BATAM STILL STRUGGLING TO RESOLVE DUAL MANAGEMENT PROBLEM

by Andi Abdussalam

Jakarta, Oct 7 (Antara) - Batam, a tiny industrial island of the Riau Islands Province, is still struggling to resolve the problem of dual management.          The island is governed by the Batam Free Trade Zone Authority (BP Batam) as well as the Batam City government, and businesses have complained about this dual management.          Chief Economic Minister Darmin Nasution said on Friday that the government will find the best solution to this problem and conceded that businesses have complained about this peculiar situation in Batam.          "We have to find a solution to this problem. After all, this is a problem that has been lingering on for the past 10 to 15 years. Clearly, it will not be easy to resolve it," the Coordinating Minister for Economic Affairs stated at a meeting with the Regional Representative Council (DPD) and business representatives from Batam in Jakarta on Friday.          He explained that there are a couple of problems coming the way of  effecting a change in the status of Batam from a Free Trade Zone (FTZ) to a Special Economic Zone (SEZ).          According to the minister, the government's Development Finance Comptroller (BPKP) is handling the problem of the dual management. The BPKP is carrying out an audit of the BP Batam institution before Batam's status changes to an SEZ effectively after the expiry of the transition period of three years.

GOVERNMENT STILL NEEDS TIME TO DECIDE ON DISSOLVING BATAM AUTHORITY

By Andi Abdussalam

Jakarta, Feb 19 (Antara) - The government is yet to arrive at a definitive decision on its plan to disband the Batam Free Trade Zone Authority (BP Batam) as it still needs time to contemplate on its pros and cons.          "The government has not yet arrived at a final decision as it is still conducting evaluations. We have not decided to dissolve it," Coordinating Minister for Political, Legal and Security Affairs Luhut Binsar Panjaitan stated in Batam on Thursday.           Panjaitan said the plan to disband BP Batam has been put on hold while awaiting the results of the government's studies, which were now being conducted by a team from the University of Indonesia.           After all, the central government is still waiting for the right time to invite Muhammad Sani, the governor of Riau Islands Province (Kepri), to Jakarta to seek inputs.           The BP Batam on Batam Island, which is being developed as an industrial island and a free trade and port zone near Singapore, is awaiting dissolution by the government for overlapping authority with the Batam Municipal Administration.

BP BATAM DISSOLUTION NOT TO AFFECT STATE-FUNDED PROJECTS

By Andi Abdussalam

Jakarta, Jan 9 (Antara) - The central government and the House of Representatives (DPR) have assigned more than Rp1 trillion in the state budget for the Batam Free Trade Zone Authority (BP Batam) to finance its project expenditure in 2016.          However, the government is now considering dissolving the BP Batam this month (January) because the management of the Batam Free Trade and Free Port Zone is overlapping between that of the BP Batam and of the Batam Municipal Administration.          If the BP Batam is disbanded, the fund amounting to more than Rp1 trillion should continue to be allocated for projects the BP Batam has planned such as port, airport and hospital projects.          "The government and the House have agreed to set more than Rp1trillion in the state budget for the BP Batam," Nyat Kadir, a member of Commission VI on industry and investment of the DPR said in Batam Thursday (January 7).

BATAM FREE TRADE ZONE AUTHORITY AWAITS DISSOLUTION

by Andi Abdussalam

Jakarta, Jan 8 (Antara) - The Batam Free Trade Zone Authority (BP Batam) on Batam Island, which is being developed as an industrial area near Singapore, is awaiting dissolution by the government for overlapping authority with the Batam Municipal Administration.          Dualism in the management of the free trade area between BP Batam and the Batam Municipal Administration has reportedly cast doubts among investors over running their businesses on the island.          Over the past decade, the government is estimated to have suffered annual losses amounting to Rp20 trillion due to overlapping authority between BP Batam and the Batam Municipal Administration.          According to President Joko Widodo (Jokowi), the dualism in the management of the free trade zone has triggered doubts among businesses to invest capital in the BBK area, a cluster of small islands of Batam, Bintan, and Karimun.

BATAM GEARING UP FOR INVESTMENT IN FACE OF AEC

By Andi Abdussalam

Jakarta, Aug 13 (Antara) - Adjacent to Singapore, the tiny Batam island, which is a free trade zone (FTZ) and an industrial hub in Indonesia's Sumatran Province of Riau Islands, is preparing for investment growth.          In the face of the ASEAN Economic Community (AEC), which will begin in late 2015, Batam has to boost the growth of its industry, trade, and investment. In view of that, the quality of its human resources will play an important role.          Chairman of the Economic and Polytechnics Research Center of Batam, Bambang Hendrawan, said the government should pay attention to the quality of its human resources in the face of steady investment growth of Batam's FTZ.          "The quality of human resources should be improved, so that Batam will no longer rely on standard quality that so far has laid emphasis on labor-intensive industries. This also should serve as an effort to face the flow of expatriates after the implementation of the AEC in 2015," Bambang noted.

