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STRENGTHENING - DPMPTSP Prov. Kaltim...Investor reLAtIons UnIt oF eAst KALIMAntAn E Ast Kalimantan,...

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INVESTOR RELATIONS UNIT OF EAST KALIMANTAN STRENGTHENING THE FOUNDATION FOR FUTURE GROWTH
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I N V E S T O R R E L AT I O N S U N I T O F E A S T K A L I M A N TA N

STRENGTHENING THE FOUNDATION FOR FUTURE GROWTH

I N V E S T O R R E L AT I O N S U N I T O F E A S T K A L I M A N TA N

STRENGTHENING THE FOUNDATION FOR FUTURE GROWTH

I N V E S T O R R E L AT I O N S U N I T O F E A S T K A L I M A N TA N

STRENGTHENING THE FOUNDATION FOR FUTURE GROWTH

Investor Relations Unit (IRU) of East Kalimantan has been established as a joint effort between Regional Board of Investment and Integrated Licensing and Bank Indonesia East Kalimantan Regional Office since 2015. The main objec-tive of Regional IRU is to actively communicate Indonesian and East Kalimantan in particular economic policy and to address concerns of investors, especially financial market investors.

As an important part of its communication measures, prospective investors are very welcome to visit Regional Board of Investment website. However, day-to-day activities of IRU are supported by all relevant government agencies in East Kalimantan province. IRU also answers questions through email, telephone and may arrange direct visit of banks/financial institutions to Bank Indonesia and other relevant government offices.

About Investor Relations Unit of East Kalimantan

Harry Aginta (East Kalimantan Regional Office of Bank Indonesia, Phone: +62 541 741022)Christian (East Kalimantan Regional Office of Bank Indonesia, Phone: +62 541 741022)Diddy rusdiansyah (Regional Board of Investment and Integrated Licensing – East Kalimantan Province, Phone: +62 541743235 ) e-mail: [email protected]

Contact: Published by Investor

Relations Unit – East Kalimantan

Province

Investor reLAtIons UnIt oF eAst KALIMAntAn

SECTION 4

INVESTMENT PROCEDURES

TABLE OF CONTENTSstrenGtHenInG tHe FoUnDAtIon For FUtUre GroWtH

SECTION 1

INTRODUCTION

Investor reLAtIons UnIt oF eAst KALIMAntAn

EAst Kalimantan, is a province of Indonesia. Its territory comprises the eastern portion of Borneo. It has a population of about 3.5

million, and its capital is Samarinda.The majority of the region shares a maritime

border to the east with West Sulawesi and North Sulawesi; its coastline faces the Makassar Strait and the Celebes Sea.

Its former northernmost region is now North Kalimantan; to its south, East Kali-mantan borders the South Kalimantan province. The province bordered Sabah before the split, but still borders Sarawak.

East Kalimantan is now divided into six regencies and three cities. Awang Faroek Ishak is its governor and Mukmin Faisal as its vice governor.

BACKGroUnD

Largest economyIn Borneo Island

(IDr 579 trillion)

economic Growth 3,55%

(Quarter II - 2017)

3rd LargestArea in

Kalimantan Island (129,066 km2)

Key stAtIstICs & InDICAtors

129,066 km2 of area3,508,012 of people

source: BPS. 2014 figures are preliminary figures

EASTKALIMANTAN

INTRODUCTIONstrenGtHenInG tHe FoUnDAtIon For FUtUre GroWtH

3

SECTION 1

INTRODUCTION

SECTION 2

NATIONAL MACROECONOMY

Investor reLAtIons UnIt oF eAst KALIMAntAn 5

CONDUSIVE ENVIRONMENTnAtIonAL MACroeConoMy

SECTION 2

NATIONAL MACROECONOMY

Investor reLAtIons UnIt oF eAst KALIMAntAn6 7

INDONESIA’S STRONG GDPnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn6 7

STRONG AND STABLE GDP PERFOMANCEnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn8 9

A NARROWER, STRUCTURALLY-STRONGER CURRENT ACCOUNT DEFICITnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn8 9

INDONESIA REMAINS THE INVESTMENT DESTINATION OF CHOICEnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn10 11

NATIONAL STRATEGIC DEVELOPMENT PLAN (NAWA CITA)nAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn10 11

IMPROVING INVESTMENT CLIMATEnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn12

IMPROVING INVESTMENT CLIMATEnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn

