RI to finish study on free trade zone soon

RI to finish study on free trade zone soon

SINGAPORE (Dow Jones): Indonesia expects to complete within months a study on how to turn several islands near Singapore into a free trade zone, Trade and Industry Minister Luhut Pandjaitan said.

Luhut told Dow Jones Newswires in Singapore on Tuesday that President Abdurrahman Wahid's government is committed to creating a free trade zone.

A study to set policies for making this possible should be finished "within two to three months," he said.

Places that might be included in such a zone are Batam, Bintan and Karimun islands close to Singapore, plus the nearby port of Dumai on the eastern coast of Sumatra island.

The Indonesian government - struggling to attract new investors due to the country's political and economic uncertainties - hopes that the islands close to Singapore can attract significant investment.

The trade minister, who Tuesday relinquished his position as Indonesia's ambassador to Singapore, said a newly-announced investment on Batam "shows there is a strong interest in Indonesia."

He witnessed the signing of a joint venture agreement between PT Citra Tubindo, a Jakarta-listed pipe maker, and a unit of Singapore's state-run SembCorp Logistics Ltd. to set up a network of offshore oil and gas logistics supply bases throughout Indonesia.

Under the agreement, the first base will be on Batam, 25 kilometers from Singapore. Construction of that base, in which US$1 million will be invested, will begin before the end of the year.

Kris Wiluan, president-director of Citra Tubindo, said he anticipates that the new joint venture will invest S$20 million over several years in a series of bases.

Singapore Offshore Petroleum Services, the SembCorp unit, will own 70 percent of the new venture, with Citra Tubindo holding 30 percent.

Luhut said the joint venture "shows the serious intent of Singapore to invest and help Indonesia overcome (its) crisis."