President JokoWidodo (left) and Yogyakarta governor Hamengku Buwono X (second left) shovel sand in the “Babat Alas Nawung Kridha” groundbreaking ceremony for Yogyakarta International Airport on Friday (27/1) in Jangkaran village, Temon district, Kulon Progo regency, Yogyakarta. The ceremony was also attended by Transport Minister Budi Karya Sumadi (second right), Coordinating Maritime Affairs Minister Luhut Binsar Pandjaitan (third right) and PT Angkasa Pura I executive director Danang S Baskoro (not pictured).
Breaking ground on the construction of an airport in Kulon Progo regency by President Joko Widodo at the end of January 2017 was like a drum marking the start of a race. The international airport will become a magnet for businesspeople to invest in the westernmost region of Yogyakarta Special Region.
In line with the certainty of the airport’s development, potential investors are competing to look for land for building businesses to support the activities of the airport, designed with a capacity of 14,000 passengers per day. The Investment and Integrated Services Office (DPMPT) of Kulon Progo regency is accommodating the investors’ interest in doing business through several breakthrough programs.
Eddy Margo Ghozali, director of PT Sentolo Isti Parama (SIP), is one investor who is enjoying DPMPT Kulon Progo’s services. Since the beginning of 2015, his company had tried to prepare land to build an industrial estate in the regency’s Sentolo district.
The limited availability of land and obstacles in land clearing had hampered the development of the industrial estate. By the end of 2016, the company had managed to acquire only about 30 hectares of land in the villages of Sentolo and Banguncipto. For the industrial estate to be feasible, PT SIP needs at least 140 hectares.
Eddy related the obstacle to DPMPT Kulon Progo, which responded immediately by establishing a land clearing team consisting of internal elements of its office, including district and village heads as well as local community figures. As a result, PT SIP has acquired 16 hectares of land in the first quarter of 2017.
"DPMPT Kulon Progo’s coordination facilitates the work of investors. I have never experience this in other areas, where the local administrations not only take care of licensing, but also help whenever there are problems in the field," Eddy said.
DPMPT Kulon Progo chairman Agung Kurniawan said a number of breakthrough programs had been created to maintain a comfortable and healthy investment climate in the region.
By the end of 2016, total investment realization in Kulon Progo reached Rp 1.13 trillion. More than Rp 635 billion were from foreign investment, and the remaining Rp 400 billion from domestic investment.
Since the airport’s certain development in early 2017, total foreign investment in Kulon Progo from January to June 2017 alone reached Rp 14.16 billion, while domestic investment reached Rp 8.59 billion.
Agung expects investments to continue to soar, because more than 20 potential investors were still in the process of obtaining licenses that they applied for in the first semester of 2017.
The largest investment is in the housing sector. In 2016, 19 housing developers registered their investment in Kulon Progo, while in the first semester of 2017, four new developers jumped in and another is in the process of obtaining its license.
"The potential of such large investment, if they are not accommodated and managed properly, will of course cause losses to the region," Eddy said.
Breakthrough programs
Since early 2017, DPMPT Kulon Progo has established a number of breakthrough programs to maintain a climate conducive to investment in the region.
The programs will not only accommodate investors with large capital, but will also make it easier for the community to process licensing. For example, through a simultaneous licensing package, investors can apply for the licenses they need without delay.
Records at the Kulon Progo Integrated Service Office shows business licensure processes for trading and industry, as well as company registration through a single channel.
Moreover, by applying information technology, the Kulon Progo administration launched in mid-July a DPMPT mobile app with informational facilities for various licensing and investment potential for its users.
Unfortunately, according to Agung, DPMPT Mobile has not been popular among the Kulon Progo community or potential investors in other regions. The office continues its promotional efforts to increase the usage of the app, which has been downloaded a mere dozen times since its July 13, 2017release through Google Play Store.
”In interviews with members of the Kulon Progo community, most of them were more satisfied and convinced of processing their licenses face-to-face with our officers," Agung said.
Aside from promoting DPMPT Mobile, Agung strives to continue improving the app’s capabilities, through which users can already process early registration and obtain information on requirements and documentation they must submit to the Kulon Progo Integrated Service Office in applying for licenses. Agung believes there was a possibility for uploading licensure documents through the app.
"For the time being, the documents are still being processed through hard copies with handwritten signatures. However, we will observe the needs of the community and potential investors before developing this application further," he added.
Reviews
Gadjah Mada University’s Center for Economic and Public Policy Study head Tony Prasetiantono said in Yogyakarta that in addition to improving investment services, the Kulon Progo administration had to review Kulon Progo Bylaw No. 1/2012 on Regional Spatial Planning.
"Aside from making investors feel comfortable, the local administration also has to make investors feel secure by not letting them to bump into [obstacles of] existing rules," Tony said.
Built on aplot of 587 hectares, the airport requires a 10-kilometer buffer zone for its activities. This buffer zone will help increase economic activities in the airport’s surrounding area up to a radius of 20 kilometers.
"The local administration also has to be ready to anticipate the possibility of Kulon Progo airport’s expansion within 5-10 years after beginning operations," said Tony.
It is expected that through the DPMPT Kulon Progo’s breakthrough programs, the regency’s international-class airport will be supported by world-class facilities and infrastructure.
