Consortium established to support special economic zone

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The municipal administration of Palu, Central Sulawesi, has established a consortium to support the success of the city’s special economic zone (KEK) program.

Palu Deputy Mayor Andi Mulhanan Tombolotutu said the consortium comprised a network of 57 investors that would invest in the KEK.

“They will help build basic infrastructure facilities in the KEK for three years,” Andi said after presenting the final document of the project in front of the KEK board from the Finance and Industry Ministries on Tuesday.

The consortium, according to Andi, would be under the network of municipal-owned companies. It is expected to invest over Rp 30 trillion (US$3.15 billion) in the development of the zone’s main infrastructure.

Investment would be taken forward in, among other things, roads and other facilities in the 1,500-hectare plot of the KEK in North Palu.

“That way, the development of infrastructure will not burden the municipal budget, especially regarding its huge value,” said Andi, who is also the caretaker of the KEK.

Alex Halim, an automative business practitioner, said that he was interested in investing in Palu because of the KEK special facility offered and the municipal administration support.

“If the KEK is not there, I will prefer building a factory in Jakarta or in other regions in Java. But as the KEK is here, I have decided to develop my business in Palu to serve the eastern Indonesian
regions,” Alex said.

Alex added he would build a sinotruck assembling factory. He said he was currently in the preparation stages of doing so.

“Once the KEK is set, I will start constructing the building right away,” he said.

Lucky Eko Wuryanto, deputy of the infrastructure and regional development division of the Office of the Coordinating Economic Minister, said that in September this year, the ministry’s regional board would hold a meeting to decide two regions, namely Palu and Bitung, as special economic zones.

“As seen from the required documents, Palu is qualified to be named as one,” he said.

Based on studies in a number of countries, according to him, a special zone would need tax incentives, import duty reduction and a land acquisition facility.

Investors, he added, would also require other supporting facilities such as electricity power plants and public infrastructure.

“All of these have been prepared in Palu. There has also been support from the PLN to prepare the municipality as a location for electricity inter-connectivity for Sulawesi, Maluku and Papua,” he said, referring to the state-owned electricity company.