JAKARTA (TheInsiderStories) – The National Council for Special Economic Zones approved two new special economic zones (SEZ), namely the Lido in West Java and the Java Integrated Industrial Ports and Estate (JIIPE) in East Java, said senior economic minister last week. Until the end of last year, the country had managed 15 SEZs across the archipelago.
Coordinating minister for economic affairs, Airlangga Hartarto, explained, the proposed Lido is a tourism SEZ with a business plan for world-class theme parks, golf courses, retail and dining, accommodation, and creative economy develop by MNC Group. The presence of theme park is predicted to boosts the number of domestic and foreign tourists to 63.4 million people until 2038, or in average of 3.17 million visitors per year, and foreign exchange inflows around US$4.1 billion over 20 years.
In addition, Lido is projected to attract a investment up to $2.4 billion and JIIPE located in Gresik city is projected to be able to bring in an investment around $16.9 billion. The JIIPE SEZ is planned for business development in the metal, electronics, chemical, energy and logistics industries.
In Lido, there are a big plan pioneered by PT MNC Land Tbk (IDX: KPIG), a listed company owned by businessman, Hary Tanoesoedibjo, and former President of United States, Donald Trump’ company. The MNC Lido City is developing a 3,000 hectare integrated residential, commercial, tourist destination and resort area in Bogor, West Java.
The company in collaboration with the government will also build a transit-oriented development and additional transportation connectivity including toll road and light rapid transit. While, JIIPE areas consist of a 2,933-hectare industrial zone, a 400.10-hectares port, 765.77-hectares residential estate and a 1,761.40-hectares industrial complex. The industrial zone is powered by 13 megawatts of electricity supply supported by state-owned gas distributor PT Perusahaan Gas Negara Tbk (IDX: PGAS).
The industrial complex can accommodate companies from the automotive industry, heavy and palm oil based industries, and SMEs, which are expected to provide 500,000 jobs. The companies that have established their presence in the area are including PT Clariant Indonesia, PT UnichemCandi Indonesia, PT Nippon Indosari Corporindo Tbk (IDX: ROTI), PT Hextar Fertilizer, and PT Adhimix Precast Indonesia.
The production are projected to be able to contribute of $10.1 billion revenues per year when fully operational, as well as import substitution for metal and chemical industrial products. The East Java provincial government has stated the readiness of Gresik accessibility in relation to the Krian Legundi Bunder Manyar toll road, which has been operating.
In the meeting, the board also gave separate notes the 15 SEZs that had been established consist of nine industrial SEZs and six tourism SEZs. The areas are Arun Lhokseumawe (Aceh), Sei Mangkei (North Sumatra Province), Tanjung Api-Api (South Sumatra), Galang Batang (Riau Islands), Tanjung Kelayang (Bangka Islands and Belitung), and Tanjung Lesung (Banten).
Then, Mandalika (West Nusa Tenggara), Maloy Batuta Trans Kalimantan (East Kalimantan), Palu (Central Sulawesi), Bitung (North Sulawesi), Morotai (North Maluku), Sorong (West Papua), Singhasari (East Java), Likupang (North Sulawesi), and Kendal (Central Java). The SEZs has resulted in an investment commitment of Rp70.4 trillion ($5.03 billion) and has been realized around Rp23.1 trillion by the end of 2020.
The biggest investment came from the Galang Batang SEZ, which was officially operational at the end of 2018, then the Sei Mangkei, and also the new Kendal, just set to become SEZ at the end of 2019. Last year, several SEZs have contributed to the country’ foreign exchange revenues with total values Rp5.2 trillion.
The Government of Indonesia expects 10 more industrial zones to offer a direct construction incentive’ to investors who agree to build their facilities in these specified zones.
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