Dr. Nofrisel, SE, MM - 2009 1

HINTERLAND CONNECTION AND LOGISTICS

PORT AND LOGISTISTICS INTEGRATED SERVICESA Framework for Developing a Special Economic Zones in JAKARTA

10 OCTOBER 2011JAKARTA

Ports and Logistics Development StrategiesSEMINAR

Presented by

Prof. Dr. Ir. Sutanto SoehodoDeputi Governor of Industry,Trade,Transportation of JAKARTA

Agenda

1. INTRODUCTION

2. SEZ NEW CONCEPTS

3. JAKARTA SEZSTRATEGIC PLAN

4. CONCLUSION

1

1INTRODUCTION

2

Indonesia in LPI (Logistics Performance Index)...

LPI 2010 Ranking

2,0

2,4

2,8

3,2

3,6

LP

I

Cust

om

s

Infr

ast

ruct

ure

Ship

me

nt

Com

pete

nce

Tra

ckin

g

Tim

elin

ess

Indonesia 2010

Indonesia 2007

Scores LPI 2007 & 2010

Source: LPI 2010 The World Bank3

Dr. Nofrisel, SE, MM - 2009 2

National Logistics System and Economic Strategic Plan(MP3EI)

ImprovingNational

Competitiveness

SocialWelfare

4

Transportation Cost ASEAN Comparison

0 1 2 3 4

Lao PDR

Indonesia

China

Malaysia

Thailand

Vietnam

Domestic logistics costs score

Notes: scale between 1 (lowest/worst score) and 5 (highest/best score).

Source: World Bank (2007), http://go.worldbank.org/XQMBHIUUR0

5

National Logistics System Network

Rural

Rural

Rural

Integrasi Jaringan Lokal dan Nasional Koneksi Jaringan Global

Hub

Port International

EROPA

InterIsland

Districs

Hub

Port International

ASIA

Hub

Port International

AMERIKA

INDONESIA

Internatioanl HubPorts

InterIsland

InterIsland

Rural

Rural

Rural

Rural

Rural

Kota/

Kab

Districs

Hub

Port International

AFRIKA RIKA

Hub

Port International

AUSTRALIA

Rural

6

PORT OF TANJUNG PRIOK Vs CONTAINERS MOVEMENT

HINTERLANDS

CITY OF JAKARTA

WEST JAVA

BANTEN

CENTRAL JAVA

LAMPUNG

APPROX OF:

400.000 ha

(100%)

INDUSTRIAL

ZONE

INSTALLED

CAPACITY 65%

PORT OCCUPY

BOR : 85%

WT:16 H

DWELL:14 D

TRUCYCLE:0,9

YOR (78%)

ON EVERY

DEVELOPMENT

OF INVESTMENT

WIL BE

IMPACT TO Y O R

(CAN BE 90%)

POTENTIAL

CAPACITY 35%HIGH RISK

DEMURAGE

CARGO BROKEN

POOR DELIVERY

TRANSHIPMENT RISK

BAD PLANNING

OCCUPANCY

SPARE 30%

CONDITION WAS

VERY SERIOUS AND

TEND TO STAGNANT

H I G H C O S T

STUDY OF JICA 2003

DEMAND & CAPACITY OFCONTAINERS

7

Dr. Nofrisel, SE, MM - 2009 3

INDUSTRIAL SUPPORT : Jakarta Hinterland

ToSumatera

CIKARANG

Industrial Complex

PUNCAK

Resort Area

BALARAJAIndustrial Area

PULO GADUNG

Industrial Estate

KARAWANG

Industrial EstateKARAWACI

Industrial Area

KEK MARUNDA Industrial Area

KBN CAKUNG Industrial Area

BekasiBekasi

To Central &East Jawa

CIKUPAIndustrial Area

BANDUNGSELATAN

Industrial

Estate

BogorBogor

TangerangTangerang

TANJUNG PRIOK Port& Warehouse Area

DepokDepokOuter-outer ringroad

SOEKARNO HATTA

Airport & Warehouse Area

BandungBandung

MARUNDA CENTRE Industrial Area

CIKAMPEK

Industrial Estate

PURWAKARTA

Industrial Estate

BOJANAGARAIndustrial Area

8

Background SEZ Deveopment in Jakarta

National LogisticsProfile

EconomicMaster Plan

PortsPerformance

JAKARTAGeostrategicsand

Position

JAKARTASEZ

9

2SEZ NEW CONCEPT

10

Logistics Center

INDES LINESINDES LINESOcean going

Assembly /Light Manufacturing Plant

International Hub

Colaboration of Seaport, Industrial Zone, Logistics Center, Non Resident Inventory, Local SME and Feeder ports.

Country A

Material/partssuppliers

Other National PortsIn other region of Indonesia

Country B

Market

Country C

Country Z

NonResidentInventory

Tra

nsh

ipm

en

t

Economic Development Modelin ForelandAreas

Parts

sup

ply

Finish

ed

goo

ds

Republic of Indonesia

Legend :

