Government promises tax holiday for Bontang refinery project

By Godang Sitompul

Minister of Energy and Mineral Resources Sudirman Said stated that the government has decided to develop the planned Bontang refinery project in East Kalimantan through a public private partnership (PPP) scheme, promising a couple of incentives including a tax holiday of up to 15 years.

The government resorts to the PPP scheme due to the huge investment requirement of the project, estimated at around US$14 billion-$16 billion.

Sudirman said that the government has appointed state-owned oil and gas firm PT Pertamina to become the lead in the project. Pertamina will then select a strategic partner with the help of an international consultant.

Sudirman said that Pertamina is expected to be able to select the would-be partner in October of this year, in the hope that construction of the project can start next year.

Aside from the tax holiday, the government will also facilitate land use for the project as another form of incentive.

Meanwhile, Kontan reported that among of the foreign firms interested to invest in the project include JX Nippon Oil, and Saudi Arabian businessman Syekh Said Al Husaini.

Editing by Reiner Simanjuntak