Developers must heed economic gap, says Rais

JAKARTA (JP): Deputy Governor for Economy and Development Affairs TB.M. Rais told developers who build luxury housing and commercial complexes to watch out for Jakarta's economic gap.

Addressing the second convention of the city branch of the Association of Indonesian Developers (REI), Rais said providing public facilities is one way to prevent a wider gap.

"It is not fair," Rais said, if a private developer profits while neighbors of the project lack infrastructure.

Potential "social problems," or the envy of those living nearby the projects are carried out, are likely to affect the local real estate and business climate, he said.

Recently, the city council urged mayors to demand that 77 developers fulfill their obligations to build local facilities, which are worth at least Rp 600 billion (US$255.76 million).

In North Jakarta alone, nine developers have yet to begin work on rehabilitating eight state-owned elementary schools and one junior high school.

With so much work to be done, Rais said of this evening's election of a new board of executives, "I hope candidates (for the 1996-1999 period) will not only be busy jostling for seats."

"The new board must be active in prodding members who have not met their obligations."

A 1990 gubernatorial ruling, based on a decree of the Ministry of Home Affairs, states that developers must provide 20 percent of their plots for public facilities such as schools and places of worship.

The goal of this provision is to ensure that communities benefit from private sector development.

As land is becoming increasingly scarce, Rais said he hoped REI would encourage members to seek ways for sustainable development. The city is conducting several programs to improve the environment, he said, "but many developers do not have much concern yet."

The Association's central board is working out environmental standards for real estate development with the State Ministry of Environment.

In hope that the municipality and REI will create a closer partnership, Rais urged the Association to forge ties with several other organizations representing contractors, architects, and lawyers.

Yesterday's session of the two-day convention heard presentations from all five mayoralties on real estate opportunities in their areas.

Outgoing chairman Nugroho Suksmanto, a founder of REI's city branch in 1993, said the session was held to pave the way for more "openness" between the bureaucracy and developers.

"This is to prevent possible feelings that a mayoralty prefers one developer over another," Nugroho said. But developers uphold their half of responsibilities, and must be active in asking for information.

A representative of the East Jakarta mayoralty agreed, saying that developers should look to plans of the new business district.

Candidates for the board of directors include Yan Mogi, current secretary of the Association's city board, and Lukman Purnomosidi, of the state-owned company PT Wijaya Karya. Nugroho, who leads the privately-held PT Abadi Guna Papan, declined to run for a second term. (anr)