ADVERTORIAL - FOR MONDAY<\/p>\n
Investment Year<\/p>\n
Batam -- The right model in attracting foreign investments<\/p>\n
The unfavorable situation in the world's economy will
\nundoubtedly make the task of the Batam Industrial Development
\nAuthority (BIDA) in attracting foreign investors more
\nchallenging.<\/p>\n
The task will be even more difficult given the lack of the
\ngovernment's supports. The central government's policies related
\nto investment activities on Batam and neighboring islands of
\nRempang and Galang have been discouraging. Foreign and local
\ninvestors who played a pivotal role in the development of the
\nislands have often been forgotten.<\/p>\n
President Megawati Soekarnoputri declared in Feb. 27 the year
\n2003 as Investment Year for Indonesia amid the growing optimism
\non the signs of recovery in foreign inflows into the country.<\/p>\n
With the declaration of the Investment Year, the government
\nhopes the realization of investment approvals will improve and
\nreach at least 30 percent.<\/p>\n
The realization of investment plans in Batam has reached 80
\npercent, far than the government's target. Last year, total
\ninvestments on the island and surrounding areas reached about
\nUS$9.19 billion, absorbing 161,648 workers and contributing
\nincome tax of over Rp 1.4 trillion.<\/p>\n
However, the success of Batam in attracting both foreign and
\ndomestic investments has not received a positive support from
\nthe central government. This can be seen from the uncertainties
\nrelated to the implementation of the proposed Law on Free Trade
\nZone that will turn Batam as one of important free trade areas in
\nAsia and Pacific. With this status, investors can enjoy a number
\nof fiscal breaks such as the exemption of Value Added Tax (VAT)<\/p>\n
Batam Island has an area of about 415 sq kilometer. However
\ndue to the progress of demand of space, the Batam industrial area
\nwas expanded in 1992 with the inclusion of two other islands,
\nRempang and Galang. Its close proximity to Singapore is one of
\nthe advantages of the industrial bonded zone but the island need
\nto introduce more incentives such as tax breaks to enable it to
\ncompete with other investment destinations in the region.<\/p>\n
BIDA's Chairman, Ismeth Abdullah, said the authority would
\nmake any possible efforts to further attract foreign investors to
\nthe industrial bonded zone despite the lack of the government's
\nsupports.<\/p>\n
A number of programs have been made to enable BIDA to promote
\nthe island more effectively such as through the sending of
\ninvestment mission overseas.<\/p>\n
"If in the past we focused only on Singapore, we are now also
\ngiving more attention to other Asian countries and Europe,"
\nIsmeth said, adding that the authority had recently sent
\ninvestment missions to Japan and Germany as part of its campaigns
\nto attract new investments from outside Singapore.<\/p>\n
Ismeth said that the mission had produced fruitful results
\nsuch as the signing of Memorandum of Understanding (MOU) accords
\nwith a number of economic organizations both in Japan and
\nGermany.<\/p>\n
The authority has also made significant breakthroughs in its
\nefforts in promoting the quality of services such as by
\norganizing regular meetings with investors as well as actively
\nbeing involved in mediating disputes arising between workers and
\ninvestors.<\/p>\n
The authority also takes more persuasive approaches in
\nsettling the problems rising from the different perception of tax
\npayments with investors. Besides simplifying the procedures
\nimposed on investors in obtaining their investment permits, the
\nauthority also guarantees that they will be freed from illegal
\nlevies when applying for permits.<\/p>\n
Ismeth, however, acknowledges that the improvement of services
\nwas no longer enough in attracting foreign investors to the
\nisland. "If the investors are not given attractive fiscal
\nincentives such as the exemption Value Added Tax (VAT) and Import
\nTaxes, they will not come and will instead invest in other
\ncountries," he said.<\/p>\n
At present, BIDA is also working closely with the local police
\nand security apparatus to ensure that Batam will remain a secured
\nplace for investors.<\/p>\n
As part of the cooperation, the authority has provided a
\nnumber of patrol cars and motorcycles, as well as communication
\nequipment to about 600 police members in Batam, Rempang and
\nGalang islands.<\/p>\n
Besides cooperating with the police, the authority also has
\nits own security department (Dirpam) which has so far recruited
