JAKARTA (TheInsiderStories) - Indonesia plans to set up three Special Econonomic Zones (SEZ) in this year to accelerate the developing of regional economic, said one senior official. In a coordination meeting led by Coordinating Minister for Economic Affairs Darmin Nasution the National Board for SEZ has decided that Arun Lhokseumawe in Aceh will soon be proposed to the President Joko Widodo to set as new SEZ through government regulation.
“Arun Lhokseumawe already qualified from all aspects, so it will soon be proposed to the President,” Nasution said after a coordination meeting at the office of Coordinating Ministry for Economy on Monday.
The consortium of state-owned enterprises and regional enterprises PT Pertamina, PT Pupuk Iskandar Muda, PT Pelindo I and PT Perusahaan Daerah Pembangunan Aceh committed to invest up to US$3.8 billion, or around Rp 50.5 trillion in the next 10 years in the Arun Lhokseumawe with broad reach 2,622 hectares of land. The new SEZ is expected to absorbed 40,000 labor.
Nasution explained that the business plan in Arun Lhokseumawe include the development of energy sector industries (oil & gas), LNG regasification, the LNG hub and trading, LPG hub and trading, Mini LNG Plant power plant with the development of environmentally friendly power plants, petrochemical industry cluster development is environmentally friendly, agro-industry support for food security, utilization of agricultural raw materials and the development of various types of business agro industry and its derivatives.
The development of logistics infrastructure to support the input and output of oil and gas industry, petrochemical and agro industry, through the improvement of infrastructure in ports and harbors international standard. As well as the cement industry producing paper bags (kraft paper).
Nasution continued, in the coordinating meeting also discussed the proposed SEZ Galang Batang, Bintan, Riau Islands, and the proposed SEZ acid Island, Karimun, Riau Islands. According to Coordinating Minister, Bintan can not be proposed to the President because there are still some administrative issues that need to be cleared first.
“Actually Bintan is also ready. But there are one or two things that need to be cleared first, then immediately we propose also to the President,” He said by addded Bintan has a land area of 2,590 ha and will develop by PT Alumina Bintan Indonesia.
In this area, the company wants to develop the processing and refining of bauxite ore into alumina, alumina processing into aluminum ingots (smelting), power plant development, and the development of the port of loading and unloading. The investment value of Rp 36.25 trillion, with estimates of labor that can be absorbed 23,200 people.
While the proposal of Karimun SEZ still needs to be discussed more deeply. Proposed new zone has 351 hectares of land area with the proposer PT Nusatama Properta Panbill for oil and gas, cold storage, and ship yards.
Secretary of the National Council of KEK, Enoh Suharto Pranoto adding, the reason government not approve the Bintan cause some issues like local government’s commitment to provide the facilities and investment incentives to investors. The second problem is the location permit should be issued by the Ministry of Agricultural and Spatial Planning/National Land Agency as well as the reclamation permit from the Ministry of Transportation. For Karimun, Enoh explained the problems faced is the Spatial Plan is in the forest area and should be revised to an industrial area.
Indonesia has develop 14 SEZ so far. The last SEZ was develop are in Belitong Timur for tourim and in Sorong, Papua for industry. The government targeting to develop 25 SEZ until 2019.