Overlapping levies upset developers

Overlapping levies upset developers

JAKARTA (JP): Industrial estate developers complained on
Tuesday of overlapping levies by local administrations and other
parties, saying the charges would discourage investors.

Chairman of the Indonesian Industrial Park Association Halim
Shahab, said high costs resulting from the levies on industrial
parks had made industrial parks less competitive than facilities
in other countries, especially those in Malaysia.

"Investors operating in industrial parks should instead be
provided with incentives to minimize the costs of their
investment," he said at a seminar on the role of industrial parks
in generating foreign exchange.

Halim's complaints were echoed by Gunawan Hadisusilo, the
ministry of home affairs' inspector general for the development
of industrial parks, integrated economic development zones and
special projects.

Gunawan acknowledged that many regulations imposed by local
administrations contradicted a government bid to encourage local
and foreign investors to develop their businesses.

Local administrations imposed local levies on investors
operating in industrial parks in order to collect more revenue,
he said.

He cited investors in Jatiluhur Dam industrial park having to
pay water fees both to local administrations and to the operator
of the dam, the state-run Jatiluhur Authority.

"(The charges) contradict the government's spirit to offer
incentives such as tax reductions which minimize investors'
operational costs."

Occupants of industrial parks have also been forced to pay
security fees and other levies to village heads or other
authorities at the subdistrict level, he said.

Halim said the economic and political turmoil had brought the
industrial parks to the verge of bankruptcy.

Over ninety percent of parks had been unable to attract
occupants since the crisis began, he said.

"Some industrial parks in Medan, North Sumatra and Sulawesi
are still able to attract new occupants whose operations related
to agribusiness, but the number is too small," he said.

Halim said currently 172 developers had obtained approval to
develop 52,882 hectares, but so far only 46 of the parks were
conducting operations.

Gunawan said the reduction in flight routes by domestic
airlines had posed another blow to industrial parks, especially
those located in eastern provinces, discouraging investors from
opening businesses. (gis)