that houses the main offices of the Federal Security Service, or FSB, the KGB's main successor agency.

A second explosion hit the Park Kultury station about 45 minutes later. Chumikova said at least 12 were dead there.

Moscow Mayor Yuri Luzhkov said both explosions were believed to have been set off by female suicide bombers as the trains entered the stations. In the first case, officials said the explosion was on the train; there was no immediate information on the location of the second blast.

"The first data that the FSB has given us is that there were two female suicide bombers," Luzhkov told reporters at the Park Kultury site.

Russia's top investigative body also said terrorism was suspected.

The last confirmed terrorist attack in Moscow was in August 2004, when a suicide bomber blew herself up outside a city subway station, killing 10 people.

Responsibility for that blast was claimed by Chechen rebels and suspicion in Monday's explosions is likely to focus on them and other separatist groups in the restive North Caucasus region.

The Moscow subway system is one of the world's busiest, carrying around 7 million passengers on an average workday, and is a key element in running the sprawling and traffic-choked city.

The blasts practically paralyzed movement in the city center as emergency vehicles sped to the stations. Helicopters hovered over the Park Kultury station area, which is near the renowned Gorky Park.

Passengers, many of them in tears, streamed out of the station, one man exclaiming over and over "This is how we live!"

At least a dozen ambulances were on the scene.

KPK questions BI deputy governor Budi Mulya in Century case

The Corruption Eradication Commission [KPK] questioned deputy governor of Bank Indonesia Budi Mulya Monday about his possible involvement in the Bank Century bailout case.

“It’s a continuing investigation following a previous probe of [another] BI deputy governor Pak Budi Rochadi [some time ago],” KPK spokesman Johan Budi said as quoted by kompas.com.

Budi Mulya was being questioned in relation to BI's Rp 689 billion (US$75.1 million) liquidity assistance to the ailing Bank Century in 2008.

The antigraft body is focusing its investigations on graft that allegedly occurred in Bank Century's handling of the BI liquidity assistance and the Rp 6.76 trillion (US$716 million) bailout, and the subsequent channeling of funds.

Bakrieland to build Disneyland in Sukabumi

PT Bakrieland Development is planning to expand its entertainment and recreational properties by building a Disneyland park, following the development of its Jungle Water Park at the Lido tourism spot in Sukabumi, West Java.

The American-based Disneyland project plan is in line with Bakrie’s 54-kilometer toll road project that will connect Ciawi and Sukabumi, kompas.com reported Monday

Bakrieland president director Hiramsyah S. Thaib, however, declined to elaborate on the proposed Disneyland project.

Analysis: The ‘drivers’ that make drivers choose new cars in Indonesia

Like many cities around the world, traffic on the road is a nightmare in Jakarta except perhaps between 2 a.m. and 6 a.m. Other metros like Surabaya and Bandung aren’t far behind. Whether its good news or bad, the fact remains that only 3.5 percent of Indonesian households can afford to maintain the family car. Another 31 percent have opted for the family motorcycle. There are three million car drivers, not including taxi bus or truck drivers. In contrast, there are 45 million motorcycle riders. Many of them would like a car instead, which would strangulate the city and cause rigour-mortis to set in. Any hope of a real mass transit system seems remote, to be believed only when it is real. So Jakartans still have some room to crawl in, what little there is left.

In the meantime, the car industry is still crawling on the road to recovery. The elite group of car buyers were among the small fraction of Indonesian society affected or concerned by the global financial crisis. Demand is yet to go back to levels similar to the days leading up to the fuel price hikes. As at December 2009, there were 1.54 million people thinking of buying a car in the next four years. 1.29 million of them were considering a used vehicle, leaving only 298,000 in the market for a new car.

That’s cars for consumers, not including commercial, government, military or police fleet purchases.

