Mon, 11 Sep 1995

'Time to adopt land banking concept'

JAKARTA (JP): A member of City Council has urged the city administration to adopt a land banking concept, in a bid to help reduce land disputes in the future.

Lukman F. Mokoginta, chairman of the Indonesian Democratic Party faction, said over the weekend that the increasing demand for land in urban areas, as a consequence of the rapid growth of development, requires the best management of land.

He said that the land banking concept, as an alternative in land management, is urgently needed. "This is the right time to go with land banking," he said.

Under the land banking concept, city administration can appropriate certain plots of lands, which will later be sold at reasonable prices to private companies for the establishment of their projects.

He said that the concept used to be implemented by city administration, but failed to continue, due to land appropriation by large-scale businessmen.

Due to the absence of the land banking concept, land prices immediately rise in certain areas where the city administration plans to build public facilities, such as roads. As a result, the land is later appropriated by large-scale companies at the expense of the public.

Therefore, it is now time to discuss the mechanism of the land banking concept by involving a number of related institutions, he said. "We do need the best concept of land management," he added.

Lukman also suggested that city administration revise the regulation on existing land appropriation permits, which enable them to manipulate tax payments.

According to the regulation, only transactions of land over 5,000 square meters in size are subject to tax payments. This measurement should be lowered to 2,000 square meters to discourage businessmen from making transactions covering smaller land areas to avoid tax payments. (32)