HSU district says coal royalty split with Jakarta unfair

Saturday, May 19 2001 - 04:00 AM WIB

The coal royalty split between Jakarta and coal producing regions is unfair because the central government obtains a much greater share, according to a top legislator of the Hulu Sungai Utara (HSU) district Council in South Kalimantan.

Head of the Council commission D on mining Morhan was quoted as saying by the local Banjarmasin Post daily: "So far, the coal royalty split has benefited more the central government, while the negative impact from the coal mining is being felt by the local government."

Morhan said that HSU district was one of the largest coal producing regions in the province with huge coal mining companies such as PT Adaro Indonesia and PT Bentala Coal Mining operating in the area. But he said that the region had not obtained sufficient benefit from the coal mining operation as much of the royalty went to Jakarta.

Head of the local mining office Akhmadsyah Adnan supported the view of Morhan. He said that under the existing regulation, the coal-producing region obtained 80 percent of the coal royalty, while the central government obtained 20 percent.

But he said that out of the 13.5 percent coal royalty paid by coal mining companies, 7 percent was taken out for the central government as coal mining development funds, and another 2 percent for tax. He said that it was the remaining 4.5 percent which was being split between the coal producing region and the central government. He said that under this mechanism, the central government received much of the royalty.

Adnan said that with much of the coal mining development role to be taken over by the regional government, the 7 percent fund should be redirected to the regional administration.

The paper said that the HSU administration was planning to go to Jakarta to renegotiate the coal royalty split.(*)

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