Prior to 70's, rarely people in Indonesia knew about Batam. It was just a tiny Island which was situated southern Singapore, where Army put the troops during Indonesia-Malaysia confrontation in early 60's.

By realizing the potential of Batam, in 1970 the government of Republic Indonesia declared Presidential decree. The decree stipulated that Batam Island as the logistic and operational base for the activities related to exploration and exploitation of natural oil and gas.

In 1973, the G.O.I declared Presidential decree no. 41 which stated that all the area of Batam as an Industrial region and also Bonded Area.

Government also established Batam Industrial Development Authority, to be responsible for the development of Batam.

Batam has a strategic position. Only 20 kn1 from Singapore and just 30 minutes ferry ride from Singapore, on one of the world's busiest and most important trade routes, Batam Island is well positioned to be developed as an important industrial centre.

The government commitment and policy to develop Batam Island to be an industrial area became a great opportunity, which was highly expected by construction company. Businessmen realized that government would invest in infra structure such as road, port, airport, electricity and water facility and also telecommunication.

This was the great opportunity to PT. Kurnia Djaja Alam to expand their business in Batam Island.

2 (two) events have boosted investment in Batam :

1. In November 1989 BIDA allowed 100% foreign ownership under certain conditions. Immediately hundreds of companies applied for investment approval and the number of private sector development projects increased significantly.

2. In December 1990, Singapore's Prime Minister Goh Cok Tong presented the SIJORI (Singapore-Johor-Riau) "Growth Triangle Concepts", where Indonesia, Malaysia and Singapore are working together to offer an investment opportunity unrivalled in Asia.

F or Indonesia, this means a focus on development in the Province of Riau, especially Batam and Bintan.

Since SIJORI concept has been launched, Batam and Bintan Island showed a tremendous growth.

There are many factors that support Batam and Bintan development:

-Strategic location

-Full government commitment and support

-Good Infra structure -Bonded Area



Research Location: PT Kurnia Djaja

Supervisor:

Accepted in: 1996