BATAM MUST TAKE ADVANTAGE OF MALACCA STRAIT

By Andi Abdussalam

Jakarta, July 5 (ANTARA) - Situated in the world's busiest shipping lane, Batam Island must upgrade its ports and take advantage of cargo trans-shipment in the Strait of Malacca so it can compete with Singapore and Malaysia, which have much enjoyed the benefits of the strait.         The island, which is expected to become one of Indonesia's industrial hubs, must upgrade its port of Batuampar and develop a trans-shipment port in its neighboring island of Tanjung Sauh in order for Batam to take advantage of cargo ships sailing in the Malacca strait.         "So far, Singapore and Malaysia have taken advantage of the strait and enjoyed a lot of commercial benefits. Indonesia has not yet utilized it at all. The Tanjung Sauh port must be developed soon so that Batam can also take advantage of it," said Airlangga Hartarto, the chairman of the House of Representatives (DPR)'s Commission VI for trade, industry and investment affairs, recently.          "Tanjung Sauh can be a suitable trans-shipment port. Its [surrounding] water depth is 18 metres, so it can accommodate large ships," he explained.           Therefore, Airlangga said, his Commission VI would ask the central government to revise a regulation with regard to the free trade zone in Batam.          The revision, if made, would designate Tanjung Sauh port as a free trade zone in Batam, which would then be in line with the government's plan to develop Tanjung Sauh as a trans-shipment port.          "The development of the container port of Tanjung Sauh is not possible as of now because it has not yet been included in the Batam's free trade zones (FTZ). We will ask the government to revise the regulation immediately so that the project is not hampered," Airlangga said.           Tanjung Sauh island, which will be developed as a trans-shipment port with a capacity of 4 million twenty-foot equivalent units (TEUs), has not yet been recognized as an FTZ by the Batam Industrial Development Board (BP Batam).          "In order to get FTZ status, a port must have world-class infrastructure. If the port only had a capacity of 600,000 TEUs, like Batuampar port, then Batam would not be able to compete with Malaysia and Singapore," he said.          "So far, business in the Malacca Strait has been dominated by Singapore, which has a port of about 30 million TEUs, and Malaysia with its port of about 7 million TEUs," Airlangga added.          BP Batam Head Mustafa Widjaya said his office had finalized the development concept of the Tanjung Sauh port and had submitted a proposal to the local government of Riau Islands province, requesting the inclusion of Tanjung Sauh in the FTZ area of Batam.          "Batam FTZ areas cover Batam Island along with a cluster of other isles that are connected with a chain of six bridges, called the Barelang Bridge.  We hope that our proposal will be accepted and Tanjung Sauh will also be included in the FTZ areas," Mustafa said, adding that the regional government and the legislative assembly of Riau Islands had in principle approved the plan.          In the meantime, the Batam Industrial Development Board said its budget for 2013 was increased to Rp981 billion, from Rp640 billion in 2012. The extra funds would be used to finance the upgrading of Batuampar port's capacity, from 600,000 TEUs to 1.2 million TEUs.         "We expect that BP Batam will receive a budget of about Rp918 billion in 2013. Most of the amount will be allocated for the development of infrastructure in Batam's FTZ areas. This includes the upgrading of the Batuampar port, which is expected to cost about Rp360 billion," said Dwi Djoko Wiwoho, the director of the On-Stop-Service and spokesman of the Batam Industrial Development Board.          He explained that the development of Batuampar port was necessary because it was no longer able to facilitate the flow of cargoes or goods needed for the development of industry¿.          According to the plan, Batuampar port will be developed in a three-year time period. The upgrading of the port will require Rp60 billion in 2012, Rp200 billion in 2013 and Rp100 billion in 2014.          "We cannot provide more details as of now. What is clear is that most of the funds will be used for infrastructure development to increase the competitive edge of Batam's free trade zones," Dwi Djoko said.           Besides, Batam also is planning to develop other infrastructure facilities such as the Hang Nadim airport and the Tembesi reservoir, which will be built in stages.           Regarding the Rp918 billion of funds, legislator Harry Azhar Aziz of the House of Representatives, who represents the Riau Islands province, said the central government was planning to allocate the funds for the development of Batam's free trade and free port areas (KPBPB) in the 2013 draft state budget.          "The House's Commission VI has approved the funds for the BP Batam. What remains to be done is to endorse it," he stated.          Harry said Rp918 billion was a relatively big sum, which reflected the central government's commitment to development in the area.          However, Airlangga expressed discontent over the slow development of Batam in comparison with Malaysia's Iskandar Development Region.          "They have been very aggressive in attracting investment over the past several years, but Batam seems to be making no progress," he said, urging the Batam Development Board (BP Batam) to be more aggressive in promoting the island to investors.           Airlangga stated that Batam would be able to attract more investors if it was serious in developing its infrastructure.           "This year, BP Batam only set an investment target of US$300 million, which is relatively small if compared with the Rp640 billion allocated by the central government," he said.***2*** (T.A014/INE/H-YH) 05-07-2012 21:38:

BATAM REMAINS ATTRACTIVE TO FOREIGN INVESTORS

By Andi Abdussalam

Jakarta, July 4 (ANTARA) - Situated close to Singapore, Batam Island, which is poised to become Indonesia's main industrial hub in the Brunei Darussalam-Indonesia-Malaysia-Philippines East ASEAN Growth Area (BIMP-EAGA), is expected to remain attractive for investment.          Riau Islands Governor Muhammad Sani - who is also the chairman of the Free Trade and Free Port Areas (KPBPB) of Batam, Bintan and Karimun Islands ¿ expressed optimism that the island would continue to attract foreign investors.          The governor was responding to the recent rioting and other unrest, which were feared to discourage foreign investors from running their businesses in Batam and the surrounding isles of Bintan and Karimun.          About a week ago, legislator Airlangga Hartarto, who is the chairman of the House of Representatives (DPR) Commission VI on trade and industry, also expressed discontent over the slow development of Batam in comparison with that of Malaysia's Iskandar Development Region.          "They have been very aggressive in attracting investment over the past several years, but Batam seems to be making no progress," he said, urging the Batam Development Board (BP Batam) to be more aggressive in promoting the island to investors.          Airlangga stated that Batam would be able to attract more investors if it was serious in developing its infrastructure, adding that the central government would also increase the budget for Batam in 2013.          "This year, BP Batam only set an investment target of US$300 million, which is relatively small if compared with the Rp640 billion allocated by the central government," Airlangga said.           Besides, Batam has been plagued by unrest in recent days, such as the intergroup clashes last month and late last year.          Last month, outside Planet Holiday Batam, there were violent clashes among certain groups of people, which created much unrest and left one dead. Police arrested and named at least 10 suspects. After the arrest, there were rumours that the conflicting groups would trigger more unrest by distributing provocative leaflets and circulars.          "We have named 10 suspects: four from the attacking group and six from their rival," Barelang City Police Headquarters Chief Senior Commissioner Karyoto said.          In November 2011, Indonesian National Police arrested 27 people in connection with the violent demonstrations ¿ over wages ¿ that rocked the industrial zone of Batam, Riau Islands, for two days.          In the wake of the demonstrations, Batam authorities agreed to a more substantial increase in the city's minimum wage from the following year onwards. After lengthy negotiations, all sides agreed to peg the minimum wage to the Reasonable Living Cost Index (KHL).          As a result, the minimum wage was set at Rp 1.32 million (US$147) a month, which fell short of what the workers had been demanding.          Initially, there was a disagreement about the monthly minimum wage. Apindo (the Indonesian Employers Association) wanted it set at Rp 1.26 million, while the workers demanded Rp 1.72 million. This discord, it is believed, led to the rioting.          However, Governor Muhammad Sani, in his capacity as the chairman of the Free Trade and Free Port Areas (KPBPB) of Batam, said the situation had improved and the industrial island was still attractive to investors.          "The condition is now conducive. No foreign firms have left Batam because of the intergroup conflicts," he said here on Tuesday.          The governor explained that the rioting did not alone make foreign firms take the drastic step of leaving the island, adding that a business would close only if there was "an accumulation of unresolvable problems".          He asserted that Batam remained promising and offered several advantages to foreign investors.          Applications for foreign investment in Batam in 2012, particularly in the KPBPB areas, reached a value of US$61.4 million.         "In May, there were nine foreign investment firms which were interested in making investments worth a total of US$61.4 million in this island," said Dwi Djoko Wiwoho, the spokesman of Batam for business affairs.          He said the nine investors - from Germany, Singapore, India and Ireland - were interested in making investments in the offshore oil industry as well as in the metal, electronics and service industries.          Moreover, Batam has also attracted a Slovakian company. The company will invest in a steam power plant (PLTU) of a capacity of 2×50 megawatts, worth US$185 million, in the Kabil area of Batam.          "The project will be developed in cooperation with PT Pembangunan of Batam City," said Djoko, who is also the Director of Single Door Integrated Service and Public Relations of Batam Company, in Batam recently. He made the statement in the presence of the President Director of Istroenergo Group (IEG), Jozef Barat, and the Deputy Director of the Slovakian Exim Bank, Rudolf Silahovec.          Djoko told the press that the planned investment was a follow-up of a working agreement between  PKB and the Slovakian company.          The agreement was signed in Bratislava, Slovakia, on June 12, in the presence of Indonesian Coordinating Minister of the Economy Hatta Rajasa and the Finance Minister of the Slovakian Government.          Last weekend, a 10-member delegation from the ASEAN Connectivity Coordinating Committee (ACCC) also arrived in Batam to oversee the implementation of the Batam Single Window (BSW) system operated by the Batam Industrial Development Authority.          The 10 delegates are also part of the Committee of Permanent Representatives to ASEAN.          "They want to personally oversee the implementation of the Batam Single Window system and visit the Batamindo industrial zone," Djoko said.***2***   (T.A014/A/KR-BSR/F001) 04-07-2012 14:38: