Developers build houses on industrial estates
JAKARTA (JP): The Federation of Industrial Estates admitted yesterday that some of its members have been building housing estates and golf courses on land initially acquired to establish industrial estates.
Federation Chairman Halim Sahab made the admission in a statement during a hearing of House Commission VI for industry and investment, in response to legislators' concerns over the increasing number of golf courses and housing estates sprouting on land originally planned for industrial estates.
Halim said, however, that industrial estates which have changed their land utilization have done so legally and with support from local administrations.
"The change in land utilization is possible because local administrations have been willing to change the companies' permits to ones that allow for the construction of housing estates or golf courses," he said.
"Additionally many industrial estate companies use part of their industrial areas to build housing estates or golf courses and do so under a different company name," he added.
Halim highlighted that there is currently no law against this and pointed out that any changes in land utilization permits are made under the auspices of the Ministry of Justice.
He said that local administrations will usually allow such a change if it conforms with the local site plans.
"Since the legality is given by a local administration, it is no longer a problem for the federation," he said.
Legislator Iskandar Mandji of the Golkar faction expressed concern over such changes because it reduces the size of industrial estates.
"The government has issued many deregulatory measures to stimulate activities in industrial estates and encourage manufacturing firms to move into the estates, but what good is this if the estate companies themselves do not make use of this chance," he said.
Iskandar said industrial estate companies lack competitiveness, as shown by the reluctance of many manufacturing companies to set up factories in industrial estates.
According to the federation's figures, 2,969 hectares of land in Jakarta have been allocated for industrial estates under the management of four companies. From this total, 99.12 percent has so far been acquired. However, only 453.93 hectares or 15.4 percent of the acquired land has been sold to manufacturing corporations.
In Tangerang, West Java, nine companies with a total land allocation of 2,150 hectares have managed to acquire 48.84 percent of the land they want. But they have only managed to sell 80 hectares, or only 7.62 percent of the acquired areas.
In Serang and Karawang, both also in West Java, 24 industrial companies have so far managed to sell only 16.24 percent and 14.15 percent of their acquired land respectively.
In Batam, in Riau province, and East Java, 18 industrial companies have managed to sell 16.02 percent and 24.5 percent of their acquired land, respectively.
Iskandar said the small percentage of areas sold to manufacturing firms shows that industrial estate firms have not yet met the expectations of manufacturing firms.
Apart from changes in land utilization, he said, another reason that the estates are uncompetitive is the expensive prices of the individual sites.
Halim said the high prices are due to high land acquisition costs, caused by legal and illegal fees as well as the need to build infrastructure facilities and supporting facilities such as health clinics and sports venues.
"There is also a law which says that in an acquired area, only 70 percent can be used for industrial purposes, while the remaining 30 percent must be allocated for non-commercial purposes and infrastructure facilities," he said. (pwn)