THE ECONOMIC POLICY PACkAGESnAtIonAL MACroeConoMy

13

Investor reLAtIons UnIt oF eAst KALIMAntAn14 15

THEMATIC POLICY ISSUES ON DEREGULATIONnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn14 15

PROGRESS OF THE ECONOMIC POLICY PACkAGESnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn16 17

‘THE BIG BANG” POLICY ON RELAxATION OF FOREIGN INVESTMENTnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn16 17

TAx AMNESTY AS POLICY BREAkTHROUGHnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn18 19

TAx AMNESTY RESULTnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn18 19

COMMITMENT TO CONTINUE PRODUCTIVE SPENDINGnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn20 21

INFRASTRUCTURE BUDGET CONTINUES TO INCREASEnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn20 21

INCREASING THE EFFECTIVENESS AND EFFICIENCY OF TRANSFER TO REGIONS & VILLAGE FUNDnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn22

30 PRIORITY PROjECTS WITHIN THE PIPELINEnAtIonAL MACroeConoMy

Investor reLAtIons UnIt oF eAst KALIMAntAn

OUTLOOk OF DOMESTIC ECONOMY REMAINS ROBUSTnAtIonAL MACroeConoMy

23

SECTION 3

REGIONAL MACROECONOMY AND INFRASTRUCTURE PROJECTS

Investor reLAtIons UnIt oF eAst KALIMAntAn 25

EAST BORNEO MID-TERM (2013-2018) DEVELOPMENT STRATEGYreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

SECTION 3

REGIONAL MACROECONOMY AND INFRASTRUCTURE PROJECTS

Investor reLAtIons UnIt oF eAst KALIMAntAn

20.5%

67.5%

2.6%1.8% 1.4%

4.8%

16.6%

13.9%

14.0%25.2%

jANUARY-MARCH

2017

26 27

ExPORT BY COMMODITIESreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

Investor reLAtIons UnIt oF eAst KALIMAntAn26 27

REGIONAL ECONOMY IMPROVESreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

Investor reLAtIons UnIt oF eAst KALIMAntAn28 29

REGIONAL GOVERNMENT BUDGET PERFORMANCEreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

Investor reLAtIons UnIt oF eAst KALIMAntAn28 29

ExTERNAL TRADE PERFORMANCEreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

Investor reLAtIons UnIt oF eAst KALIMAntAn30 31

PRIVATE INVESTMENT RANkINGreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

Investor reLAtIons UnIt oF eAst KALIMAntAn30 31

COMPETITIVENESS RANkINGreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

Investor reLAtIons UnIt oF eAst KALIMAntAn32 33

SUPPORT FROM NATIONAL POLICYreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

support from national Policy to enhance Investment Climate

Presidential regulation no 3 of 2016 on Implementation Acceleration of national strategy Project

Facilities for project supported by the Presidential regulation:

Simpler treatment in licensing

Receiving special treatment if the project is not in accordance with

Spatial Planning which has been decided

Central Government can give guarantee in the event of financing hunting.

There is special treatment in goods and services procurement both in its limited nominal and its mechanism

Minister and Regional Head are given discretion authority to solve obstacles

Prioritizing Law of Administration if digression happens

there are some projects in east Kalimantan which are supported by the Presidential regulation, those are:

KEK Maloy

Toll Balikpapan-Samarinda

Balang Island Bridge

Marangkayu Dam

RDMP Balikpapan

GRR Bontang Refinery

Teritip Dam

East Kalimantan Railroad

Investor reLAtIons UnIt oF eAst KALIMAntAn32 33

CPOreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

1. KEK Maloy PRoGRESS

ProGress

Port: A 700 m CPO trestle terminal and 750 m causeway (land) have been built, estima-ted to be completed in 2017 (rigid pv).

CPo storage tanks: Provincial Government has prepared an area of typo 10 ha.

road access: of the total length of 17.5 x 2 = 35 km, 29.2 km completed and 5.8 km remaining.

roads in the area: 1.5 km ground road has been made, 2 km rigid and box culvert.

A 500 ltr/sec Sekerat Dam Inta-ke Water Supply has been built.

A water transmission pipeline has been installed from Sekerat Dam to SPAM Maloy through the length of 5,125 km from the total of 28,700 km.

BeneFIts

Is a downstream center for palm oil based industries (oleochemi-cal). The locus is at ALKI II

Is the industry’s main facility

which enhances the investment attractiveness of KEK MBTK

Road access from national road to Maloy area exists

Roads within KEK Maloy connect

the industrial clusters

The provision of water from the Sekerat Dam with a capacity of 500 ltr/sec which is processed into clean water through SPAM in the KEK Maloy.

Area = 557.34 Ha

Investment value = Rp 17,9 Trilion / $ 1.32 Billion

estimated to be operating = 2017

LoCAtIon

Investor reLAtIons UnIt oF eAst KALIMAntAn34 35

TOLL ROADreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

2. Toll BalIKPaPaN – SaMaRINDa PRoGRESSLoCAtIon

DesCrIPtIon

The first toll in Kalimantan which connects two major cities in East Kalimantan, Samarinda and Balikpapan

ProGress

42.75 km of the road and 5.1 km rigid pavement construction (2 lines, 4 lanes) have been built.

Segment 1 through the length of 22.5 km (physical 51%, land 100%), segment 2,3,4 through the length of 65,93 km (physical 3.03%, land 85%) and segment 5 through the length of 11,09 km (Physical 3.8%, land 63%) have been built.

Length= 99 Km

Investment value = Rp 9.97 Trillion /$ 738.5 Million

estimated to be operating = 2017

BeneFIts

To increase theflow of goods and services between economic centers in East Kalimantan

To support industrialization through connectivities of port and airport outlets

Investor reLAtIons UnIt oF eAst KALIMAntAn

Length= 41,75 Km

Investment value= Rp 1.33 Trillion/$ 98.5 Million

estimated to be operating = 2019

34 35

BRIDGE CONSTRUCTIONreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

3. BalaNG ISlaND BRIDGE PRoGRESSLoCAtIon

DesCrIPtIon

Pulau Balang Bridge and Road connecting Balikpapan and Penajam Paser Utara (PPU).

ProGress

A 470 meters Short Span Bridge has been completed

An 800 meters Long Span Bridge has been built

Provincial and district governments have prepared a 40 km roads in both Balikpapan and PPU side.

BeneFIts

Part of Trans Kalimantan Road South Poros in support of KI Kariangau Buluminung development as well as Kariangau TPK Port and Sultan Aji Muhammad Sulaiman Sepinggan Balikpapan International Airport.

Investor reLAtIons UnIt oF eAst KALIMAntAn36 37

DAM CONSTRUCTIONreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

4. MaRaNGKayU DaM PRoGRESS

DesCrIPtIon

Marangkayu Dam

ProGress

New land acquisition of 350 Ha is determined from 615 Ha needed land

The development of the physical progress of Marangkayu Dam is around 90.72%, including:

- Spillway

- Waterway construction

- Body of the dam (not fully completed yet)

Area = 455 Ha

Investment value = Rp 271 Billion/$ 20.1 Million

estimated to be operating = 2017

LoCAtIon

BeneFIts

The water reservoir building for water supply in Marangkayu is 1,500 Ha, so that rice fields are served with technical irrigation system, water supply of 450 ltr/sec to the local sub-district and Bontang City, flood controller, and PLTMH of 135 kwh.

Investor reLAtIons UnIt oF eAst KALIMAntAn36 37

OIL REFINERYreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

5. RDMP BalIKPaPaN PRoGRESS

DesCrIPtIonRDMP Balikpapan Oil Refinery

ProGress

Employee apartment completion

PT. PP and PT. Wijaya Karya are appointed as the contractors

BeneFIts

The refinery upgrade project in Balikpapan is very influential for the economy in Balikpapan, especially considering the portion of the oil and gas processing industry that is dominant in the economic structure of this city.

Area = 75Ha

Investment value = Rp 62,1 Trillion/$ 4, 6 Billion

estimated to be operating = 2019

LoCAtIon

Investor reLAtIons UnIt oF eAst KALIMAntAn38 39

OIL REFINERYreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

6. GRR BoNTaNG REFINERy PRoGRESS

Area = 557.34 Ha

Investment value = Rp 194 Trillion/ $ 14, 4 Billion

estimated to be operating = 2023

LoCAtIon

DesCrIPtIon

Construction of a new oil refinery as a part of national strategic project. This GRR project only exists in Bontang and Tuban.

ProGress

Revision process of Bontang’s RTRW.

Beauty contest has been done and now there are 60 potential investors who are interested.

BeneFIts

To meet the needs of oil in the East part of Indonesia with an investment value of 14.9 Billion Dollars with a capacity of 300,000 barrels/day.

