Many planned investments in Jakarta relocated
JAKARTA (JP): About 40 percent of planned investments and expansion projects in Jakarta have been canceled and relocated to other provinces due to limited industrial land sites, an official said.
The chairman of Jakarta's Investment Coordinating Board (BKPMD), Ery Chajaridipura, told a workshop yesterday that most of the planned investments and expansion projects have been relocated to West Java, particularly the Tangerang and Bekasi regencies, where there are already industrial estates and sound infrastructure facilities.
"If (Jakarta) manages to get 80 percent of the planned investments and expansion projects, it is already a good job," Ery told the meeting.
The one-day workshop -- held jointly by the Investment Coordinating Board (BKPM), BKPMD and PT Sucofindo Masterlist Verification Division -- discussed the procedures for submitting the master lists of capital goods and raw materials needed to register projects using the fiscal facilities provided by BKPM.
Ery said that so far, none of the canceling investors have relocated their projects overseas.
"We will not mind if they relocate their projects to other provinces, but it would really become a concern if they started thinking about going to another country," he said.
Commenting on the business climate in Jakarta, Ery acknowledged that his office lacks sound information and needs plenty of input from investors here.
Without accurate information from the private sector, he said, the local administration will be unable to identify the problems the businesses face.
"How can we know when an investor has a problem if the investor doesn't tell us? If the business can't be expanded due to limited space, for example, we will give information on the provinces to which it can be relocated," Ery said.
Nonetheless, he acknowledged that the biggest problems that most businesses are likely to complain about are the lengthy trade and investment procedures that lead to high costs.
He urged businessmen and investors to refrain from engaging in practices that may encourage these high costs. Such practices include bribing government officials to speed up or cut short registering procedures.
"Of course, government officials should be the first ones to stop such practices. But businessmen and investors should also discourage them," he said.
BKPM Secretary Mochtar Ollong said in his opening speech at yesterday's workshop that during the period between 1967 and Sept. 15, 1996, domestic investment approvals in Jakarta reached 1,648 projects with a total value of Rp 55.3 trillion (US$23.6 billion at current rate), while foreign investment approvals reached 1,350 projects worth $24.2 billion.
Indonesia started implementing its law on foreign investment in 1967.
For this year alone, as of Sept. 15, domestic investment approvals in the city reached 158 projects worth Rp 12.8 trillion, while foreign investment approvals totaled 265 projects valued at $2.9 billion.
Mochtar said the number and value of Jakarta-based investments are below that of West Java. He attributed this to the limited industrial land sites in the city.
"Therefore, additional investments in the primary and secondary sectors are now very limited in Jakarta. The city now relies more on the tertiary, or services, sector," he said. (pwn)