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: