Yogyakarta is developing a warehouse zone in Kulonprogo regency with an investment worth IDR 274.06 billion. The project was first kicked off in 2020 and was part of the Investment Coordinating Board (BKPM)’s 47 priorities.
Kulonprogo is a regency within the Yogyakarta Special Administrative Province. Yogyakarta is ruled by a sultan, who also serves as a governor. The province is the center for Javanese cultures such as fine arts, traditional dance, batik, drama, literature, music, poetry, silverware, visual arts and wayang puppetry. Yogyakarta is famous as “a city of students” due to the number of universities in the province, including the most prestigious Gadjah Mada University. The population of the province was around 7.94 million in 2021, according to Statistics Indonesia (BPS).
The BKPM is the main government institution that deals with investment projects all over Indonesia and implements policies on investments and coordinates projects across the nation. It was established in 1973 and has been chaired by Investment Minister Bahlil Lahadalia since 2021.
Easy access helps open connectivity
The warehouse project has an interest rate of return (IRR) of 12.64%, a net present value (NPV) of IDR 76.6 billion and a payback period of 13.58 years.
The project is located near the Yogyakarta International Airport (YIA) and part of the Kulonprogo aerocity. The project’s purpose is to open connectivity nationwide and worldwide to impact the economy through trade, tourism, investment and value-added products. The strategic location is integrated with many supporting infrastructures, such as roads, railways, logistics, electricity, clean water, an industrial zone, a port and an airport.
The surroundings of the airport are created with the concept of an aerotropolis that is open to new economic opportunities to increase competitiveness of the area that is currently integrated and sustainable. The regency will be considered as the center of distribution for trade and services on a national and international scale with the basis of agriculture and tourism.Â
Many opportunities are being given to investors and are accommodated throughout the aerotropolis zone in terms of spatial clarity, legal certainty and resource utilization. One of the investments in the regency is the cargo village that is located in Plumbon village, Temon Kulonprogo district, and it is about 9 minutes from the airport. Meanwhile, the cargo village will serve as a collector and a consolidation of commodities beforedistributed nationally or internationally by air, land or sea. Almost all exports and imports from Yogyakarta are through ports outside province.
Potential natural disasters
As Yogyakarta is located near the active volcano Mount Merapi, the province is facing potential natural disasters especially earthquakes and volcanic eruptions.
According to the Meteorology, Climatology and Geophysics Agency (BMKG), there are potential areas prone to earthquakes in the megathrust zone in South Java. The agency advised the provincial administration to strengthen building structures in the area to minimize damages. Megathrust is a plate subduction zone with a shallow depth of less than 50 kilometers.
Meanwhile, Head of National Search and Rescue Agency (Basarnas) Vice Marshal FHB Sulistyo said during the 2016 INSARAG Asia Pacific Regional Earthquake Response Exercise that Yogyakarta would always be prone to natural disasters. The latest Mount Merapi major eruption occurred in 2010, claiming the lives of 353 people.
