Balikpapan

Coordinates: 1°15′48.74″S, 116°49′40.38″E

Balikpapan is a seaport city on the eastern coast of Borneo island in the East Kalimantan province, a resource-rich region well known for its timber, mining and petroleum export products. Two harbors, Semayang and Somber, and the Sepinggan International Airport are the main transportation access to and from the city.

Geography

The topography of the municipality of Balikpapan is generally hilly (85%), with only small areas of flatland (15%), particularly along the coast and surrounding the hilly areas. The hills are less than 100 meters higher than the adjacent valleys.

The altitude of Balikpapan ranges from 0 to 80 meters above sea level.

Most of the soil in Balikpapan contains yellow-reddish podsolic soil and alluvial and quartz sand, making it extremely prone to erosion.

History

Prior to the oil boom, Balikpapan was an isolated Bugis fishing village. The etimology of Balikpapan name (lit. balik is behind and papan is a plank) came from a folk story where a local king threw his newly borned daughter into the sea to protect her against his enemies. The baby was tied beneath some planks, which were discovered by a fisherman.

In 1897, the first drilling of oil began by a small refinery company.^[1] Roads, wharves, wharehouses, offices, barracks and bungalows construction started when a Dutch oil company arrived in the area. On January 24, 1942, Balikpapan became a war theather between Japanese army and the Allied Forces in which the oil refinery and other facilities were heavily damaged. Several campaigns followd until the 1945 Battle of Balikpapan which concluded the Allied Forces' Borneo campaign after which they took control of the Borneo island.

Extensive wartime damaged almost total oil production in the area and a major repairment was performed by the Royal Dutch Shell company. Shell continued operating in the area until Indonesian state-owned Pertamina took it over in 1965.^[1] Having lack of technology, skilled manpower and capital to explore the petroleum region, Pertamina sublet petroleum concession contracts to multinational companies in 1970s.

Being the only oil refinery site in the region, Balikpapan emerged as a revitalized center of petroleum production. Pertamina opened its regional headquarter in the city, followed by branch offices establishment by international oil companies. Hundreds of labors from other part of Indonesia and skilled expatriats as managers and engineeres, flocked into the city.

Administration

Balikpapan is bordered by the following:

• Kutai Kartanagara Regency (in the North)
• Makassar Strait (in the South and East)
• Penajam Paser Utara Regency (in the West)

Demographics

During the Suharto administration, Indonesia faced unprecendented growth of economic expansion by promoting foreign investments, particularly in the exploitation of natural and mineral resources. Although the policy was heavily criticized for uncontrolled environmental damages and corrupted bureaucrats and politicians, it significantly boosted urban development in resource-rich cities. In 1970s, Balikpapan experienced 7% population growth annually when exports of timber and petroleum increased dramatically.^[1]

Economy

The city has several shopping centers built by private companies, including Plaza Balikpapan (or 'Balikpapan Center'), Plaza Rapak, Mal Fantasy in Balikpapan Baru estate and newly open Makro, the hypermarket. Index Furnishing for big selection for furniture and ACE hardware for home supplies. There are many traditional markets in Balikpapan such as Klandasan Market, Kebun Sayur Market, Baru Market, and Buton Market. Many different fruits and vegetables are sold at Buton Market. Upcoming spots still under construction are Pasar Baru Square with a lot famous brand already sign up and also Balikpapan Super Block.

Balikpapan's economic growth is faster than in other cities in East Kalimantan.

The city has regular problems with electricity and water supply, which may be due to the city's rapid economic growth and lack of long-term planning. Balikpapan residents experience blackouts (mati lampu) of several hours three to four times a week. There are also water shortages (mati air), which sometimes last for more than a week.

Industrial activities play an important role in KIZ/KIK, which is planned to cover a large area. The dominant activities are large-scale and medium-scale industries. The products produced in this area include food and beverages, rubber, processed wood, chemicals, metal, charcoal, and others. Almost all raw materials used in KIZ come from local sources, particularly agriculture.

The available warehouse functions as temporary storage for both finished products and raw materials prior to distribution. A new warehouse area will later be located near the seaport.

Oil refinery

The Balikpapan Oil Refinery is located on the shore of Balikpapan Bay and covers an area of 2.5 km². Established in 1922, it is the oldest refinery in the area. It was destroyed in World War II by the Allies of World War II and re-built in 1950. The refinery has two subunits, Balikpapan I and Balikpapan II.

Balikpapan I consists of two raw oil refinery units that produce naphtha, kerosene, gasoline, diesel fuel, and residue and one high-vacuum unit that produces 100 tonnes (approx 98 tons) of paraffin oil distillate (POD), used as raw material for wax factories. The wax itself has various grades and is sold domestically and internationally.

Opened on November 1, 1983, Balikpapan II has a hydro-skimming and hydro-cracking refinery and produces petrol, LPG, naphtha, kerosene, and diesel fuel.

Kariangau Industrial Zone

To face globalization, the government has declared 13 large areas in eastern Indonesia as developed areas. These areas are called integrated economic development zones (KAPET) and have been established by presidential decrees.

There is one integrated economic development zone in each province; Sasamba is the one in East Kalimantan. To attract investors, the government provides fiscal and non-fiscal assistance to support economic activities. The purpose is to develop eastern Indonesia, improve the lives of its people, and raise the economic level to that of its western Indonesian counterparts.

Sasamba is expected to support economic growth in the area and its surroundings, which have agricultural and fishery resources.

Sasamba is managed by a manager council (BP) that has representatives from local and national government bodies. As well as its main duty, BP Sasamba supervises development in Sasamba. The development of the Kariangau Industrial Zone is a priority because it is expected to be the core of Sasamba.

The Kariangau Industrial Zone (KIZ/KIK) covers 50 km² comprising the Kariangau industrial area and its development area. The developed area covers 15 km². The rest is for future development.

The KIZ/KIK development area is relatively unused for economic purposes. It consists mostly of coarse grass, bushes, and forest. Swidden agriculture is also still practiced here. Based on the physical condition, this area has potential for industry. However, it cannot be expanded northwards, for it is bordered by the Sungai Wain protected forest.

The Kariangau Industrial Zone will receive a seaport for goods distribution, particularly manufactured products. It will also be provided with loading and unloading facilities and equipment for containers. The seaport is to be prepared as an export gateway, so that it will include an established export documentation and customs office.

The Kariangau Industrial Zone will also be provided with a solid and liquid waste processing facility. This will process the industrial waste before it is recycled, after which the cleaned water is returned to the sea or river. A central facility is planned, so that each part of the industrial zone will not be required to build its own.

Somber Industrial Zone

The town government decided that small-scale industries scattered all around Balikpapan should be developed and improved. For environmental reasons, it was decided in 1994 to relocate small-scale/household industries. In 1995, the Somber Industrial Zone facilities were built for this purpose, but in 1997, the development was delayed due to a lack of funds. In 2000, the program was reinstated.

The Somber Industrial Zone plan seeks to:

• Relocate small-scale/household industries in Balikpapan
• Guide and develop small business
• Increase businessmen and employee welfare with fair competition and open opportunities for extensification and diversification
• Establish a multi-functional, well-formed, and representative small-scale/household industrial area.
• Establish an 80-family facility for beancurd/tempe makers
• Build up other small-scale industries along with the beancurd/tempe industry, including charcoal bricks, nata de soya, cassava products, confections, toys, and waste processing

This mangrove-dominated zone has moderate eco-tourism activities and facilities. It functions as a supporting zone for Balikpapan’s eco-tourism industry. The Mangrove Area's operations are based on the following considerations:

• The Mangrove Area is a buffer zone for land and sea life.
• The Mangrove Area is intended for tourists concerned about the environment. Efforts are made to decrease any negative influence on the ecosystem.

Transportation

Balikpapan's airport is the Sepinggan International Airport. This is the second busiest Indonesian airport after Soekarno-Hatta International Airport and permits large aircraft.

The airport is one of the five principle sites in Indonesia where Muslims begin the pilgrimage to Mecca, the 'Hajj'. Between 1996 and 1997, the airport served over 4,500 East Kalimantan pilgrims, and from 1997 to 1998, it served pilgrims from East Kalimantan, South Kalimantan, Central Sulawesi, and North Sulawesi.

Instead of the airport, Balikpapan also has a seaport called 'Semayang' which has many destinations to Surabaya, Makasssar, Jakarta, Pare-Pare, and Manado. in 1990s, transportation using ships was very popular. But after the booming of so many new airlines with very cheap price, people now prefer travelling using airplanes to the ships.

Ferry is also another alternative for travelling to other places within coastal areas in East Kalimantan, such as Penajam.

References