Earthquakes rattle economy far and wide

Earthquakes rattle economy far and wide

Amid the grief over the loss of more than 1,000 lives, the West Sumatra and Jambi earthquakes will mean enormous medium-term material losses with repercussions going beyond the borders of both provinces.

The cost of the losses will be in the trillions of rupiah, but the government says the real blow to the national economy will come from devastated infrastructure affecting availability of goods and services.

The State Ministry for National Development Planning has dispatched a team to verify the scale of the losses, starting with inventories needed to help those directly affected, as part of an emergency program.

“Emergency measures may take two months, then rehabilitation of infrastructure to get the wheels of the economy turning again,” Minister Paskah Suzetta said Friday.

Paskah said the government would launch a rehabilitation program that would include the erection of houses for those who lost homes in the quake. He said to rehabilitate a 30-35 square meter house would cost about Rp 1.5 million (US$156) per square meter, or about Rp 50 million per house.

“That is for an anti-quake house. Commercial buildings and hotels are not our responsibility but we will provide aid. We will prioritize people’s houses and infrastructure,” he said.

Under the 2010 budget law, the government is allowed to add up to Rp 24 trillion in spending for priority projects. The adjustment should be proposed to the House of Representatives within the first three months next year.

PT Asuransi Maipark Indonesia, an insurance company focusing on earthquake related insurance, estimates financial losses from destroyed buildings caused by the two earthquakes on Wednesday and Friday, both above 7 magnitude scale, could reach about Rp 2 trillion.

Maipark’s director Bisma Subrata said this only included the cost of destroyed buildings. The economic loss might be higher as Maipark’s simulation had yet to include the cost of destroyed infrastructure, bridges and power facilities, he said.

Bisma said that Jambi might have suffered higher losses than West Sumatra. “Based on our simulation, the economic losses in Jambi could reach Rp 1.2 trillion, while the losses in West Sumatra may reach about Rp 821 billion,” he said.

“Jambi suffered bigger losses because its position is closer to the epicenter of the quake ” Bisma said.

Provincial electricity distribution was severely disrupted in both provinces. Fahmi Mochtar, president director of state power utility PT PLN, said 220 transformers, 235 kilometers of medium voltage cables; 445 kilometers circuit of low voltage cables plus buildings and vehicles were destroyed or damaged.

“We estimate PLN’s total losses are Rp 169.9 billion,” Fahmi said.

As of Friday afternoon, PLN claimed that about 60 percent of its power generator facilities in Padang, the capital city of West Sumatra, were operating normally, but with repeated blackouts.

A cement plant belonging to PT Semen Padang has not been operating since Wednesday night due to power cuts. The factory needs up to 120 megawatt of power to produce 17.400 tons of cement per day.

The company said the factory would resume operations no later than 10 days after the quake, factoring in a commitment by PLN that it would channel power to the cement plant at the latest by Wednesday.

The company said the potential losses from the lost of production could reach up to Rp 120 billion.

Commodity traders says shipments of rubber and palm oil from Sumatra will be delayed for more than a week as access to the famous Teluk Bayur port in the city is disrupted, as well as plants, roads and buildings.

About 90,000 metric tons of palm oil set for October delivery is likely to be delayed, Bambang Aria Wisena, head of organizational affairs at the Indonesian Palm Oil Association, said as quoted by Bloomberg. Transport problems may delay delivery of 50,000 to 60,000 tons of rubber, Asril Sutan Amir, chairman of the Rubber Association of Indonesia, said. Indonesia is the world’s top producer of palm oil and second-biggest grower of rubber.

Financial services in banks are expected to be normal again on Monday, after days of disruption to the banking facilities in the city, the central bank said Friday. As part of its contribution, the central bank said it would restructure loans of debtors suffering from the quake.

BI deputy governor Muliaman D. Hadad said the restructuring was made possible by a regulation, issued in 2006, that allowed special treatment for debtors in disaster areas and affected by them.

As of August, loans in West Sumatra stood at Rp 15 trillion, or 1.1 percent of outstanding loans nationally. Savings reached Rp 16.2 trillion, or 0.9 percent of nationwide savings. The rate of non-performing loans (NPLs) in August stood at only 2.19 percent.

West Sumatra has 180 commercial bank branches and 227 rural bank offices.

DE Setijoso, president director of Bank BCA, said while some branches had problems with the conditions of their buildings, the bank had managed to shift operations to other branches.

“Internet banking and mobile banking are still working. Relatives in Jakarta can send money to families in Padang,” he said.

Bambang Setiawan, director of Bank Mandiri, said Mandiri had shifted human resources from damaged branches to other branches which did not suffer damage.

Sulaiman Arif Arianto, director of Bank BRI, said the bank was ready to restructure small loans.
“We are ready to restructure small loans. We expect it can improve the conditions.”

