One Special Economic Zones in Indonesia - Photo by SEZ National Board

JAKARTA (TheInsiderStories) – Indonesia’ government is ready to develop two special economic zones (SEZs) worth Rp11.9 trillion (US$838 million) which is projected to start early next year, said officials today (08/15). These two SEZs are Likupang tourism in North Sulawesi and Kendal industrial estate in Central Java.

Chairperson of the National Council for Special Economic Zones and Coordinating Minister for Economic Affairs, Darmin Nasution, said Likupang is located in North Minahasa Regency, North Sulawesi, which was proposed by PT Minahasa Permai Resort Development (MPRD), a subsidiary of Sintesa Group.

While the Kendal SEZs is located in Kendal Regency, Central Java and was proposed by PT Kendal Industrial Park (KIP), which is a joint venture between two industrial developers in Southeast Asia namely Sembcorp Development Ltd and  PT Kawasan Industri Jababeka Tbk (IDX: KIJA). Sembcorp is a company that is part of Temasek Holdings and is listed on the Singapore Exchange.

Paquita Widjaya, MPRD’s Project Development Head explained, the proposal for the establishment of the Likupang was acceptable because it had completed all the required documents. The company also has land with 197.4 hectares.

The company is committed to investing in the regional development of Rp2.1 trillion. Then the investment of business actors is targeted at Rp5 trillion. In the Likupang, resorts, accommodation, entertainment and MICE will be developed. Outside the SEZs area, Wallace Conservation Center and Yacht Marina will also be developed. A total of 65,300 workers will be absorbed.

Based on proposer calculations, Likupang can increase the absorption of foreign tourists in North Sulawesi by 162 thousand people in 2025. This number absorbs about 16 percent of the target set by the local government, which is one million foreign tourists in 2025. In addition, Likupang is predicted to be able to contribute to foreign exchange income, in 2030 amounting to Rp22.5 trillion.

Likupang is planned to be developed in three stages. Phase I will be built on an area of ​​92.89 hectares in a period of three years, 2020 to 2023.

Target investors who will enter in the first three years are Maestro & Partners who will build a luxury resort worth Rp357 billion, One Million Rasa Carpedia will build a beach club worth Rp307 billion, Dune World will build a luxury dive resort worth Rp50 billion, and Artha Prakarana will build a nomadic resort worth Rp36 billion.

Meanwhile, KIP’s Executive Director Didik Purbadi said, the Kendal SEZs will have 1,000 hectares of land. The land has been controlled for 715.9 hectares (71.6 percent). Its main activities are export-oriented industries & supply chains such as textiles and clothing, furniture, food and beverage, automotive and electronics; Import substitution industries include textiles and clothing, food and beverages; and Export-oriented logistics that are based on 4.0 such as integrated smart port, logistics 4.0.

The investment value for the construction of regional infrastructure and facilities is Rp4.8 trillion. The proposer is also committed to bringing in foreign direct investment reaching $600-700 million over the next three years. Until 2025, Kendal SEZs will absorb 80,000 workers.

Nasution adds, regarding the Tanjung Api-Api SEZs which was also discussed in the SEZs National Council Session, it was decided that an area would be changed from the original area to an area that was more ready and close to the Tanjung Carat Port development plan as proposed by South Sumatra government. This proposed change will be set forth in the amendment to Government Regulation No.51 of 2014 which forms the basis for establishing the Tanjung Api-Api as soon as the proposal documents are completed.

US$1=Rp14.200

Written by Lexy Nantu, Email: lexy@theinsiderstories.com