Batam in Brief
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Batam NOW AND TOMORROW COMPILED BY THE SMILING HILL TEAM, BUKIT SENYUM, BATU AMPAR, BATAM 29457 - Tel +62 778 450 183 Batam in Brief BATAM has undergone a remarkable transition over the past four decades and, in particular over the 15 years from 2000. From a little-known island with around 6,000 ‘Sea People’ living in fishing kampongs along the seashore and a single state-owned oil industry services base, it has become a modern island city of around 1.5 million people and a locomotive of industrial growth for the region. This is a brief bullet points snapshot of the Batam of today and a glimpse of what the next decade is likely to bring. This summary of current facilities and developments and proposed projects is based on publicly available information as at mid- 2015 – it is highly probable that further change and growth will come with the advent of the ASEAN Common Market to be implemented from December 2015 through 2018. The ASEAN integration of South-east Asian economies will create a market-place of some 620 million - larger than the European Union or North America - the third-largest labor force in the world behind China and India, and a growing consumer class. Existing trade and business barriers will be eased allowing easier movement of goods and skilled labor between the 10 participating countries. Current foreign investment rules also will be eased. With its strategic location and established industrial base and infrastructure Batam is sure to be a major beneficiary. Batam 2015 LOCATION – Batam is an island city and centre of heavy industry and manufacturing within the Riau Islands Province of Indonesia strategically located 20 kilometres (12 miles) across the Strait from Singapore. AREA – Batam (incorporating the Barelang islands of Rempang and Galang) covers 715 Sq km which is about the same as the area of Singapore (718 Sq Km). GOVERNMENT – From the 1970s until 2000 the development and administration of Batam was under the control of the central government in Jakarta through an appointed Batam Industrial Development Authority. Decentralized local Government commenced from 2001 with the establishment of a city administration and an elected regional people’s assembly (DPRD). POPULATION – in 1970 Batam had a population of only about 6,000 - mainly ethnic Malay “Sea People”. By 2010 the population exceeded a million. The 2015 estimate is around 1.5 million. Over the inter-census period to 2010 the population grew at more than 11% a year – the fastest growth of any region in Indonesia. Batam is now estimated to be growing at about 8% a year. It is the third largest city in Sumatra and in 2012 ranked as Indonesia’s 12th largest city. It is forecast to be 7th or 8th after the next census. (By way of comparison Perth and Brisbane with populations of just over 2m are growing at around 2.5%.) SPECIAL ECONOMIC ZONE – Batam has been designated a Special Economic Zone (SEZ) since 2007 under an agreement between the Governments of Indonesia and Singapore. This makes it easier for capital, materials, components, products and labor to move between Singapore and Batam and has streamlined approvals and licensing processes for new investment. FREE TRADE ZONE – The Indonesian Government formally declared Batam and the neighboring SEZ islands of Karimun and Bintan a Free Trade Zone from January 2009. This provides exemptions from Customs rules and a range of taxes including import duties, sales tax, value added tax, and taxes on luxury goods to further boost investment. INVESTMENT – The Batam SEZ administration puts cumulative direct investment into the Batam economy at almost US$18 billion as at the end of 2014 with nearly Batam 2015 Horizon half of this being direct investment by foreign companies. Some 1,700 fast ferry - foreign companies from 38 countries have established operations in one of Batam. four major operators ECONOMIC GROWTH – Industrial development in Batam began in the early 1970s with a services and logistics base for the national oil company Pertamina. Over the next 30 years it became recognized as the fastest growing economic region in Indonesia and one of the fastest growing regions in South-east Asia. Regional economic growth rates ranged from 5.8% to 8.3% a year over the period from 2010 to 2014. EXPORTS – According to the Batam Indonesia Free Trade Zone Authority, non-oil and gas exports from Batam averaged around US$9 billion a year over the five years 2010 to 2014. FOREIGN VISITORS – International tourist and business visitors to Batam totalled 1.45 million in 2014. This was exceeded in Indonesia only by Bali (3.24 million) and Jakarta (2.24 million). AIRLINE SERVICES - Batam’s Hang Nadim airport recorded around 5..5 million passenger movements in 2014, making it Indonesia’s 7th largest airport. Daily passenger aircraft movements averaged 116 flights per day. Domestic services are increasing and direct international flights to South-east and North Asian ports are being introduced. ERRY SERVICES – Modern fast ferries provide more than 120 crossings each way between Singapore and five Batam terminals every day. Ferries run from around 6 am until around 9.30 pm. Passengers both ways total about 10,000 on weekdays with this increasing by as much as 100% at weekends. Other Batam ferry terminals provide links to nearby islands, particularly Bintan and Karimun for domestic passengers and vehicles. FOREIGN WORKFORCE – As at 2014 there were almost 6,000 ex-patriot workers in Batam. The formal Indonesian workforce was estimated at 330,000 plus. Batam has a significant informal economy. Batam Centre Ferry Terminal - one of five international terminals Below - New US $70m gas fired power station nearing completion at Tanjung Uncang industrial area. The undersea gas pipeline to fuel the plant is costing a further US$50m. Batam electricity consumption is increasing by around 13% a year due to increasing population and the growth of industry. Infrastructure ELECTRICITY – Demand for electricity in Batam is estimated to be increasing by around 13% a year, reflecting both population growth and growing commercial and industrial consumption. The present electricity supply of some 510 MW (2014) is scheduled to be increased to more than 700 MW by 2017. WATER – Batam’s water is supplied from six man-made reservoirs with a treatment works meeting WHO quality standards and a capacity of 2,903 litres per second. A new seventh water supply dam is nearing completion (2015) at a cost of some US$30m. ROADS – Batam has around 1,200 km of sealed roads (2014). This is more than 50% of the total for the whole Riau Islands Province yet Batam is only 1.9 percent of the total area of the Province. The impres- sive Barelang Bridges link Batam with Rempang and Galang islands. ABOVE - Pax Ocean shipyard AIRPORT – Batam’s Hang Nadim International Airport has a current at Tanjung Uncang, one of capacity of 6 million passengers a year and works are underway to more than 70 Batam yards increase this to 8 million. Hang Nadim has the longest runway in Indonesia at just over 4 kilometres and is capable of handling Boeing 747 LEFT - Busy apron at Batam’s and the Airbus 380 aircraft. Services from Batam are predominantly to Hang Nadim Airport - more domestic ports around Indonesia. There are currently international than 5.5m passengers a year services to Malaysia and charters to Saudi Arabia for Mecca pilgrims. There are plans for international flights to other South-east Asian and North Asian ports to commence in 2015. The airport also handles heavy volumes of air freight from throughout Indonesia. SEAPORTS – Batam has five International ferry terminals plus domestic terminals and four cargo ports. Heavy volumes of freight move constant- ly between Batam and Singapore and to and from Batam and other Indonesian ports. COMMUNICATIONS – Major Indonesian telecommunications providers are present in Batam with advanced fibre-optic cabling, wireless links and telcom data services providing ever faster broadband connections. International backbones are accessed via undersea cable systems through Sumatra, Jakarta and Singapore. BATAMINDO industrial estate at Muka Kuning - light manufactures Infrastructure INDUSTRIAL PARKS - There are 22 industrial parks in Batam housing more than 1,000 foreign companies and 10,000 local companies. A who’s who of multi-national companies is engaged in heavy fabrication and manufacturing ranging from ship-building, oil rigs and dump trucks to sailing dinghies, electronic chips, packaging and fashion handbags. Larger industrial estates have their own water supply and waste water treatment works, workers dormitories, executive housing and supporting commercial facilities such as banks, restaurants and food courts, shops, sport centers, and medical facilities. Some of the larger industrial estates also have their own electricity supply system. SHIPYARDS – Batam is Indonesia’s major ship building and repairs centre and becoming one of the major industry players South-east Asia Massive J Ray Mcdermott oil and gas industry with more than 70 operating shipyards and others planned. The Batam yards build mainly smaller vessels (service vessels, drill ships, patrol boats, tugs, barges, etc) and undertake conversions and repairs. They also fabricate jackets, topsides, modules and other heavy structures for the oil and gas industry. HOSPITALS AND MEDICAL – Batam has five major government and private hospitals plus a number of smaller hospitals and health clinics in local communities and outlying areas. There also are many private medical practices, usually with associated pharmacy services, and labora- tory services. A major national in-service training centre for health professionals opened at Marina City, Batam in 2011. EDUCATION – Batam has six private universities and a public Polytechnic providing tertiary education. The universities are generally small campus- es typically offering a limited range of degree and diploma courses in law, business management, accounting, marketing, languages, computing and IT.