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12 CRITERIA TO QUALIFY AS SPECIAL ECONOMIC ZONE


Monday August 14, 2006

With the islands of Batam, Bintan and Karimun now designated Special Economic Zones, many more governors are urging that the national government appoint similar areas in their respective provinces. 

In response, the national government, in a preliminary move, has stipulated nine requirements that must be met by Regions as qualification before SEZ can be designated in their province, these are: 
 

 

  1. Proposal for SEZ must originate from the Regional Government itself, who must remain committed to the project, and agree to transfer authority of the Zone to a dedicated management.   
  2. The Regional Government must assure consistency in fiscal and non-fiscal policies  
  3.  The proposed Zone is already a center of economic activity and designated an industrial area,  
  4. The area is relatively well developed and is linked to other development areas  
  5. Supporting infrastructure is in place, including roads, airport, sea port, power supply and power network, and water supply of a minimum of one liter/second per hectare. 
  6. The industrial site must be a minimum of 10 hectares, and still expandable,  
  7. Skilled manpower is available around the designated zone;  
  8. The area offers significant economic impact, meaning that it has supporting industries surrounding it, such as in manufacturing, electronics, etc. The zone may also be potential center for logistics or transshipment;  
  9. Its location is near to international seaport and airport  
  10. Its location is close to markets for its products, and near to, or has easy access to raw materials required.  
  11. Its development will not disturb nature conservation areas  
  12. The area is bounded by clear borders, and its security can be monitored.  

 

Chairman of the team for development of Special Economic Zones, Bambang Susantoro, informed the press that these criteria are yet in its preliminary stage, as more may be added, or others reduced. Furthermore, it has not yet been decided whether development of these zones should be based on special legislation, incorporated into other Bills, or could be supported through Presidential Regulations. 

In the latest development, Riau Governor, Ismeth Abdullah, informed that 6 MoU’s are ready to be signed with foreign investors to a total value of US$528 million. Four are investments on Batam, these are Schmidmann, PT Batamfast Indonesia, PT Neptune Marine, PT Cemara Intan Shipyard; one is an investment on Bintan, i.e. Tiong Woon Co. Ltd, and one in Karimun, namely Daeju Construction Engineering Co. Ltd. Another company from
, namely ABG Ltd. is expected to operate a shipyard at an investment value of US$ 15 million that will create 1,500 jobs. (Source: Bisnis