International Industrial Zone

Non Resident Inventory

SME = Small and Medium Enterprise

Transfer

Industrial Estate

Local Supplies SME

Inter-island

Domestic Market

11

Dr. Nofrisel, SE, MM - 2009 4

SEZ Logistics-Based Paradigm in Global FreeTrade

Brand/Parts x

Brand/Parts y

Brand/Parts z

Producers andPrincipals

ASEAN MarketASEAN Market

Non ResidentInventory

Warehousing /Parts Mgmt

LightManufacturing /Assembly Plant

Parts

NationalSuppliers

/Producers

EndProductsLabelling:MADE IN

INDONESIA

0% ofimport

dutyParts

SPECIAL ECONOMIC ZONES

Flow of goods

Domestics MarketDomestics Market

Global MarketGlobal Market

InternationalExhibition &

TradingHouse

Trade, Logistic,Port and Estate

Supporting

NationalSuppliers

/Producers

NationalSuppliers

/Producers

EndProducts

EndProducts

CDC/CCC

12

ASLC as a Logistics Hub

3PL services Freight forwarding Warehousing forexport / re-export

Logistics value-adding services

Packaging andrepackagingKitting, palletizing

Labeling

Testing and repair

Deconsolidationand consolidation

Weighing, mixing,filling

Componentsassembly

13

Logistics hubs integrate multi-modal dan land capabilities

40 km

Bahrain InternationalAirport

• Main hub of Gulf Air, a major carrier inthe region

• 40% expansion in cargo-handlingcapacity underway

• 15% increase in cargo growth by 2015

Kingdom of Saudi Arabia Border

• Direct link to KSA markets throughKing Fahad Causeway

Khalifa bin Salman Port

• Phase I: Increases Bahrain’scapacity from 250,000 to 1.1

million TEUs• Phase II: Up to 2.5 million TEUs

expected

13 km

Intermodal connections from the BLZ

Qatar-Bahrain Causeway (future)

• Construction of the 40 km Causewayconnecting the countries expected to

start in 2008

Bahrain Example

14

Institutional framework of SEZ

Old Framework

1 Zone Authority would own, operateand regulate the zone;

2 Zone funded by gov’t; typicallysubsidized services & facilities;

3 Zone Authority has little power overother gov’t bodies;

4 Most zones cater to manufacturers,not recognizing importance of logisticsservices.

New Framework

1 Zone Authority only regulatesactivities within the zone;

2 Private developer builds, owns andoperates the zone on a cost-recoverybasis;

3 One-stop set up within the zone forquick processing of permits andpaperworks;

4 Zone enterprise designation extendedto service intermediaries.

*) Source: Compile from IFC and FIAS Report, 200815

Dr. Nofrisel, SE, MM - 2009 5

3JAKARTA SEZ STRATEGIC PLAN

16

SEZ in National Logistics System

NATIONALDISTRIBUTIONSYSTEM FOR

COMMODITIES

NATIONALTRANSPORTATION

SYSTEM

NATIONAL LOGISTICSSYSTEM

MULTIMODATRANSPORTATION

SYSTEM

Global and Regional Related Issues

LOGISTICSSERVICE

PROVIDERS

SPECIALECONOMIC

ZONES

National EconomicMaster Plan

SEZ is a part ofNational Logistics

System

17

DISTRIBUTION MAP FROM AND TO SEZ (ALI SADIKIN LOGISTICS CENTER)

ASLC

WESTGATE

LANDBRIDGE

EASTGATE

SOUTHGATE

KONSEP;cargo city check in

single document serviceone’ stop service

door to door deliveryBUMD : Freight & Logistic

Toll road network 18

Delliniation of JAKARTA SEZ

19

LAND AREA

SEA AREA

AREAS

Dr. Nofrisel, SE, MM - 2009 6

Economic Benefits of JAKARTA SEZ

ROLES : Economic enabler for trading, industry and economic master plan Alingment with National Logistics System Together with Tanjung Priok as National & ASEAN Logistics Hub Employment and busines opportunities

FUNCTION : Meeting points for industrialist, businessmen, traders and Logistics

Service Providers (LSP) Value-based activities (high value products) and industry-based

logistics Assembly processes (intermediaries or parts) Expor, Import and Domestics consolidation/distribution Supply bases (Vendor Management Inventory – Non Resident

Inventory) for national and regional industry Facilities and incentives

20

Masterplan and Zoning

Legends :

21

Masterplan : Network Zones

LEGENDS :

ROAD ACCESS

PUBLIC ACCESS

ROAD PLAN

TOLL ROAD PLAN

RIVERS NETWORK

TOLL ROAD

ROAD

RAIL WAYS

ROAD ELEVATED

Insp

eksi

BK

TR

oad

Ro

rota

nR

oad

TOLL ROADCIKARANG -TANJUNG PRIOK

4CONCLUSION

23

Dr. Nofrisel, SE, MM - 2009 7

New Framework of SEZIntegratedLogistics Services

Value Added Services : Zone enterprises designation extended to serviceintermediaries;Value Added Facilities (CFS, CDC, CCC, Empty Container Depot, Bonded

Transportation);Security System (Supply Chain security by adoption of GPS, RFID, eSEAL);

Trade Facilitation Authorized Economic Operator (G2G Mutual Recognition Agreement);Derived from Economic Partnership Agreement (EPA);One-stop set up within the zone for quick processing of permits and

paperworks; Integrated Custom and Quarantine services (joint inspectionsession is done in Gate In / Out of SEZ);Adoption of WCO SAFE Framework;Adoption of US Cutoms Trade Partnership AgainstTerorism (CT-PAT);Adoption of International Ships and Port Facility Security (ISPS Code).

Investment Policy Public-Private Partnership;Private developer builds, owns and operates the zone on a built-operate-

transfer or cost-recovery basis;

Tax n IncentiveScheme

Basic incentives :Taxes, Customs & Excise, and Local Gov’t RetributionsAdditional incentives : Facilities and other easiness for doing business

JAKARTA SEZ Framework

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ThankYou

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