Investor reLAtIons UnIt oF eAst KALIMAntAn38 39

DAM CONSTRUCTIONreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

7. TERITIP DaM PRoGRESS

Area = 94.80 Ha

Investment value = Rp 262 Billion/ $ 19.4 Million

estimated to be operating = 2017

LoCAtIonDesCrIPtIon

Teritip Dam, built to sup-ply the need of drinking water for Balikapapan residents

ProGress

Teritip reservoir has been completed.

The remaining 40 hecta-res is the land which has not been released

BeneFIts

Water supply and flood control in Balikpapan

Adding to the clean water supply by 250 liters per second

As a tourism destination

Investor reLAtIons UnIt oF eAst KALIMAntAn40

RAILWAYreGIonAL MACroeConoMy AnD InFrAstrUCtUre ProJeCts

8. EaST KalIMaNTaN RaIlRoaD PRoGRESS

DesCrIPtIon

Kaltim Railway,The first railway in Kalimantan and will be used to transport minerals.

ProGress

KA. Kalimantan: process of preparation of DED and AMDAL by Ministry of Transportation (Lintas Tanjung (South Kalimantan) - Paser - PPU - Balikpapan (East Kalimantan)).

BeneFIts

It is a central government program for railways to become a mode of transportation in Kalimantan, hence it imcreases the accessibility, efficiency and effectiveness of the movement of goods and services.

Length = 203 Km

Investment value = Rp 17,9 Trillion/$ 1.33 Billion

estimated to be operating = 2017

LoCAtIon

SECTION 4

INVESTMENT PROCEDURES

Investor reLAtIons UnIt oF eAst KALIMAntAn42 43

REGIONAL INVESTMENT PROCEDUREInvestMent ProCeDUres

Investor reLAtIons UnIt oF eAst KALIMAntAn42 43

GOVERNOR REGULATIONInvestMent ProCeDUres

PoLICy DIreCtIon oF CAPItAL InvestMent

Institutional Strengthening of Regional Capital Investment.Development of Integrated One-Stop Service in the field of more effective and accommodative capital investment.Coordination increase among agencies/institution in regional in the event of capital investment service to capital investors.Directing capital investment institution in regional to proactively become capital investment initiator as well as problem-solving oriented.

FoCUs oF CAPItAL InvestMent DeveLoPMent

Field of Agro Industry (Crops, Plantation, Farming and Fishing/Marine).Field of Infrastructure and Energy.Field of Tourism.

Governor Regulation No 22 of 2014,on East Kalimantan RUPMP of 2014-2025, are regulating:

CAPItAL InvestMent sPreAD

Industrial Area of crops in PPU and Paser.Kariangau (KIK) and Buluminung Industrial Areas in Balikpapan and PPU.Service and Trade Industrial Area in Samarinda.Gas and Condensate Industrial Area in Bontang.Maloy Industrial Area and Inter-national Harbor in Kutim.Tourism Industrial Area in Berau.Border Strategic Industrial Area in Mahakam Ulu.Agricultural Area in Kukar and Kubar.

Investor reLAtIons UnIt oF eAst KALIMAntAn

REGIONAL REGULATIONInvestMent ProCeDUres

44 45

Regional Regulation No 6 of 2015 INCENTIVE aDMINISTRaTIoN aND FaCIlITaTIoN oF

CaPITal INVESTMENT IN REGIoNalInCentIve ADMInIstrAtIonIs a support from regional government toward capital investors in the event of enhancing capital investment increase in regional.

FACILItAtIonIs facilities procurement from regional government toward capital investor to facilitate every activity of capital investors in the event of enhancing capital investment increase in regional.

tHe PUrPose oF InCentIve ADMInIstrAtIon AnD FACILItAtIonIs to pull and stimulate capital investors to perform capital investment in regional in the event of better investment climate, increase access and economy ability as well as increasing regional economic growth.

InCentIve ADMInIstrAtIon CAn Be In tHe ForM oF:

Reduction, relief, or release of regional tax;Reduction, relief, or release of regional retribution; andFacilitation of capital inclusion and/or loan interest subsidies in regional bank. FACILItAtIon CAn Be In tHe ForM oF:

Provision of data and information of capital investment in potential sector and partner-ship opportunity;Provision of facilities and infrastructures;Provision of land or location;Provision of technical support; and/orAcceleration of permission provision.

Investor reLAtIons UnIt oF eAst KALIMAntAn

REGIONAL REGULATIONInvestMent ProCeDUres

Balikpapan City Regulation No 11 of 2015

aBoUT THE PROVISIONS OF INCENTIVE AND EASE AT CAPITAL INVESTMENT

KIK AreABuildings, with physical activities, which have been established within 2 years are given the highest 15% of the subject of local taxes and levies. Buildings, with physical activities, which have been established within 1 year are given the highest 25% of the subject of local taxes and levies.

CoAstAL AreABuildings, with physical activities, which have been established within 10 years are given the highest 15% of the subject of local taxes and levies. Buildings, with physical activities, which have been established within 5 years are given the highest 25% of the subject of local taxes and levies.

toUrIsM AreA, trADInG AreA, InDUstrIesBuildings, with physical activities, which have been established within 2 years are given the highest 15% of the subject of local taxes and levies.Buildings, with physical activities, which have been established within 1 year are given the highest 25% of the subject of local taxes and levies.

reQUIreMents oF InCentIve AnD eAse ProvIsIon

ACCeLerAtIon oF LICense GrAntInG

1. Performing simultaneous licensing such as:1. - Principal and Location Licenses - IG SIUP and TDP - IG and TDG

2. Launching SOS service in the form of: - Nighttime licensing service everymonday night - SIUP TDP licensing Service, 1 Hour Completed, on monday night - Online licensing service

3. License status checking through Si Cantik app. (Sistem Informasi Cerdas Pelayanan Terpadu Untuk Publik) that can be accessed by the applicant.

ProvIsIons oF teCHnICAL AssIstAnCeProviding licensing technical assistance either it is directly in the office, in the field or online through email and DPMPT website of Balikpapan City.

ProvIsIons oF LAnD or LoCAtIon1. Provision of Tofu and Tempe Industrial Land utilized by entrepreneurs by lease with a low cost

2. Provision of land owned by Balikpapan’s Government located in the industrial area of Kariangau which can be used by investors to conduct industrial activities.

eAse ProvIsIon

44 45

Investor reLAtIons UnIt oF eAst KALIMAntAn46 47

REGIONAL REGULATIONInvestMent ProCeDUres

Balikpapan City Regulation No 11 of 2015

aBoUT THE PROVISIONS OF INCENTIVE AND EASE AT CAPITAL INVESTMENT

tyPes oF reGIonAL tAXesProperty tax.Advertisement tax.Land acquisition and building rights.

tyPes oF LevIesBuilding Establishment Permit.Disturbance License.

tyPes oF toUrIsM BUsInessesThe majority of 80% of its business activities are in green open spaces/natural.Does not change the existing landscape and natural contours (natural).

tyPes oF InDUstry ACtIvItIesActivities that can be given incentives are the ones of top commodity industries.Further provisions are governed by mayoral regulations.

tyPes oF InCentIve reDUCtIon/eAse

Investor reLAtIons UnIt oF eAst KALIMAntAn46 47

ABOUT kLIkInvestMent ProCeDUres

EaSE CoNSTRUCTIoN DIRECT INVESTMENT (KlIK)

GenerAL overvIeW

1. KLIK is an ease given by Government to a company which will invest in certain Industrial Area.

2. A company after obtaining Investment/Principle Permission, both from Central and Regional PTSP, can directly do construction while managing building permit (IMB), environmental permit (UKL/UPL, Environmental Impact Analysis), and other regional permit as long as fulfilling requirement of Estate Regulation.

3. Required execution permit need to be fulfilled before the company is ready to produce commercially.

4. No minimal limitation on investment value or Indonesian Workforce Absorption

5. Certain Industrial Area will be decided by the Head of BKPM.

6. Need Governor and Regent/Mayor support where the Industrial Area Location is.

7. Need ministerial support to change technical requirement regarding NSPK as policy change reference in regional.

8. Need commitment confirmation across sector to create and keep conducive business/investment climate together.

Investor reLAtIons UnIt oF eAst KALIMAntAn

PerMIssIon tyPe oF PerMIssIon tIMe

CAPItAL 1. Principle Permission 2 days

InvestMent 2. Change Principle Permission 2 days

3. Widening Principle Permission 2 days

4. Business Permission 5 days

5. Change Business Permission 5 days

6. Widening Business Permission 5 days

7. Merger Permission 5 days

total 7

PERMISSIoN SERVICE IN THE FIElD oF CaPITal INVESTMENT

LICENCE SERVICEInvestMent ProCeDUres

48

A NARROWER, STRUCTURALLY-STRONGER CURRENT ACCOUNT DEFICITInvestMent ProCeDUres

INVESTOR RELATIONS UNITO F E A S T K A L I M A N TA N

C O p y R I g h T 2 0 1 7


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