Lippo Karawaci well on the way to becoming self-sustaining town
The Jakarta Post, Jakarta
Note: The steady influx of migrants into Jakarta has been partly blamed for poor public services in the capital. To solve the problem, some experts have suggested slowing down migration through the development of neighboring areas. The following is the first in a series of articles on fast-developing areas that have provided jobs for migrants.
One thing that is true of most developers is that they have imagination and foresight, aside from their business-oriented nature.
In just over a decade, PT Lippo Karawaci has turned what it claimed to be 460 hectares of unproductive rice fields into a new self-sustaining town that homes 8,000 families and provides jobs for more than 45,000 people.
"It was not the first place you would think of to build a top- class city," said Lippo Karawaci urban planner Gordon G. Benton. "But, if you want to be ahead of the game you have to create a location, create a product, which means you create a dream."
Their vision has become a reality with the development of a new city with almost 40,000 residents living in more than 9,000 houses and apartment units.
"We are what they call a kota mandiri (self-sustaining town) in the sense that we provide everything -- schools, hospitals, mall, markets -- from the beginning," Benton said.
The city adjacent to the Jakarta-Merak toll road has expanded -- occupying 1,233 hectares of land -- since the first stage of its development in January 1993. Some 30 percent of the land has been allotted for commercial activities, which according to Benton "are designed for the regency, not the city alone."
With all of its residential units sold, the value of the land has soared from US$142 (Rp 300,000) per square meter in 1993 to $246 (Rp 2.4 million) in 2004.
"Property values have increased, in rupiah rate, by 20 percent every year, year on year, for the last twelve years, in dollars it's 5.12 percent," Benton said.
Divided into three areas -- West, Central and North Lippo Karawaci -- the city boasts facilities that include an internationally recognized hospital, school and university as well as office towers.
Among the office towers is Menara Matahari, which serves as the headquarters of local department store chain Matahari.
"The raison d'etre of any town and urban set up is not houses or hospitals, it's jobs," he stressed.
"We provide some 6,000 jobs in our Supermal alone, while 27 percent of our population works in the area, including domestic workers," Benton explained the demography of the city.
"What is happening in the town is the creation of job opportunities," he said.
While the jobs available in the mall are predominantly taken by Tangerang residents, according to Benton, only some 17 percent of Karawaci's population works in Jakarta. However with barely an empty seat on the city's Jakarta-bound shuttle buses that number could be higher.
Benton said the great thing about the private sector assuming responsibility for an urban set up was that it took a total risk, which included setting up macro-infrastructure.
"Maybe we will not do it again, but it was a way to get a head start," he jokingly said, adding that the company's expenditure for the first 40 months of the project had been $20 million a month.
Benton said Lippo Karawaci was the only city with potable water, which the company provides by buying the water from the government and treating it in its own plant.
"The residents take it straight from our purification system at pressure," he said.
With an investment of $20 million, the town management is able to provide waste processing centers and a sewerage system instead of individual home septic tanks.
Earlier this year, Lippo's Town Development Management (TMD) company admitted it was disposing of household and hospital waste into Sabi River, but insisted that the waste had been treated and was environmentally safe.
All of the facilities do not come cheap for the residents. "They pay 15 percent more than PAM Jaya's (rates), because the quality is better," Benton said.
He said residents were also charged monthly fees ranging from Rp 30,000 to over Rp 1 million depending on the taxable value of their property, which covers water and sewage processing, garbage collection, street cleaning, tree pruning and landscape maintenance.
The management aims to accommodate residents' needs through a biannual census. "We have a 24-hour complaint desk that receives 1,000 calls a week," he added.
Lippo Karawaci is committed to seeing the project through.
"We are now renting 500 hectares of land, if we want to see that appreciate in value we cannot go anywhere," he said. "We have to maintain the city." (003)