Estates only for West Java's future factories
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)