The Jakarta Post
The central government has made a change to the status of the Batam Industrial Development Authority (BP Batam) that has sparked speculation about a disbandment of the authority, which Coordinating Economic Minister Darmin Nasution denied.
Under the policy announced on Wednesday, Darmin said the authority was now under the control of the Batam mayor. Muhammad Rudi, the current mayor, welcomed the central government’s decision but declined to comment further.
“I don’t want to speculate, because I have no basis of reference on [the matter]. There is no document yet. Therefore, I will not comment on it. I did not know about the decision [beforehand],” Rudi said on Thursday, adding that he had not been invited to the State Palace in Jakarta when the issue was discussed by the central government.
“Once everything is clear, I will comment.”
Established in 1978, BP Batam, which was initially known as the Batam Authority, was the first free-trade zone (FTZ) in Indonesia.
Darmin previously said that President Joko “Jokowi” Widodo had introduced the new policy to end the dualism in the leadership of Batam, namely under BP Batam and the Batam mayoral administration.
“It is the only way [to end the dualism],” Darmin said on Wednesday, adding that under the new policy, the status of Batam as an FTZ was still in place.
Rudi said he had long thought of how to manage Batam effectively. He had proposed changing the FTZ into another special economic area (KEK), of which the central government has founded numerous across the country.
That idea, however, did not go down well with businesspeople on the island, who feared the change would weaken the competitiveness of products manufactured on the island by increasing red tape.
Rudi said he had long considered scrapping the annual fees to be paid by Batam residents, known as the annual mandatory fees for the Batam Authority (UWTO) ruled under BP Batam.
“I feel sorry for the people who have houses in Batam, because they are required to pay the UWTO. Such fees should not target the residential areas,” Rudi said, adding that paying such a fee was no problem for investors but too much of a burden for Batam residents.
Meanwhile, BP Batam head Lukita Dinasyrah Tuwo did not comment on the government’s new policy on Batam.
The leadership dualism has caused problem because of overlapping authority between the mayoral administration and BP Batam. It has also long confused investors. (bbn)