In a world where the capacity to supply is far in excess of current demand, carmakers from around the world are flocking to Indonesia. From Ferrari and Porsche to Renault and Citroen, they are all now here for a piece of the action. The multi-billion rupiah question is whether they all know what the Indonesian aspiring to buy a new car really wants today. Roy Morgan Single Source has quite a few answers for anybody who is interested. Twenty seven percent of people thinking of a new car want a four-door station wagon, which definition in Indonesia of course includes the trusty Kijang. 25 percent want a five-door hatchback and 13 percent a three-door version.

But there’s a remarkable 12-percent who desire a coupe, sports or two-door convertible. That translates to roughly 36,000 units of big boys’ toys. Back to reality, another 9 percent are keen on a people mover or van. Almost 5 percent are thinking pick-up, just 4 percent the classic four-door sedan. The original SUV will be considered by only 1.4 percent of new car buyers. That just about wraps up who wants what. Except of course, the brands. Today, Honda leads with 26 percent share of the ‘future market’, closely followed by Toyota with 25. Way behind them is Mitsubishi with 7 percent.

Suzuki, Mazda, Daihatsu and Nissan seem to have lost their shine, falling behind the more prestige names like Jaguar, Mercedes-Benz and BMW.

Then there’s the other set of multi-billion rupiah questions, why they want what what they want. While pleasure seekers have different wants from the needs of the family man, the opinions of all new car intenders in Indonesia produce an interesting diversity of expectations. Reputation still leads.

Eighty six percent “will only buy a car with a proven track record”. The same number “need lots of space and seating flexibility in a vehicle”. That’s followed by 82 percent with “ a long warranty is essential to me when buying my new car”. Not surprisingly, 82 percent believe “when I’m making a major purchase I tend to rely on facts and figures rather than gut feel”.

Many women are likely to smirk at this attempt at rationalizing bad choices based on looks alone. Marketers however must acknowledge that well-worn phrase, perception is reality. Fact or fiction, many buyers need the assurance of logic before they are willing to acknowledge falling prey to magic.

Cognitive dissonance or post-purchase rationalization aside, the fact remains that “after reliability, looks and style are most important to me” is a view shared by 73 percent of intenders.

“Safety is my number one concern” believes eight out of 10 buyers, with almost as many agreeing that “performance and road-holding are my number one concern”. Seventy eight percent “want a car that has all the extras as standard” while 74 percent “spend a lot of time researching my options before deciding what car to buy”. How many of these concerns are known and addressed by automakers operating in Indonesia, one wonders. There is little evidence or acknowledgement of these needs and wants in the advertising that we see.

These conclusions are based on Roy Morgan Single Source, a syndicated survey with over 25,000 Indonesians 14 years and older interviewed each year. The national database, comprising interviews conducted in the cities, towns and villages around the country is updated every quarter.

Gas shortage costs PLN up to Rp 2.4 trillion

State power firm PT PLN must carry operating costs which are Rp 2.4 trillion (US$263 million) higher than planned this year due to gas shortages affecting its Muara Tawar power plant at Bekasi, West Java.

PLN’s primary energy director Nur Pamudji said less gas supply means more oil fuel consumption.
“We must increase the power plant’s oil-based consumption by 618,000 kiloliters until the end of this year and this will cost us additional spending of Rp 2.4 trillion,” Nur Pamudji said.

PLN’s head of corporate finance division Yusuf Hamdani said the production cost of electricity generated from oil-based fuels was far higher than that generated from gas.

“In 2009, the average production cost for gas was Rp 318 per kWh [kilowatt hour], while the production cost for oil-based fuel was Rp 1,383 per kWh,”Yusuf said.

The combined cycle Muara Tawar power plant can use both diesel oil and gas. The plant receives gas from state gas distributor PT Perusahaan Gas Negara (PGN).

PGN and PLN have signed two gas sales and purchase contracts for the power plant. Under the first contract, PGN must supply as much as 200 billion British thermal units of gas per day (BBTUD) to PLN until 2012. As for the second contract, PGN has to supply 100 BBTUD to PLN for the same period. But the second contract is interruptible, meaning PGN will only supply PLN when additional gas is available.

