State to help finance Palapa Ring project in 2010

12 Nov 2009

A senior official within Indonesia’s Communications and Information Ministry yesterday confirmed the government has every intention of helping to fund the country’s Palapa Ring ‘mega-project’ starting in 2010. Antara News quotes the ministry’s secretary general, Basuki Yusuf Iskandar, as saying: ‘We will not add to the burdens of the telecommunications industry because we will use our share in the State Budget [to help finance the Palapa Ring project].’ He went on to say the ministry plans to use the budget allocation for its Universal Service Obligation (USO), which amounts to an annual budget of around IDR1.2 trillion (USD128 million). The government of Indonesia is mindful of the need to redress shortfalls in the country’s telecoms infrastructure given that existing coverage and projects are only designed to integrate the western parts of the country. ‘There is no backbone in Eastern Indonesia, and this is the gap. Our main priority in the days ahead will be building telecoms infrastructure in East Indonesia and we intend to do it together with the industry,’ Basuki Yusuf Iskandar said. The Palapa Ring Project is faltering because some of the original members of the consortium of private telecom operators set up to implement it have pulled out. Originally six operators formed the core of the group, but now only three remain – PT Telkom, PT Indosat, and PT Bakrie Telecom – and as a result, the funds required to finance the project have shrunk to around USD150 million, he said.