Batam Businesses Worried Investors Will Flee to Johor SEZ as Gas, Electricity Prices Surge

TEMPO.CO, Batam - Business players in City have complained about the recent increase in . As a result, prices in industrial estates have also increased. They are worried that this condition will make investors reluctant to come to Batam City amid economic competition among countries following the launch of the Johor Special Economic Zone.

BatamIndo Industrial Estate entrepreneur Mook Soi Wah said his industrial estate has its own power plants that use gas as fuel. When the price of gas goes up, the electricity price in the area also increases, he said. "If gas goes up, our electricity doesn't go up, it's dead, right," Mook told reporters while attending the Singapore Consulate General's event at the Oakwood Hotel Batam on Wednesday, January 22, 2025.

According to Mook, the impact of the increase in gas prices is that electricity will increase by 40 to 50 percent. He said that state gas company PGN has informed the businesses about the price increase.

The chairman of Panbil Group, Johanes Kennedy Aritonang, seconded the opinion. He also asked the government to pay attention so that gas prices are not increased which will affect electricity in industrial areas. "The problem is that natural gas from Sumatra and Natuna is sent to Singapore, we use imported gas, automatically the price of electricity becomes expensive, so we have asked that natural gas be used for domestic electricity first, the price of electricity is cheaper and the industrial area is competitive with other countries," said the deputy chairman of the Sumatra regional coordinator of the Indonesian Chamber of Commerce and Industry (Kadin).

Mook said that the price of electricity in the industrial area of Batam City is the most expensive compared to other Southeast Asian countries. "Now compared to Johor, Vietnam, and Thailand, it is a little expensive in Batam, but if gas goes up, it could be even more expensive, we have a lot of problems."

He asked PGN to reconsider the gas price hike. "I have also told the Deputy Minister of Industry who came to Batam some time ago, but this is the authority of the Minister of Energy and Mineral Resources, hopefully it will get attention," Mook said.

In addition, Mook said Singapore and Malaysia have currently formed a SEZ cooperation in the Johor area, which will attract investors. "Malaysia already has a SEZ, right? If it is more competitive there, I am afraid it will be more difficult for us to attract investment to Batam. The SEZ will accommodate investors who use their hands, even their feet. So let's keep Batam competitive, not increase it (gas and electricity prices)," he said.

Currently, Mook said, Batam entrepreneurs are expanding in China. He hopes that the increase in gas prices will not cause neighboring countries to expand companies that have grown in Batam. "Well, the companies will not immediately move to other countries, but the scale can be reduced by investors later, and they move to Malaysia," he said.

In Batam City, he said, many industrial estates are operating in the electronics sector. In addition, there is an attraction of investors in the data center sector. All of these sectors consume a lot of electricity."Data centers are being fought over in Southeast Asia, there needs to be a lot of electricity, electricity consumption is 24 hours, so if electricity is expensive here, investors will look for the cheap one," he said.

Mook added that Batam City's industrial economy is getting better every year. "Our imports and exports are okay, but it shouldn't be difficult for investors to come to Batam," he said.

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