Nur Pamudji said the gas supply had dropped to 100 BBTUD since early March, this year from an average of 250 BBTUD in 2009. “I thought the shortage was only temporary, but later on it became clear that the shortage could last until December,” Nur Pamudji said.

The Muara Tawar power plant comprises four operating units. “Currently, only one unit still receives gas,” Nur Pamudji said.

PGN’s gas supply to PLN and other industries fell this year due to a decline in the gas supply from ConocoPhillips’s South Sumatra field, PGN’s president director Hendi Prio Santoso said as quoted by Bloomberg last week.

Gas contributes 26 percent to PLN’s total energy consumption. Coal and oil-based fuels contribute 45 percent and 19 percent, respectively. The remaining 10 percent is from new and renewable energy sources such as hydro and geothermal.

PLN’s coal consumption has increased as some of the power plants planned and financed under the
first phase of the first 10,000 megawatt (MW) electricity crash program have started to come into operation.

All power plants under the first 10,000 MW project are coal-fired power plants. Nur Pamudji said PLN coal consumption reached 30 million tons this year, up from 22 million tons in 2009. However PLN coal consumption to feed an increased number of coal-fired power stations coming on stream is estimated to increase to 38 million tons in 2011.

RI, HK agree to eliminate double taxation, tax evasion

Indonesia and Hong Kong signed a bilateral agreement Tuesday on the avoidance of double taxation and the prevention of tax evasion in the hope of enhancing mutual business opportunities.

The agreement will eliminate double taxation issues encountered by Hong Kong and Indonesian businesses, and bring lower tax rates to cross-border economic activities.

It was signed by Hong Kong Financial Secretary John C. Tsang and Indonesian Finance Minister Sri
Mulyani Indrawati.

“This would help in doing business in Hong Kong and Indonesia. It provides certainty for businesses.

They will pay less tax than they are now. So we expect this would facilitate and enhance business opportunities,” Tsang said in an interview with The Jakarta Post.

He said Hong Kong and Indonesia should foster closer business cooperation after the recent global financial crisis. He said trade in Asia should be expanded to compensate for the decline in exports to the US and EU countries.

“We can do more things together, particularly as our traditional markets — the US and EU countries — are importing less. So I think we need to expand our own regional market to compensate for exports we have lost in traditional markets,” he said.

Under the agreement, he said, Hong Kong and Indonesian businesses will have their taxes more than halved.

Tax income on dividends which now stand at 20 percent, will be cut to 10 percent; and for a shareholder owning at least a 25 percent share in a company, tax will be further reduced to 5 percent.

Tax on royalties, which now stand at 20 percent, will be capped at 5 percent.

The Indonesian directorate general of taxation said it would pursue similar tax agreements with other countries to pursue tax evaders.

“We’re negotiating with Serbia and Oman. We’re renegotiating with Malaysia and some European countries. What’s important is information exchange. We can ask information now,” said Syarifuddin Alsah, director of tax regulations.

On Tuesday, Tsang also met the central bank to discuss cross-border banking supervision and
development of Islamic finance, which he said was an “ethical investment tool”.

“We see a lot of potential for Islamic finance as an alternative investment. Not only for Muslims, but for everyone,” he said.

Tsang said on Wednesday he would meet the Coordinating Economic Minister Hatta Rajasa, Trade Minister Mari Elka Pangestu and Fuad Rahmany, head of the Capital Market and Financial Institutions Supervisory Agency, to discuss various issues.

He also explained that Hong Kong would become a platform for the internationalization of the Chinese currency the renminbi to become one of the world’s convertible currencies, which would change the dynamics of the world currency system.

“Now the US dollar is the main reserve currency, the main currency for business in the world for
most transactions. But as the economy of China grows, as the business involving Chinese entities grows in the future, then the renminbi will become a more important currency,” he said.

“When it becomes a convertible currency, a significant and international currency, certainly the dynamic of it, and also of the US dollar, and the euro, will surely change. But we have to look at the geopolitics at that time. So we can see how things will change,” he added.