Jakarta City Center provides token space for small businesses

The Jakarta Post, Jakarta

Although touted as the first commercial complex that embraces small-and medium-scale enterprises (SMEs), the Jakarta City Center which opened on Thursday will not provide 20 percent of its total space for that purpose as regulated by law.

Out of the total area of 13.6 hectares, located in Waduk Melati, Central Jakarta, only 7,200 square meters, or no more than 6 percent, will be dedicated for what is called an SME center.

Most of the five-story wholesale center will be occupied by offices, a hotel and a convention center.

Bylaw No. 2/2002 on private markets stipulates that 20 percent of the space must be provided for SMEs in large shopping centers and commercial complexes and that this cannot be exchanged with financial compensation.

Currently, most of the managing companies of shopping centers opt to compensate for the space for SMEs by paying a sum of money to the administration. This practice has long been criticized, including by councillors, as most of the compensation money does not go to the SMEs.

Despite this fact, Governor Sutiyoso praised the project, claiming that the project reflected the government's concern for small businesses.

"This is the first time we have integrate SMEs in a plush shopping center in a bid to give them the access to the bigger market," he said during the groundbreaking ceremony.

Sutiyoso said the SMEs were the main pillar of the city's economy since they managed to absorb more than 800,000 workers. "Many of them are still surviving until today, at a time when most big companies have tumbled down in the wake of the 1997 economic crisis."

The joint project of the administration and private companies, that will cost Rp 1.7 trillion (US$184.7 million), was not without controversy as it also violates another article in the bylaw that stipulates a private market occupying 4,000 square meters of land must be built at least 500 meters to 2.5 kilometers away from the nearest traditional market.

The Jakarta City Center is located 400 meters from Kebon Melati market, 800 meters from Kebon Jati market and one kilometer from Gandaria market.

Besides that, the developer had not obtained the result of the feasibility study of the project to date, the main requirement before starting construction.

But president director of developer PT Jakarta Realty, Trihatma Kusuma Haliman, asserted that the center would be operational by the end of 2005.