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REAL SECTOR

TRANSPORTATION MINISTER ASKS AIRLINES TO OFFER AFFORDABLE FLIGHT FARES

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Minister of Transportation, Budi Karya Sumadi.

Greatindonesia.co.id, Jakarta – Minister of Transportation Budi Karya Sumadi has called on airlines to offer domestic flights at more affordable prices to the public.

“We urge airline companies to offer more reasonable tariffs (for domestic flights) to the public,” Sumadi told reporters in Jakarta on Thursday (30/5/2019).

The Ministry of Transportation has lowered the tariffs for flight ticket prices to between 12 percent and 16 percent, and a 12 percent drop to be made on busiest routes, including those in the Java region, whereas other tariff reductions were made for flights on routes, including to Jayapura.

The decision was made following a coordination meeting by the Economic Coordination Ministry that agreed to change the upper limit tariff (TBA) that assigned the Ministry of Transportation to amend KM 72 of 2019 on the Upper Limit Tariff of Economy Class Domestic Passenger Air Transportation Services.

Amendment to the decree was stipulated in Transportation Minister’s Decree No. 106 of 2019 concerning the Upper Limit Tariff of Economy Class Domestic Passenger Commercial Air Transportation Service Passengers.

This new decision will be reviewed in a three-monthly period and at any time in the event of major changes that affect the sustainability of the activities of the air transport business entity.

Director General of Civil Aviation of the Ministry of Transportation Polana Banguningsih Pramesti remarked that the reduction by 12-16 percent in TBA continued to prioritize major factors, including security and flight accuracy (On-Time Performance).

He explained that the cost component contributing to the reduction in TBA arose from the operational effectiveness of aircraft at the airport to ensure fuel efficiency and also optimize efficiency of aircraft operating hours. (ant)

REAL SECTOR

MINISTRY OF FINANCE ENCOURAGES GEOTHERMAL ENERGY EXPLORATION

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Director General of State Wealth, Isa Rachmatarwata.

Greatindonesia.co.id, Jakarta – The Ministry of Finance is encouraging exploration and investment in the geothermal energy sector by preparing risk mitigation through the Government Drilling program.

“This program assists the government in new well exploration which is currently considered costly and risky,” Director General of State Wealth Isa Rachmatarwata said in a discussion in Jakarta, Wednesday. Investing in the country’s geothermal energy is still a stumbling block since the private sector is reluctant to take a risk in exploring power sources, Isa noted.

Keeping that in mind, the government has formulated the so-called Government Drilling program aimed at mitigating risks in each exploration activity, he said.

This program involves three Special Mission Vehicles (SPV) of the Finance Ministry, namely PT Sarana Multi Infrastruktur, PT Geo Dipa Energi, and PT Penjaminan Infrastruktur Indonesia (PII).

The three public service bodies make applicative approaches and adopt industrial governance in finding geothermal energy sources. The measures include planning and budgeting, procurement, operation and execution.

After the energy sources are discovered, they can be offered to investors interested in developing geothermal energy, he said.

“When a well is found and is economically sufficient to generate electricity, it will be offered to parties that are willing to conduct explorations,” he said.

He expressed the hope that the risk of geothermal energy exploration, which is currently considered costly and less attractive to investors, could be reduced.

“This does not mean that private companies are not allowed to find energy sources. They can do it but their numbers are not large if not zero. Therefore, the government is willing to take the initiative to ensure that investment does not run slowly,” he said. (sty)

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REAL SECTOR

COCOA INDUSTRY CONTRIBUTES US$1.13 BILLION TO FOREIGN EXCHANGE

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Indonesia is currently the third-largest producer of processed cocoa in the world after the Netherlands and Ivory Coast.

Greatindonesia.co.id, Jakarta – The majority of Indonesian-processed cocoa products were exported and contributed US$1.13 billion in foreign exchange in 2018.

Indonesia exported 85 percent of its total production of cocoa or 328,329 tons, last year and marketed the rest totaling 58,341 tons of cocoa domestically. The cocoa processing industry is one of the prioritized sectors, according to the 2015-2035 National Industrial Development Master Plan (RIPIN), the government has stated.

“Moreover, the cocoa processing industry is also part of the food and beverage industry which is a mainstay of the Making Indonesia 4.0 roadmap. This sector involves a lot of small and medium industries,” Industry Minister Airlangga Hartarto said in a statement Tuesday (17/9/2019).

The development of the national downstream processing industry is directed to produce cocoa or cocoa powder, cocoa fat or cocoa, chocolate food and beverages, supplements, cocoa-based functional foods, as well as cosmetics and pharmaceuticals, the minister emphasized.

Indonesia is currently the third-largest producer of processed cocoa in the world after the Netherlands and Ivory Coast.

The national cocoa processing industry has produced cocoa liquor, cocoa butter, cocoa cake, and cocoa powder.

“As one of the countries producing cocoa beans, Indonesia already has 20 companies processing cocoa. We continue to encourage increased utilization, while also spurring the productivity of domestic cocoa beans to maintain the supply of raw materials,” Hartarto noted.

Based on the data of the International Cocoa Organization (ICCO), Indonesia ranks sixth among the producers of cocoa beans in the world after Ivory Coast, Ghana, Ecuador, Nigeria and Cameroon with production volumes reaching 220,000 tons in 2018.

“To develop the cocoa processing industry and increase its added value, the government encourages the development of the downstream cocoa industry, which is cocoa and chocolate-based food,” Hartarto said.

One of the measures is to support the promotion of Indonesian processed cocoa and chocolate products to increase domestic consumption.

Furthermore, the cocoa processing industry is expected to continue to grow and develop, because its products have become part of the current lifestyle. (spg)

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FINANCE

INDONESIA’S STOCK, BONDS MARKET ATTRACTIVE : INVESTMENT STRATEGIST

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Amidst the current low interest rates, Indonesian bonds are very attractive because they still provide high yields.

Greatindonesia.co.id, Jakarta – The Indonesian stock and bond market remains an attractive option amid the global economic turmoil, an investment strategist at an asset management corporation in Indonesia believes.

“The stock market still provides attractive investment opportunities because of its valuation. There is also the potential growth of the corporation’s profit which is estimated to be around nine percent this year,” the Chief Economist and Investment Strategist Manulife Asset Management Indonesia, Katarina Setiawan, said in a statement received here, Monday (16/9/2019).

Going forward, there are several catalysts for the stock market, including further interest rate cuts by Bank Indonesia, accelerated policy reforms by the government, improved data on economic activity, and corporate tax cuts, she stated.

Amidst the current low interest rates, Indonesian bonds are very attractive because they still provide high yields.

“The central bank’s commitment to safeguarding the Rupiah exchange rate and the bond market provides a positive sentiment for Indonesian bonds,” she said.

Turmoil and volatility in the financial markets are not uncommon, she said advising investors to always keep an eye on every development.

“Keep in mind that there are always opportunities in every condition, even amidst high global volatility. Do not be afraid to invest and adjust your investment portfolio, with targeted investment objectives and time frames,” she said. (INE). (cta)

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