Tuesday, November 28, 2006

Counting the losses

As thousands of displaced people (due to hot mudflow from gas field operated by Lapindo Brantas Inc) went on protest yesterday for months of gross neglience over the promised compensation and 12 people killed in a gas pipeline burst in the area covered by Lapindo mud, we're increasingly bussy in counting the losses and yet we have no idea who will pay. Why don't establish an escrow account, funded by Bakrie (if that's the commitment) with tight independent supervision to underwrite the costs?

Some was cynical when Greenomics claimed the cost incurred of hot mudflow could be billions of US dollars calling the NGO of exagerating. Government then put the estimated cost of US$150 million till March 2007. This magic number is being used by Lapindo-related parties as the total liabilities in their hands over the disaster.
But look at the claims so far. PT Jasa Marga, the state-owned turnpike operator, stated today that the cost to build a new toll road in the area would be Rp1.5 trillion and no way the company would finance that. "Lapindo should bear the cost," said Frans Sutikno, CEO of Jasa Marga.
I'm afraid the state-owned railway operator PT Kereta Api Indonesia would spend billions of rupiah to re-route the track. And the residents who lost their land claimed compensation of Rp1 million/square meter. Millions of toll road users have been suffered huge mental problems and economic losses due to the closure of the turnpike.
Millions of cubic metres of hot mud has spewed from the site, flooding over 400 hectares, swallowing eight entire villages, hectares of rice paddy fields and numerous factories in East Java, and displacing more than 10,000 people.
The gas pipeline burst is apparently the worst so far, killing 12 innocent people and injured 16 others.
As reported by Tempointeraktif.com, state-owned gas distribution company PT PGN Tbk recorded billions of rupiah of losses in the last few days. At least 244 companies, 74 hotels, and 1,090 households got no gas supply due to the explosion.
Paper manufacturer PT Kertas Leces, a state-owned company, reported Rp500 million losses in two days only. Industrial gases producer PT Samator had to stop its hydrogen, hydrogen peroxide, and carbondioxide facilities with billions of rupiah of losses. Who will pay all of these? Can we just separate the pipeline burst from the mudflow? When would all of these going to end or an endless mess? Is it possible that the worst is yet to come?
On the other end, PT Energi Mega Persada (the parent company of Lapindo Brantas Inc) filed bad and good news late last week. The first, bad one, due to the pipeline burst, Energi had shutdown gas production in Kangean Block. The second, the same day of the explosion, EMP Kangean which operates the block, had successfully started oil production in Sepanjang Islands at the volume of 9,000 barrel per day (generating cash of USD450,000/day). These evenly announcements have resulted in stable price of Energi shares at Rp500. What an odd world we livin! When many people could only count losses, small number of people still manage to calculate the benefits!

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