Govt vows to allocate greater portion of coal royalty to regions

Minister of Mines and Energy Susilo Bamang Yudhoyono said on Monday that his office would provide regions with a much greater portion of the 13.5 percent coal royalty.

Susilo said that to realize the plans, he would coordinate with the Minister of Finance Bambang Sudibyo.

"We are now studying the various recommendations on the use of the coal royalty particularly for the development of the national coal (sector) including to increase significantly the portion for the regions," Susilo told reporters on the sidelines of a meeting with senior economic ministers.

"Basically, the spirit now is that we want to use it (the royalty) more effectively and different from it used to be in the past," he added.

The 13.5 percent coal royalty paid by coal mining companies has become a controversy lately after a legislator alleged the Ministry of Mines and Energy of using the funds to purchase a property building in the Kuningan prime area in Jakarta, and cars.

According to a government ruling, the funds are supposed to be only used for coal-related development. The funds are being paid by coal mining companies to the central government via the Ministry of Finance.

Provinces have also complained that they have never received their portion of the royalty in full and often transferred by the central government belatedly.

East Kalimantan Governor Sjachriel Darham, for instance, has called on the central government to provide a greater portion of the royalty to the province. He said that 80 percent of the royalty funds should be allocated for the province.

He said that the province has so far only received 2 percent of the royalty, which is a very small amount for the development of the local coal sector. (*)