Govt sets up team to boost cargo-handling in Batam

Urip Hudiono, The Jakarta Post/Jakarta

As a follow-up to the recent upgrading of the status of Batam's Industrial Bonded Zone into a "Bonded Zone Plus", the government is setting out to develop the island into an integrated cargo- handling hub to meet the same international standards as neighboring Singapore.

Therefore, Coordinating Minister for the Economy Aburizal Bakrie said on Friday, the government has formed a special assistance team on Batam, to speed up its plan of transforming the island's seaports and airport so that they are world class.

"The government is considering whether to develop Batam into a free port that will compete head-to-head with Singapore, or whether it will complement the city state's port," he said after a meeting on the establishment of the assistance team.

The team -- consisting of Minister of Trade Mari E. Pangestu, Minister of Transportation Hatta Radjasa, Minister of Industry Andung Nitimihardja and Minister of Public Works Djoko Kirmanto -- is tasked with helping out the Batam Authority Agency and the municipal administration in laying out the future blueprint of the island's development.

Batam, a part of Riau Islands province, is located some 20 kilometers from Singapore, the world's busiest port in the key Strait of Malacca shipping lane.

Batam has become one of the most attractive manufacturing and industrial locations in Southeast Asia, hosting some 600 foreign companies and absorbing over US$3 billion in foreign investment.

Hatta said the government had completed its registration of Batam's Nipah Island -- which directly borders Singapore -- with the International Maritime Organization (IMO) as a transit port for passing ships to stop before entering Singapore, as well as to provide them with food, water and other supplies.

The transit port will be developed by PT Maxteer Dyrynusa Perdana, a joint venture between PT Pelabuhan Indonesia I and the Navy's western fleet.

Aburizal said the government would also set up a cargo- handling industry at Batam's Hang Nadim International Airport, in line with its plan to transform the island into an integrated sea- and air-based cargo services hub.

"The airport has potential for such an industry, as it has the best facilities in the country as well as the longest airstrip," he said.

Concerning Batam's Free Trade Zone (FTZ) status, Mari said the government would continue implementing its Bonded Zone Plus concept, including toward Batam's Rempang and Galang islands.

"The islands are suitable for development into industrial areas under the scheme, as they are inhabited, so it will not cause problems with Batam's FTZ status," she said.

The government has upgraded the status of the Batam Industrial Bonded Zone, Bintan Industrial Estate and Karimun Industrial Estate through a governmental regulation and three ministerial decrees known as the July Package.

The package allows manufacturers in the areas to import used capital goods for industrial purposes without official permits and surveyor inspections, as long as they are an inseparable part of relocating businesses to the zones.