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The proposed 20 per cent levy by Indonesia’s Karimun province on its granite bound for Singapore may not come to pass, a senior Indonesian official told The Straits Times yesterday.

Mr Muhammad Lutfi, who chairs Indonesia’s Investment Coordinating Board, said he would meet Karimun’s governor and mayor next Monday specifically to thrash out with them the levy, which could amount to S$9.50 a tonne at the current price of S$60 a tonne here for granite.

He said: ‘Let me put it this way - we would like to give our investors good, smart policies.

‘We would also like to maintain the 3,000 workers working in the granite mines of Karimun.’

So, he stressed, it would not be smart if such a levy lost his country a vital market for the rock.

After all, he added, the whole point of Indonesia’s new pro-business drive, which he is steering, was to create jobs and lift at least 19 million Indonesians out of poverty by 2010.

Ironically, news of the levy came just a day after he told reporters at the World Economic Forum here that he was looking to ease Singapore’s importing of granite, perhaps even scrapping checks on Singapore-bound shipments.

Singaporean investors had queried him on the levy during a closed-door meeting at the Economic Development Board’s headquarters here yesterday morning.

Karimun’s planned levycame to light recently in a statement from building materials supplier Hong Leong Asia to the Singapore Stock Exchange.

Indonesia banned Singapore from buying its land sand in February and, in April, detained 12 of its granite-bearing barges on suspicion of sand-smuggling.

But on Monday, the Building and Construction Authority said all 12 barges had been released.

Source : Straits Times - 28 Jun 2007