Estates only for West Java's future factories
JAKARTA (JP): The government has ruled that all new industrial plants in Bogor, Tangerang, Bekasi and Krawang in West Java must be established in industrial estates.
Minister of Agrarian Affairs/Chairman of the National Land Agency Soni Harsono has instructed the agrarian offices in the four regencies to stop issuing location permits to industrial projects planned outside industrial estates.
Soni stipulated in a directive issued late last month that new industrial projects outside the four regencies must also be built in industrial estates except when there were no such estates already developed.
The letter of instruction apparently is designed to help accelerate the implementation of the 178 industrial estate projects covering 53,000 hectares in 17 provinces already licensed by the government.
Soni quoted the finding of a study his office made in cooperation with the ministers of industry and trade and investment development which showed that only 17,995 of the 53,000 hectares licensed for industrial estates had been acquired by the developers.
He said only 6,369 ha of the acquired land had been developed into industrial plots ready to accommodate factories.
Even though many industrial estate projects have been licensed in West Java many investors have applied for permits to set up their industrial projects outside industrial estates.
The study found that many businessmen preferred to build their industrial projects outside industrial estates, although industrial estates offer such facilities as one-stop administration centers for the processing of location and building permits.
According to Soni, investors who shunned industrial estates cited high land prices, the absence of access roads, extra charges for infrastructures and inadequately developed facilities as the main reasons for their decision to locate their projects outside industrial estates.
Soni ordered the heads of all provincial and regency land offices to evaluate the issuance of location permits for industrial estate projects and to report the results of their evaluation to the National Land Agency.
The slow implementation of industrial estate projects has been causing great concern among businessmen, including House members, who argue that the problem might discourage new investment in the country.
Poor coordination
Legislator from Golkar ruling party Tadjudin Noer Said said last week that investors might cancel their projects in the country and move them to other countries due to the difficulties of getting land for their plant projects.
Tadjudin blamed the problem partly on the poor coordination between government offices responsible for the processing of local permits and for the procurement of land for industrial estates.
Many industrial estates remain undeveloped because of the lack of cooperation on the part of local administrations to make things easier for industrial estate developers, he said.
He said developers often find it extremely difficult to acquire land for their projects because land in the areas designated for their estates has been controlled by middlemen.
"I am afraid that if this condition does not improve, we will not reach our investment target for the second long term development plan which will end in 2019," he said.
Tadjudin suggested that President Soeharto form a special task force to accelerate the development of industrial estates in a bid to stimulate the implementation of new industrial projects.
The government has set the target of total investment during the 25-year development plan at Rp 815 trillion (US$348.3 billion), of which 80 percent is expected to come from the private sector. (jsk)