Rehabilitation costs Of previous earthquakes

Aceh & Nias (2004) : $2.1 billion
Yogya & Central Java (2006) : $560 million
Pangandaran (2006) : $200 million
Bengkulu & West Sumatra (2007) : —
West Java (2009) : $156 million

From various sources

Aditya Suharmoko and Alfian , The Jakarta Post , Jakarta

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Lost hamlets to become mass graves after huge quake

Lost hamlets to become mass graves after huge quake

Combing the rubble: Two members of Australia’s Queensland Search and Rescue team look for victims in the wreckage of a damaged building in Padang, West Sumatra, on Sunday. Authorities estimate Tuesday’s 7.6-magnitude earthquake may have killed about 3,000 people. JP/J. Adiguna

West Sumatra decided Sunday to turn a hillside in Padang Pariaman regency, where three hamlets and hundreds of villagers were swallowed by landslides after a powerful earthquake, into mass graves, as hopes faded for more survivors.

“The decision on the mass grave was agreed today in a meeting with local leaders. There is little possibility of survivors and we are prioritizing those with a higher chance of survival,” said West Sumatra administration spokesman Dede Nuzul Putra in Padang, the provincial capital.

“The victims have been buried more than five days, it is unlikely they could survive."

The hamlets of Kapalo Koto, Cumanak and Lubuk Laweh in Patamuan district disappeared along with 400 people when the 7.6-magnitude quake hit West Sumatra last Wednesday, swallowing them up in a torrent of mud and rocks .

The landslides produced an area of devastation at least five kilometers wide, making it difficult for rescuers to find the victims.

Padang Pariaman Regent Muslim Kasim said Sunday only 28 bodies have been retrieved from the area of the hamlets since Thursday after the arrival of three excavators. Few in the area survived the disaster.

However, a joint rescue team consisting of local people, the National Search and Rescue Team, military and police personnel, and foreign volunteers, were still working to locate victims.

“According to the existing regulation, any area where a landslide occurs has to be closed to any [future] settlement,” said Priyadi Kardono, spokesman for the National Disaster Management Agency.

He added that following disaster management operating procedures, efforts to locate victims would continue until a week after the disaster.

“After that period, we will ask whether victims' families agree to the bodies not being retrieved. Should they demand that the search continue, we would continue.”

There is no clear word on the total death toll from the quake. The UN put the toll at 1,100.

The government earlier said 715 were dead and 3,000 missing, but later revised the figure Sunday to say 605 people were confirmed dead and 960 missing, presumed dead.

The missing include those buried in the landslides.

Elsewhere in Parit Malintang district in Padang Pariaman, one of the hardest-hit regencies, hundreds of children lined up in the streets Sunday begging for donations from motorists as aid had yet to reach them four days after the quake.

Jasmani, a 55-year-old widow with eight children in South Parit Malintang, whose house was toppled by the quake, said she had to order her children to beg for donations in the streets.

"This is what we received," she said, displaying one kilogram of rice and a packet of biscuits.

Aid and rescue efforts have been concentrated in Padang, a coastal city of 900,000 people where several tall buildings collapsed and hundreds died.

The quake was equally devastating in Padang Pariaman, where rescuers have all but given up hope of finding any survivors in the rubble of the 140-room, Dutch-colonial style Ambacang Hotel. Around 200 people were in the hotel when it collapsed. Search teams have found 29 bodies and no survivors in the last two days.

“After four days, finding survivors is almost impossible," Lt. Col. Harris, the chief of the 50-member rescue team, which comprises military, police and Red Cross personnel, said as quoted by Reuters.
“The smell of decomposing bodies was very strong."

According to the National Disaster Management Agency, 83,700 houses, 200 public buildings and 285 schools were destroyed. Another 100,000 buildings and 31 kilometers of road were badly damaged, and five bridges have collapsed.

Hundreds of doctors, nurses, search and rescue experts and cleanup crews arrived Saturday at the Padang airport from around the world with tons of food, tents, medicine, clean water, generators and a field hospital.

With no electricity, fuel shortages and telecommunication outages, the massive operation was chaotic.

Deliveries came on C-130 cargo planes from the US, Russia and Australia. Japanese, Swiss, South Korean and Malaysian search and rescue teams scoured the debris. Tens of millions of dollars in donations came from more than a dozen countries to supplement the US$400 million the Indonesian government said it would spend over the next two months.

The UN said there were sufficient fuel stocks in the area for only four days, but with the road to a major depot cut off by landslides, gasoline prices had jumped six-fold. Areas with "huge levels of damage to infrastructure were in need of basic food and tents for temporary shelter", it said.

Andreas D. Arditya and Syofiardi Bachyul Jb , The Jakarta Post , Padang

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