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BKPM eyes 11 new industrial zones with incentives
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A worker inspects a car assembly line. The Indonesia Investment Coordinating Board (BKPM) hopes to see 11 more industrial zones be available as a "direct construction incentive" to investors who build their facility in these specified zones. (AFP)
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ndonesia Investment Coordinating Board (BKPM) hopes to see 11 more industrial zones be available as a "direct construction incentive" to investors who build their facility in these specified zones.
Since 2015, the government called on all industry players to concentrate their operations in industrial zones, where incentives were provided to lure them to construct facilities in such zones.
“Until April 30, there are 31 projects utilizing the direct construction services offered in six industrial zones worth Rp 55.5 trillion [US$4.21 billion],” said BKPM chairman Franky Sibarani on Tuesday in Jakarta.
Currently, there are 14 industrial zones in six provinces offering the service of which only nine are active. According to Industrial Zones Association (HKI) data, there are 113 industrial zones in Indonesia, which 70 of them are HKI members.
“Some of the areas are actually not industrial zones, but they claimed to be one, such as the one located at Pasar Kemis. The government must handle this issue,” HKI chairman Sanny Iskandar said.
On the other hand, several problems, including infrastructure, exists at the industrial zones. Several regional administrations were reluctant to widen road access because they regarded it the central government’s responsibility, Sanny said.
The issue has gotten complicated as several local governments have turned down proposals to offer direct construction incentives. Eight industrial zones in Batam for years have asked the governor to apply for the incentives, only to get ignored.
“Also, there are problems related to the additional requirements of local governments, such as the minimum allocation for corporate social responsibility (CSR). Some foreign investors were surprised as it is not mentioned during BKPM’s roadshow,” Sanny said.
Responding to this, BKPM deputy Tamba Hutapea said BKPM would mediate access needs for roads, railway and other infrastructure.
“We have helped some industrial zone, mediating with related ministries, to open railway, toll roads, electricity and water systems. Even the Public Works Ministry and PLN (state-owned electricity company) have requested us to speed up the process,” he said. (ags)
