Special Economic Zone: West Java readies 4 new SEZs

This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.

Bisnis Indonesia - Kawasan Ekonomi Khusus: Jabar Siapkan 4 KEK Baru

21 November 2018

By Muhamad Wildan

Bandung — The West Java Provincial Government is increasing preparedness for its Special Economic Zone Team (SEZ) in order to expedite the finalisation of a number of SEZ areas while getting the proposed SEZ ready for operation.

Regional Secretary of the West Java Provincial Government, Iwa Karniwa said that he was following up on the orders of West Java Governor Ridwan Kamil after the Development Planning Meeting for the Regional Medium‐Term Development Plan of West Java last week. "Based on orders from the Governor, I convened an internal coordination and exclusive meeting with SEZ Chair Denny Juanda," he said when contacted by Bisnis, Tuesday (11/20).

Pursuant to the results of the discussion regarding the organisational structure of the SEZ Team, the West Java Government made a proposal to the Governor to replace Denny Djuanda with the Head of the Regional Development Planning Agency (Bappeda) Jerry Yanuar, based on effectivity and efficiency.

“Given Denny's capacity of no longer being the Head of Bappeda, he was proposed to act as the team's advisor, while Jerry fills the position of Chair. Denny will help provide direction and input on various matters regarding SEZs," he explained.

The team will also continue to finalise the proposal process of SEZs from West Java in six regions. According to him, the Pangandaran and Cikidang, Sukabumi SEZs are just waiting for finalization at the Ministry of Tourism.

“The official decision will soon be issued and the ministry is currently in the process of finalizing these two SEZs,” he said.

Meanwhile, four SEZs are currently being prepared, among others such as Aerocity Kertajati SEZ, Majalengka SEZ; Patimban, Subang SEZ; Walini SEZ, West Bandung and Pulau Pesisir, Cirebon SEZ.

"This is the second batch, we are getting it ready in view that the proposal process could take quite a long time for it to be officially considered as an SEZ," he said.

According to Iwa, the West Java Provincial Government will work in parallel to follow up on the process of finalizing the Pangandaran and Cikidang SEZs while simultaneously revising the schedule and structure of the SEZ Team.

“I have asked the Bureau of Economic Affairs and Investment to determine when the process of the 4 SEZ could be completed, we are working in parallel as a follow up on the Governor's request for acceleration," he said.

Previously, Tourism Minister Arief Yahya said that West Java would soon have two SEZs namely Pangandaran and Cikidang within the first semester of 2019.

Cikidang has already prepared 800 hectares of land. With an investment of Rp1.2 Trillion. This area is to be developed as an SEZ with the fusion of science and advanced technology, comprehensive tourism as well as agriculture and health and sustainable lifestyles. “The projection [is the project] could absorb 87,657 workers," he said.

Meanwhile, Pangandaran has an area of 200 hectares in its business design to be built accommodation, commercial, research centres and business and entertainment incubators. "The total investment in the area reaches Rp494 billion and Rp9.8 trillion of business investors and is projected to absorb 36,386 workers," he said.

Amdal (Environmental Impact Assessment) Documents

Thus far, the hardest thing about the SEZ submission process submitted by the region is in relation to the environmental impact analysis document or Amdal. Currently however, these documents could be processed in parallel.

“The SEZ also cuts down on bureaucracy. One stop service, there is no A and B service departments. Mandalika SEZ for example, could obtain Rp30 trillion [Investment] for the reason that the bureaucracy is made simpler,” he explained.

In the same place, West Java Governor Ridwan Kamil said that if Pangandaran and Cikidang were officially determined as SEZs, licensing for this area would be greatly simplified. "This is currently being processed, SEZ are supposed to bypass the bureaucracy that might be too lengthy in the eyes of the world. One in Sukabumi, one in Pangandaran, "he said.

The West Java Provincial Government admits they are reluctant to rush to propose other SEZs to Cikidang and Pangandaran even though the Ministry of Tourism provided them with the opportunity.

According to him, the two regions that have become SEZs must first prove that they are operating optimally; besides, SEZ submissions are not easy matter. "Establishing SEZ is difficult, the prerequisites are strenuous. So let us start with these two, the success of which will be an achievement in itself. So we’re focusing on two [areas] first,” he said.

Previously, the Ministry of Tourism targeted the establishment of three tourism special economic zones or SEZs in each province to encourage ease of licensing, government incentives, and ease of information regarding potential investment.

Hengky Manurung, Deputy Assistant of Tourism Investment of the Tourism Ministry, said that despite the target and support of the Ministry of Tourism, the implementation of SEZ Tourism in the regions is not a program that could run without obstacles.

According to Hengky, many regions have proposed places that people are still unaware of as Tourism SEZs, so it is difficult to discuss the tourism potential of the region and the proposal takes quite a long time.

“The proposal takes 6 months to a year, but it is a process that must be done. Otherwise, it cannot be determined," Hengky said.

The Tourism Ministry, said Hengky, will still play its part to ensure the success of the Tourism SEZ, especially in the development of human resources (HR). “Since we have a Deputy for Institutions, we will help with HR certification. In fact, we already have six schools to accommodate human resources from new economic centers. So we have synergized with the government and the community,” he said to Bisnis in the middle of the 2018 Pesawaran Investment Promotion (PIP) event at the Grand Sahid Hotel, Jakarta, Wednesday (11/14).

Hengky asserted that the launch of SEZ Tourism in the regions would attract investors, accelerate development, and invite foreign tourists to visit the area as have been portrayed by other regions. "Mandalika, Tanjung Lesung, the infrastructure is much more convenient. Tanjung Kelayang now has international flights. Now, many Japanese and Chinese tourists are visiting Morotai, thus attracting more visits and intentions to invest," said Hengky.

Next article: The Mandalika absorbs Rp17 T investment

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