\n700 personals to help the task of the police members. The
\nassistance provided by the authority to the Police, the Army, the
\nNavy and the Air Force in the form of equipment reaches about Rp
\n2 billion a year.<\/p>\n
The assistance is given to help the police and other security
\napparatus maintain the law and order and to ensure that the
\nisland is a secured place for some 611 foreign investors.<\/p>\n
The investors mostly carry out their activities in modern
\nindustrial estates on the island. There are 14 industrial estates
\nat present, which include Walakaka Industrial Estates, Kara
\nIndustrial Park, Cammo Industrial Park, Tunas Industrial Park,
\nKabin Industrial Park, Taiwan International Industrial Estate,
\nCitra Bauana Centre Indsutrial Park I and II, Batamindo
\nIndustrial Estate, Panbil Industrial Estate, Malindo Cipta
\nPerkasa Industrial Park, Bintang Industrial Park I and II, Indah
\nIndustrial Park and Latrade Industrial Park.<\/p>\n
About 4,000 hectares of land have so far been designated for
\nindustrial activities. The authority is currently preparing
\nanother 500 hectares for a similar purpose to anticipate the
\nsurge in new investments in the future.<\/p>\n
BIDA is also working closely with other agencies in improving
\nthe water, electricity and telecommunication facilities.<\/p>\n
In providing the water supply, the authority has appointed PT
\nAdhya Tirta Batam (ATB), a local subsidiary of a British water
\ncompany to manage and operate water installation facilities on
\nthe island under a 25-year Build, Operate and Transfer (BOT)
\ncontract.<\/p>\n
ATB, which began its operation in 1995, processes and manages
\nthe distribution of water from six major dams on Batam including
\nBaloi, Sei Harapan, Nongsa, Sei Ladi, Muka Kuning and Duriangkang
\ndams.<\/p>\n
The company is able to process about 30 liters per second from
\nthe water resource in Baloi dam, about 210 liters per second in
\nSei Harapan, 60 liters per second in Nongsa, 240 liters per
\nsecond in Sei Ladi, 310 liters per second in Muka Kuning and
\n3,000 liters per second in Duriangkang.<\/p>\n
The appointment of the branch of the state owned electricity
\ncompany PLN in Batam as an independent company in late 2002, has
\nbeen a major breakthrough in the distribution of electricity on
\nthe island. With its new status, PLN Batam has an autonomous
\nauthority not only in the distribution of the electricity supply
\nbut also in the operation of its power plants. It means that the
\ncompany will have more leeway in solving the electricity problem
\nthat might arise on the island.<\/p>\n
At present, PLN Batam operates 26 diesel power generators in
\nSekupang ( nine units), Batu Ampar ( four units), Baloi ( four
\nunits), Tanjung Sekuang ( seven units) . The company plans also
\ntwo build two more power generators in Tanjung Sekuang within the
\nnext two years to anticipate the surge in the electricity demand.
\nAt present, the combined generating capacity of the company's
\npower generators is 175.4 Megawatt (MW).<\/p>\n
A number of industrial estates operate captive power plants to
\nmeet the need of electricity from investors running factories on
\nthe estates. Batamindo Industrial Estate, for an example,
\noperates a power plant with a generating capacity of about 70 MW
\nand Pambil Industrial Estate operates a power plant with a
\ncapacity of 2 MW.<\/p>\n
With the use of digital technology, fixed-telephone facilities
\non Batam island and its surrounding areas are relatively more
\nadvanced, compared to those in other Indonesian areas, which
\nmostly still use an analog system. Besides using digital
\ntechnology, the telecommunication facilities on the island are
\nalso supported by more reliable underground cables, which have a
\nbigger transmission capacity.<\/p>\n
In the field of mobile phones, Batam has often been used by
\nmobile phone operators as a pilot project for the introduction of
\ntheir new services. Indosat Multi Media Mobile (IM3), for
\nexample, firstly introduced its multimedia service on the island.<\/p>\n
"Batam has become the launching area of new telecommunication
\nservices both for mobile and fixed phone operators, " said Arief
\nMusta'in, the general manager of Telkom for Riau islands. "For
\nTelkom, the island is the area where the company used its latest
\ntechnology," he added.<\/p>\n
Telkom, with a capacity of providing 78,400 telephone lines,
\nhas 76,000 subscribers on Batam and surrounding areas.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/badvertorial-for-mondayb-1447893297",
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