ESDM Denies Dispute with Industry Ministry
13 January 2014 19:00 WIB
TEMPO.CO, Jakarta - The Director of Development for Oil and Gas Downstream Business of the Energy and Mineral Resources Ministry, Mohammad Hidayat, denies the rumor that his ministry is at odds with the Industry Ministry, on the delay in the switch from fuel oil to gas. According to him, the Energy Ministry and the Industry Ministry have their own task in procuring converter kits based on Presidential Regulation Number 64. “In the conversion program, we are in charge of government vehicles, as well as ministries’, TNI’s and Polri’s. Meanwhile, the Industry Ministry is in charge of public transportation vehicles,” said Hidayat to Tempo yesterday.
He explained that the Energy Ministry completed the procurement of converter kits last year. About 2,000 free converter kits have been installed in government cars.
Hidayat stated that the Industry Ministry has not completed the converter kits procurement. He expects all institutions to soon realize the procurement program as mandated by the Presidential Regulation. “We have completed our task. We hope that other ministries will follow in order to make the gas conversion program successful,” he said.
Hidayat believes that the converter kits installation, realized by the Energy Ministry, is a method to socialize the program to the public. “We also hope that the public will follow,” he said. Hidayat added that the conversion from fuel oil to gas needs more effort to realize.
Last weekend, Finance Minister Chatib Basri said that the conversion program was delayed owing to misunderstandings between the Energy Ministry and the Industry Ministry. The problem was the converter kits production.
According to Chatib, the converter kits procurement should have been completed last year. The procurement was executed by the Energy Ministry. However, the tender was opened sometime in October or November. “If the tender was to be forced, the budget should be multi-year, which is risky,” Chatib said.
Chatib confirmed that the budget for converter kits procurement in 2012 had not been realized. For 2014, the budget has been set at Rp2 trillion (around USD166 billion), since the additional budget for energy conversion is around Rp5 trillion (around USD 416 billion). "That includes gas-filling stations (SPBG),” he said.
According to the former Chief of Investment Coordinating Board, conversion from fuel oil to gas is not a complex process. Chatib referred to Peru, where converter kits procurement did not cost the government any money. “Banks provided loans to converter manufacturers to give away converter kits for free,” he said.
The converter kits procurement has been stuck since 2012. Back then, the Finance Ministry suspended the budget since the program was unclear. In the 2012 State Budget, the Energy Ministry was allocated Rp964.3 billion to fund the conversion program--to procure 14,000 converter kits and to construct Compressed Natural Gas (CNG) infrastructures. Of the total fund, Rp1.8 trillion was allocated to CNG and Rp200 billion was channeled to converter kits procurement.
ANGGA SUKMA WIJAYA| ALI HIDAYAT | SETIAWAN ADIWIJAYA
