Irian Jaya, Indonesia: Log-For-Road Deal
Copyright 2000, Gatra Magazine,
Number 40/VI
August 19, 2000
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.
-- Aries Kelana, Rita Triana Budiarti and Ronald Panggabean