Turning Batam into a logistics hub
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Menciptakan Batam sebagai hub logistik
13 April 2023
The development of Hang Nadim International Airport in Batam is one of the main focuses of Batam Indonesia Free Zone Authority (BP Batam) to improve the competitiveness of Batam as an investment destination and a cargo hub in western Indonesia.
Currently, Hang Nadim Airport is dressing up to be a world-class airport. The effort has commenced since the establishment of the consortium of Angkasa Pura I, Incheon International Airport Corporation (IIAC) and, PT Wijaya Karya Tbk (Persero) that was established to manage the airport through the executing business entity that they established, PT Bandara International Batam.
BP Batam Head Muhammad Rudi said that BP Batam was currently focusing on all infrastructure aspects, including road construction, port improvement, and airport development.
“If infrastructure advances, investment will increase. The impact will be significant on the economy of the people in Batam,” Rudi recently said.
In the future, Hang Nadim Airport will open other new international flights to various countries, such as Korea, China, India, Thailand, and Saudi Arabia for Hajj. The purpose of this is to strengthen Batam as a cargo hub and develop Batam as an investment and tourism destination.
Hang Nadim development will be combined with Batu Ampar Port to support industrial, MSME (micro, small, and medium enterprise), and e-commerce activities. Both locations will be the main gate or the e-commerce cargo centre, in accordance with the master plan for the development of the free trade and port zone (KPBPB) in Batam, Bintan, Karimun, and Tanjungpinang from 2020 to 2045.
Rudi explained that the development orientation of Batu Ampar and Hang Nadim was to support industrial, tourism, and e-commerce activities in the future. Batam will be an international logistics hub that supports integrated and competitive industrial, trade, maritime, and tourism development.
“Let us provide support to make Batam better. Batam is ready to be the e-commerce centre,” Rudi said.
Rudi is optimistic about the Angkasa Pura I consortium making Hang Nadim a logistics airport, which will support a quick and efficient regional e-commerce relationship.
“In the future, there will be drastic changes at the airport. So, the roads need to be repaired. Constructions must continue to be carried out on the ground to support cargo traffic and economic activities,” he affirmed.
Rudi hopes that Hang Nadim will be completed in 2024. BP Batam is currently proposing a runway extension to the central government.
“If the plan is perfect, all roads around the airport must also be perfect. If it is perfect, then tourists from other countries will have a good view toward Batam,” he hopes.
PT BIB Director Pikri Ilham Kurniansyah said that the purpose of developing a cargo hub was to boost Batam’s development to be an e-commerce centre.
“Philosophically, Hang Nadim Airport development wants to make Batam the hub in the eastern area. As a connected city, Batam has access overseas, so we do not need to go through Jakarta,” he revealed.
Initially, PT BIB will open various new domestic and international flight routes to expand the potential market that they can work on as a partner in the logistics hub development.
“We recently opened Yogyakarta, Semarang, and Lombok. Yesterday, on 17 March, we opened Bandung and Makassar. We will soon open Balikpapan, Denpasar, and other routes. We are trying to connect Sumatra. Currently, we are coordinating with various airlines to open flights from Padang to Batam, Bengkulu to Batam, and other [flights],” he said.
Meanwhile, for international flights, Hang Nadim is routinely serving routes to Subang and Malaysia. Currently, it is also serving umrah flights to Saudi Arabia.
“We are developing a flight route to Kuala Lumpur [to be opened] in July 2023 and to Korea soon,” he said.
Incheon that is also a member of Angkasa Pura I Consortium is also providing support the open new routes. Besides funding, Incheon also plays a vital role.
“Besides funding, as a technical stakeholder, the airport’s design, the airport’s power control, and its quality can be equal to the airport in Incheon,” he revealed.
Meanwhile, in terms of marketing, Incheon is opening new international routes to Korea, the Americas, Europe, Asia, and other regions. “The role of Incheon is technical and marketing. They are obligated to develop the market and open international routes,” he explained.
Meanwhile, the role of Angkasa Pura (AP) I is to open domestic flight routes. Meanwhile, Wijaya Karya will build the infrastructure. “However, the quality parameter will be from Incheon, the same as the quality and the control design,” he stated.
Hang Nadim Airport is predicted to serve up to 35 million passengers per year. “It is the long-term target that is carried out in stages. Currently, the highest average is around 6 million passengers per year,” he added.
On the other hand, an academician from UMRAH, Rafki Rasyid, said that the development of the airport in Batam was an important step for Batam to make a further leap in the future.
Until now, overseas logistics has always relied on ports and the sea. With the development of Batam airport, we hope that Batam can rely on air routes.
“With its strategic position, Batam can be an international logistics hub. Hence, Batam’s economic growth will improve faster,” he said.
Besides logistics, with the airport development, tourism in Batam and Riau Islands will develop rapidly.
International tourists can go to Batam more easily. So, international flight routes to Batam must be added.
“Developing the airport is not enough. We see that international flight routes are still lacking. We have to establish expansive cooperation with countries that have potential tourists,” he stated.
For example, countries in the Middle East are relatively rich, so the tourists can be encouraged to come to Batam. Tourism promotions and cooperation with tourism business players in those countries must be established more expansively and improved.
“So, we have high hopes in the development of Batam airport. Moreover, the airport area is already granted the SEZ (special economic zone) status. Benefits that will be obtained by business players that utilise the services of the airport will be plentiful,” Rafki said.
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