Speaking to The Jakarta Post in Batam on Monday, Agrarian and Spatial Planning Minister Ferry Mursyidan Baldan said that only plots of land with clear statuses were allocated by the BPK FTZ to investors for industrial developments.

'€œThere is no need to withdraw the BPK FTZ'€™s land allocation authority. The important thing is that we will always coordinate,'€ Ferry said.

According to Ferry, there was no significant problem regarding land allocation in Batam as all allocations had been done according to prevailing procedures.

Ferry was responding to allegations that many land allocation deals made by the BPK FTZ ended in conflict, had no legal credibility and caused high costs to investors.

The issue was brought back under the spotlight after land already allocated by the BPK FTZ to investors was later declared as a protected forest by the Forestry Ministry.

The Forestry Ministry issued Ministerial Decree No 463/Menhut-II/2013 as a follow up on Presidential Decree No 87/2011 on Batam, Bintan and Karimun Spatial Planning.

The Presidential Decree stipulates that Tanjung Uncang, Tanjung Gudap, Batu Ampar, Telaga Punggur and Sekupang are industrial areas. Yet, in contradiction, the Ministerial Decree states that Tanjung Uncang, Tanjung Gudap and Batu Ampar are protected forest.

As such the 22,000 land certificates for housing, shipyards and industrial areas have became legally unclear.

The National Land Agency has not yet been able to issue certificates for land ownership because of their status as protected forests. The banking sectors similarly could not accept the certificates as collateral.

This has raised concern among foreign investors, especially those from Singapore who are among the top investors in Batam.

Chairman of the Batam City legislative council'€™s Commission II overseeing the economy, Yudi Kurnain, urged President Joko '€œJokowi'€ Widodo to withdraw authority over land allocation from the BPK FTZ Batam.

He said many of the allocations made by the BPK FTZ were not in accordance with the city'€™s spatial planning.

He added that the authority to allocate land was in the hands of the BPK FTZ while spatial planning was prepared jointly by the legislative council and the city administration.

'€œWe declared a certain region as a green zone but the BPK FTZ decided that it was an industrial one. This occurs frequently,'€ Yudi said.

Yudi said that the council had long been demanding the withdrawal of land allocating authority from BPK FTZ and that it be handed over it to the BPN.

Investors, according to Yudi, never obtained land in Batam according to the price as published by the BPK FTZ, but far above it, thanks to the work of speculators.

'€œIt has been a playground that many investors have been complaining about as it leads to high costs,'€ he said.

Separately, BPK FTZ head Mustofa Widjaja said that his side had been working carefully to allocate land to third parties.

'€œWe work extremely carefully when allocating land,'€ said Mustofa on the sidelines of his meeting with Ferry Mursydan Baldan.

In September last year, the central government announced plans to make Batam a separate province in order to end alleged authority disputes between the Batam city administration and the management of the FTZ.

Within the plan, Batam would become a new province governed by a governor who would also become the head of the Batam FTZ.

The central government had assembled a team to start planning the creation of Batam province. The province might come into existence five years after the completion of a two-year of feasibility study.

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