Batam NOW AND TOMORROW - COMPILED BY THE SMILING HILL TEAM, BUKIT SENYUM, BATU AMPAR, BATAM 29457 - Tel +62 778 450 183 - Okusi Associates
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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. Batam Polytechnic also offers degrees in technology sciences. There
are two private international schools and a growing number of public and
private schools offering classes from kindergarten to senior high school.
There is a public Maritime University and an Islamic University in Tanjung
Modern and well equipped Awahl Bros private hospital, Baloi Pinang on the neighboring island of Bintan.
Administration
Precinct
Administration offices are clustered in
a precinct at Batam Centre which
includes the Batam branch of the
Bank of Indonesia, The Immigration
Department, Electricity and Gas
authorities, the law courts, Telcos,
local government offices and the SEZ
and Free Trade Zone authorities.
TOP - Office of the Mayor and Batam city
administration (left) and the People’s Elected
Assembly (right)
ABOVE - City Central Park area, under on-
going development at Batam Centre
LEFT - Striking Telcomsel headquarters,
Batam and RIGHT - Batam Polytechnic.
Resorts
New hotels
Shopping
Harris Resort Hotel at Marina City,
Batam (Above), new Nagoya Hill Hotel
(Right) opened in May 2015, and
(below) I-Hotel Penuin, opened in
early 2015. Seaside pool area at Turi
Beach Resort, Nongsa
EIGHT modern shopping
malls - Interior Mega Mall
(above) at Batam Centre,
ice skating (Left) at Kepri
Mall and (below) Kepri Mall
entrance one.Infrastructure SHOPPING CENTRES – As at 2015 there are 10 major shopping malls in Batam with plans for more. Most have been built and opened since 2006. Another is under construction in the dormi- tory suburb of Batu Aji and there are plans for more. The centres offer a wide range of modern shopping outlets plus, restaurants, food halls, games areas and cinemas. GOLF COURSES – Batam has six quality championship standard golf courses – five of 18 holes and one of 27 holes. There is a further 9-hole resort course at Nongsa and three international standard courses a short ferry journey away on the island of Bintan. Golf enthusiasts from Singapore and Malaysia regularly visit Batam to enjoy the high quality facilities and relatively low green fees and other costs. Golf tour groups travel from as far as Korea, Japan and Australia. HOTELS & RESORTS – Batam boasts more than 75 star-rated hotels more being built and opened every year. There also are many non star-rated properties catering for budget visitors. Major international brands are now moving into the Batam accommodation market with five major brand developments under way in 2015. There are two resort areas on the island with four high quality resort properties located in the Nongsa area to the north and two properties in the suburb of Waterfront City to the south. MOVIE STUDIO – The US$10 million Infinite Studios opened at Nongsa in 2011 with two sound stages and a one-hectare back lot. International features and TV mini-series have been filmed there. Facilities include an animation studio producing syndicat- ed work for local and international markets. The studios comple- ment film and TV production and post-production facilities in Singapore. There are plans for an associated residential resort now being marketed as “The Scene”. Batam View Resort at Nongsa, Batam
Current and Future Projects
As at mid -2015, massive infrastructure developments are underway
and planned for Batam. These include:
AIRPORT – Extensions to Terminal 1 and upgrading of air bridge facilities at Hang Nadim airport
costing US$30 million now underway will take passenger capacity to 8 million a year.
Building of a second terminal and eight extra air bridges is scheduled to
commence in 2017. This will take total passenger capacity to 16 million.
SEAPORT – A US$31 million upgrading of the Port of Batam, the island’s
main cargo seaport at Batu Ampar, is nearing completion. The
project has provided additional wharf space, new cranes and
container handling equipment. The upgraded port will have an
annual capacity of 600,000 twenty-foot equivalent units (TEUs),
compared with 230,000 previously.
LAND DEVELOPMENT - Reclamation,
land clearing, road building and
installation of services for housing and
industrial and commercial developments
is on-going in Batam.HEALTH TRAINING CENTRE -
This National In-service Health
Training Centre opened at
Tanjung Uncang in 2011 and
Projects
provides training for doctors and
health professionals from POWER GENERATION – A US$70m gas turbine power station is nearing
throughout Indonesia
completion at Tanjung Uncang industrial area on the south of the island.
Dual turbines will initially produce an additional 70 MW of electricity. A
US$50 million undersea pipeline has been built and laid from Pemping
Island to fuel the turbines. There are plans for a further 35% expansion
of Batam’s electricity output to meet increasing demand.
ROADS – Work is due to begin in 2016 on a new toll freeway to link
Batam’s key centres and ease increasing traffic congestion. The freeway
will run from the Airport and Kabil industrial estate in the North to Batam
Centre, the Batu Ampar seaport and Nagoya and then south to Sekupang
and Tanjung Uncang. There also will be a link to the Muka Kuning and
Panbil industrial areas. The project is to be built in several sections
simultaneously which authorities say will reduce completion time to two
to three years.
MONORAIL – The preliminary tendering process began in 2014 for a
proposed mono-rail passenger transport system to link Batam’s dormitory
suburbs with industrial estates, the main CBD areas, the airport, health
precincts, resort areas and ferry terminals. The project is planned to be
built progressively over the period to 2027.
DEEP WATER CONTAINER PORT – Long held proposals for development
of a deep water container port at Tanjung Sauh, a small off-shore island
between Batam and Bintan, has been given a high priority in the new
national government’s plans for the development of Indonesia’s maritime
and shipping infrastructure. Planning provides for an initial 2km of
wharves handling four million TEUs (twenty-foot container equivalent
units). It is estimated the project would require an initial investment of
more than US$1 billion. It is intended to be part of a 'sea corridor' along
with the six large ports of Medan, Jakarta, Surabaya, Makassar and
Dragon fruit farm at Barelang - agriculture is a minor activity in Sorong, serving as transit points for smaller feeder ports for exports and
Batam but fishing, fish farming and processing is substantial. imports across the Indonesian archipelago.BATAM TO BINTAN BRIDGE – The Batam Special Economic Zone Island, a 3.9-kilometer stretch connecting Tanjung Sauh and Buau Authority has been sounding out overseas interest in building a Island and a 700-meter stretch connecting Buau and Bintan. It would 6.7-kilometre bridge between Batam and Bintan. The bridge would cost an estimated US$580 million. When linked Batam and Bintan will consist of a 2.2-kilometer stretch between Batam and Tanjung Sauh together represent an area about four times the area of Singapore.
Projects
FERRY TERMINAL UPGRADE – The Harbor Bay Ferry Terminal is
undergoing a major upgrade with new arrival and departure halls, offices,
lounges and retail space. The terminal will link with the new Marriott Hotel
being built on adjacent foreshore land. The original terminal opened on
about six years ago but became inadequate to handle passenger volumes.
OIL REFINERY – Government authorities are reviewing two separate
proposals for the development of oil refineries in offshore locations off
Batam. An Azerbaijan proposal provides for a $4.8 billion refinery, with a
planned production capacity of 600,000 barrels per day. A second proposal
from an Indonesian company is for a US$500 million refinery project on
NIpa Island between Batam and Singapore. National government policy
calls for the development of new refineries around Indonesia with Batam
nominated as a selected regional location.
ABOVE - Artist’s
rendering of Best
Western Condotel and
apartments project at
Kabil - one of five major
branded hotels now
under construction in
Batam.
RIGHT - Construction
progress on Best
Western project as at
June, 2015 Section of Terminal 1at Batam’s Hang Nadim Airport -
Construction of Terminal 2 planned to start in 2017AIRCRAFT MAINTENANCE HUBS – Lion Air has
recently occupied a US$250 million aircraft
maintenance base for its fleets of Boeing
and Airbus jets on land adjoining the Hang
Nadim airport. When completed in 2016 it
will have four wide-body hangars and
employ some 2,000 technicians. Garuda,
the national flag carrier, has announced
plans for a similar facility. The airlines are
relocating maintenance operations to
Batam due to chronic crowding and lack of
available space at Soekarno-Hatta airport in
Jakarta.
BARALANG BRIDGES
BATAM is linked to the nearby
islands of Rempang and Galang
and smoe smaller islands by a
series of six iconic bridges.
These areas are being
developed as part of the total
municiplaity. Two of the bridges
are pictured at right.Branded
Hotels
MARRIOTT
ABOVE - Artist’s rendering of Aston Hotel and Residence
now under construction (see inset) at Pelita, Batam
FIVE NEW major branded hotels are now under
construction in Batam (July 2015) signaling a “coming of
age” of the city’s accommodation industry. They include
a Marriott Hotel at Harbor Bay, an Aston Hotel (and
apartments) at Pelita, a Raddison Hotel at Suka Jadi and
a Best Western Condotel at Kabil. A Starwood Hotel (a
Sheraton brand) is included in the Bliss Park development
near Baloi. Two major unbranded hotels have just opened
(2015) – the Nagoya Hill Hotel and Batam’s second I-Hotel
ABOVE- Rendering of new Raddisson Hotel at Sukajadi at Penuin. The Holiday Inn, Mercure, Harris and Allium
and (RIGHT) construction progress brands are already established in Batam.Apartment Projects
Construction is well
underway on the
Bliss Park project.
The distant building is
the Mansions
apartments
BATAM’S largest apartments project, Bliss Park, commenced in 2014 and is
scheduled to continue until 2022. The first tower of more than 30 storeys is rising
at the rate of two floors a month (and is around 80% pre-sold). The complex will
have 2,000 apartments, 11,000 sq m of retail and commercial space and a 150-key
Sheraton Four Points Hotel plus associated undercroft parking. Batam’s largest
completed Apartments project is the 20-floor Mansions complex which has 600
apartments and also houses a 4-star hotel. It has been occupied from 2013. These
and other big projects are dramatically changing Batam’s skyline.Austin Engineering plant at
Industry Kabil industrial estate
Dump truck bodies
assembly line at
Austin Engineering
at Kabil, Batam
A STEADY FLOW of new industrial undertakings is
being attracted by Batam’s strategic location, low costs,
available labor and developed infrastructure. Recent
newcomers have included the American Caterpillar
multi-national who have opened a US$120 million
assembly and fabrication plant at Tanjung Uncang (and
are already planning expansion) and Yokohama who
are just opening a major belting plant at Kabil.
BELOW - The new fabrication plant for PT Caterpillar Indonesia at Tanjung
Uncang will produce dump truck chassis and bodies for the mining industry
throughout the Asia-Pacific region.Industry
ABOVE- Heavy lift
load out of Curtis
Island module from
SMOE yard.
LEFT and BELOW -
The original SMOE
yard at Kabil now
being expanded with
new North Yard
SINGAPORE- BASED fabrication company SMOE
specialises in offshore fixed and floating Production
facilities and established an 85-hectare yard at Kabil,
Batam in 2003. It is now (2015) expanding into an
additional North Yard opposite the original facility. Over
the past three years the yard has been producing
modules for the Curtis Island gas trains in Queensland
and the Wheatstone project in Western Australia in
conjunction with Bechtel.Fish Farming
Extensive inter-island waterways, tides of around 1.5 metres andclean
waters make the Barelang area to Batam‘s south a preferred location for
aquaculture. The joint French-Indonesian hatchery venture pictured below
near Barelang Bridge 1 aims to produce 2 million Barramundi and 1 million
Groupe fingerlings a year.
Local fish farms grow out the hatchery fingerlings
Fish hatchery on the Barelanag Island of Rempang
just south of Batam Island. Note the towering
bridge pylons in the top right of this picture.You can also read
