Hang Nadim Airport development: Batam intensively seeking strategic partner
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 - Pengembangan Bandara Hang Nadim Batam: Gencar gaet mitra strategis
20 November 2023
Batam - The effort to develop Hang Nadim International Airport to be a world class airport is continuously carried out. PT Bandara Internasional Batam (BIB) has established a strategic partnership with Shilla Duty Free Corporation to provide a leading retail outlet.
Since July 2022, the operation of Hang Nadim International Airport has been handed over by Batam Development Authority (BP Batam) to PT BIB. The company is a consortium that consists of Angkasa Pura Airports that has 51% share ownership, Incheon International Airport Corporation (IIAC) that has 30% share ownership, and PT Wijaya Karya (Persero) Tbk or WIKA that has 19% share ownership.
For the next 25 years, Hang Nadim International Airport will be managed by PT BIB. This gives PT BIB the authority to not only develop and renovate the design, but also to expand and maintain the existing passenger terminal (Terminal 1).
Besides that, PT BIB will also construct another passenger terminal (Terminal 2), manage the new cargo terminal, and develop the master plan of Hang Nadim International Airport by implementing the logistics aerocity concept.
In accordance with the development plan, Hang Nadim International Airport will also introduce new international flight routes in the future. These will include flights to Korea, China, India, Thailand, and Saudi Arabia for Hajj.
The development is expected to strengthen Batam as a cargo hub as well as an investment and tourism destination.
The construction of the international airport will be integrated with the development of Batu Ampar Port. The two infrastructures that are crucial for transportation and logistics are set to be the primary gateways for e-commerce. This is in line with the free trade zone and free port master plan of Batam, Bintan, Karimun, and Tunjungpinang for 2020-2045.
To realise the target, PT BIB and BP Batam are aggressively developing infrastructure and attracting investors to the development of Hang Nadim International Airport and Batu Ampar Port.
For example, PT BIB recently established a cooperation with Shilla Duty Free Corporation, which is a top retail company from South Korea. With the strategic partnership, Shilla Duty Free Corporation will build and operate a modern shopping centre in Hang Nadim Airport in 2024.
PT BIB Corporate Vice President Aidhil P. Julian said that his company was optimising passenger experience by establishing a conducive airport ecosystem. Hang Nadim Airport is said to be located at a strategic area as it is one of the entrances for foreign tourists besides Bali and Jakarta.
Shilla Duty Free Corporation is said to have a track record in several international airports. Their retail centres are already located Changi Airport in Singapore, Chek Lap Kok Airport in Hongkong, and Macau Airport.
“Shilla [Duty Free Corporation] will operate at Hang Nadim [Airport] next year. Their outlet will supply duty free products, such as alcohol, cigarettes, cosmetics, and perfumes,” he revealed on Friday (17/11).
Shilla Duty Free Corporation is said to be the only outlet or store that exclusively supply duty free products. The retail centre is expected to contribute to regional economic revitalisation by creating new jobs.
Even though Shilla Duty Free Corporation will open its outlet next year, Aidhil affirmed that Hang Nadim Airport revitalisation would continue.
“We hope [Shilla Duty Free Coporation] can create new jobs when they operate at the airport,” he revealed.
Before Shilla Duty Free Corporation, PT BIB had also announced a cooperation with Lion Group to develop international routes, particularly those leading to East Asia. As a result of this partnership, several new flight routes were introduced, such as Incheon-Batam, China-Batam, Taiwan-Batam, Japan-Batam, and Batam-Bali. This cooperation was signed in Jakarta in September 2023.
Previously, Aidhil explained that the cooperation with Lion Group affirmed the commitments of both parties to supporting tourism and economic growth in Batam.
Batam investment
The effort to develop infrastructure and modes of transportation in Batam is becoming a necessity as the city in Riau Islands Province has a large potential. The attractiveness of Batam is evident from the massive investment flow into the city.
In their official statement, BP Batam reported that the role of the city was still dominant to the realisation of foreign investments in Riau Islands Province.
Based on the Investment Ministry’s records for the third quarter of 2023, Batam’s contribution to the realisation of investments in Riau Islands reached US$160.16 million or around Rp2.37 trillion. A substantial portion of this amount originated from foreign investments in Batam during the first half of 2023.
“At the time, foreign investments increased by 1.56% compared to the previous year,” BP Batam Head Muhammad Rudi said recently.
On the other hand, the realisation of foreign investment projects during the period also increased drastically by 142.39% compared to 2022.
In the third quarter of 2023, Singapore continued to dominate the foreign investment realisation in Batam. Investors from Singapore invested around US$82 million or Rp1.21 trillion across 541 projects.
The investment volume surpassed the contributions of four leading foreign investor nations in Batam, namely China, Japan, France, and Malaysia.
