East Java Offers US$4 Billion Suramadu, Madura Projects

Photo by BKPM

JAKARTA (TheInsiderStories) – Local Government of East Java through The Surabaya-Madura Regional Development Board (BPWS) offered new projects worth Rp53.1 trillion (US$4 billion) to investors, an official said on Monday (31/7).

The projects located in Surabaya Madura (Suramadu) Bridge areas and Madura Special Region. One of the projects which offered to investors is Tanjung Bulu Pandan Port project with a land area of 250 hectares (Ha) witn an estimated investment of Rp17.2 trillion.

“Tanjung Bulu Pandan Port has attracted Chinese and Korean investors,” Agus Wahyudi, Caretaker Deputy Planning of BPWS said in Suramadu Investment Gathering on Monday (31/7).

In addition, the agency also offered other projects such as 15.3 kilometers toll-road with total investment worth Rp2.6 trillion, 284 Ha of Labang Industrial Area Rp17.5 trillion, and 356 hectares of Klampis Industrial Estate worth Rp6.6 trillion.

In addition, there are also two central business district (CBD) projects worth Rp4.5 trillion and two housing projects worth Rp4 trillion. A subsidiary of state owned construction PT Hutama Karya which focus in residential and commercial property, PT HK Realtindo has committed to invest.

“We also encourage investors to invest in tourism because there is a good scenery between two islands. There is also Chinese investor who are interested to build tourist attractions, including theme park,” he added.

In addition, it also offered the Central Business District project Rp4.5 trillion, Rp 4 trillion two housing projects, the development of the coastal areas for tourism in an area of ​​18.5 ha of Rp662 billion and two rest area of ​​40 hectares with a total investment of 150 billion.

Investment Promotion Deputy BKPM Himawan Hariyoga said in his speech, Suramadu Investment Gathering is a form of central government support to regional efforts to develop its investment.

According to him, with the investments flow in the longest will be able to increase the realization of investment in East Java province. According to BKPM data, in the first half of 2017, the province of East Java in the third position with an investment of Rp33,9 troliun or 10.1 percent of the total investment into the country.

Recently, BKPM offered project worth of Rp 217 trillion to Chinese investors. Deputy of Investment Planning of BKPM Tamba Hutapea explained, that the projects namely Port of Kuala Tanjung and Integrated Tourism Projects of Lake Toba in North Sumatra, Bitung Port in North Sulawesi, 15 projects Power plants, 5 toll road projects and 5 projects under the Infrastructure Financing Non-State Budget Scheme.

“The value of the offered projects reaches Rp217 trillion consisting of toll road projects amounted to Rp42 trillion, sea port project worth Rp60 trillion, power plant Rp100 trillion and Integrated tourism resort project amounting to Rp15 trillion, “he said in an official statement.

From the BKPM data, China is one of the main contributors to the realization of investment. In first half of 2017, China is ranked third with an investment of US$2 billion. China’s position under Singapore is in the first position with $3.7 billion realization and Japan $2.8 billion. Chinese investors shown their interest invested in East Java Province.

China Everbright International Limited (CEIL) is exploring cooperation with the Government of Sidoarjo Regency. If the assessment is successful, the Chinese company will invest for the first time in Indonesia worth Rp 2 trillion. CEIL planned to build a waste processing plant with modern operational systems. Each factory needs a minimum of 8 hectares of land.

According to BPWS study, all of industrial area, including CBD development has benefit-cost ratio (BCR) above 1 and internal rate (IRR) return above 13.80 percent. While investment in industrial areas have IRR of 31.05 percent.

From the economic side, it said, Madura has many economic potentials such as salt, corn, coconut, tobacco, fish, fruit, and cattle. Unfortunately, there is no industry in Madura to absorb the basic products. Furthermore, the basic infrastructure in Madura is relatively adequate compared to other area in outside Java.

In terms of labor, there are facilitating the improvement of the quality of human resources with training and providing certificates up to 3,000 people. The regional wages in Madura, he said, are also competitive compared to West Java.

Acceleration of Suramadu development is done through the integration of development of economic growth and infrastructure, infrastructure and Human Resources within the framework of regional development.

“The first thing that needs special attention in this meeting is the Surabaya City Government request for Suramadu Bridge for the Surabaya side of around 600 ha to be removed from the authority of the Suramadu Regional Development Board (BPWS),” said Coordinating Minister for Economic Affairs Darmin Nasution.

As stated in Presidential Regulation No. 27 of 2008 on BPWS, one of the main tasks of the agency is to build and manage the Suramadu Bridge Area, covering around 600 ha of Surabaya side and around 600 ha of Madura side.

On the Master Plan for the Acceleration of Suramadu Area Development and other technical matters such as the enactment of a Government Regulation to regulate the use of tariffs levied from toll roads, BPWS steering committee structures and the inauguration of selected BPWS chairmen, will be discussed in smaller teams.

(Written by Rahmat Fiansyah, Email: rahmatfiansyah@gmail.com)