Tag Archives: Investment

Emaar the boot?

Govt gives Emaar the boot, looks for new funds

Andi Haswidi , The Jakarta Post | Wed, 01/27/2010 3:37 PM | Headlines

The government has decided to terminate all commitments with Dubai-based Emaar Properties on a plan to build a US$600 million mega-tourism project in Lombok, West Nusa Tenggara.

Investment Coordinating Board (BKPM) chairman Gita Wirjawan said Tuesday that Emaar had failed to meet its share of the bargain in developing the project.

Gita said the government, represented by the West Nusa Tenggara government, had followed through with its commitments, including building an airport – to be completed in June – a 31-kilometer road connecting Mataram to the airport and an 18-kilometer road from the airport to Kuta Beach.

“*Emaar* failed to reciprocate in kind. We have taken this decision to ensure fairness and we will look for other possibilities,” Gita said.

The mega-tourism project has been marked by finger-pointing since Emaar signed a joint venture agreement with the Bali Tourism Development Corporation (BTDC) in March 2008. The agreement included establishing a joint venture company called Emaar Lombok.

Emaar claimed last year that the Indonesian government had failed to follow through with some of its promises, citing in particular the clearance of a 1,200-hectare area of land required for construction.

In October, Alwi Shihab, Indonesia’s special envoy to the Middle East, who also worked extensively on the project, said the land dispute was solved and that the project would follow through.

Further development showed that around 1,000 hectares had been set aside by the government for the project but still required certification from the National Land Agency (BPN), while the remainder still belonged to local residents.

A disagreement surrounding the company’s investment contributions and ownership in the joint venture has also overshadowed the project.

State SOE Minister Mustafa Abubakar said earlier this month the deal with Emaar had expired, but the company would be given a chance to sign a new deal.

Both parties had agreed to a Dec. 31 deadline to solve the numerous problems plaguing the project. Mustafa said the deadline would not be extended but said he was willing to have fresh talks with Emaar about restarting the much-delayed project.

Gita hinted that the decision to kick Emaar out of Lombok was also in the interest of the property company as it was currently struggling from the impact of the financial crisis.

“Dubai World has been heavily affected by the financial crisis. They have to restructure $59 billion in debt. This will have repercussions on Emaar, which is based in Dubai.

“The company also embarked on massive projects in Saudi Arabia and the United Arab Emirates. There are a financial limitation. Secondly, they prefer to focus on settling their problems in the Middle East,” Gita said.

No Emaar official was available for comment Tuesday.

Gita said his office had been in talks with investors interested in replacing Emaar.

“We have met with interested investors. One from the Middle East and another from outside the region,” he said, refusing to elaborate further.

West Nusa Tenggara province, located just east of Bali, has become the central focus of the ministry’s tourism programs, with a specific program aiming to draw one million tourists to the province by 2012.

The province is rich in marine life and will be developed as the center for the pearl trade and ecotourism. Famous Lombok tourist sites include Senggigi Beach, the three Gili islands, Mt. Rinjani and Lake Segara Anak.

Tourist spots in the more secluded Sumbawa Island include Mt. Tambora, Moyo Island, Jelenga Beach and Maluk Beach.

Emaar eyes talks over $600m island resort

by Shane McGinley on Tuesday, 05 January 2010

Emaar Properties will meet with Indonesian authorities in early 2010 to address progress on its $600m planned resort development near Bali, the Dubai developer told Arabian Business on Tuesday.

The Jakarta Globe newspaper last week reported that Indonesian government officials appeared to be distancing themselves from Emaar as their joint venture agreement ran out on December 31.

The $600m Lombok project, launched by the former Indonesian Vice President Jusuf Kalla in May 2007, is planned to be a 1,200-hectare resort located at the Kuta and Tanjung A’an beaches. The project is a joint venture between Emaar, the state-owned Bali Tourism Development Corporation (BTDC) and local government.

In June 2009 at a meeting in Dubai, the Indonesian Government extended the joint venture between Emaar Indonesia and PT Pengembangan Pariwisata Bali (Persero), a government entity, to develop The Lombok Project by the end of the year.

“Emaar is working with Indonesian authorities with a focus on addressing the final pending areas, primarily in relation to transfer of available land. The two parties have agreed to meet in Jakarta in early 2010 to agree on the next steps regarding The Lombok Project,” Emaar said in a statement.

“Communication between Emaar and BTDC is still good. I think the plan could still go forward,” Hilmi Gasim, assistant to Alwi Shihab, the special Indonesian presidential envoy to the Middle East, told the Jakarta Globe

Lombok eyes 2012

BY LUC CITRINOT, ETN SENIOR MANAGING EDITOR ASIA | NOV 19, 2009

He speaks fluently English and Arabic and his clear way of talking makes a difference with some other Indonesians, rather shy when they have to speak in public. Muhammad Zainul Majdi is the current Governor of West Nusa Tenggara and belongs to this new generation of Indonesian politicians who start to give a new impetus to the World’s biggest archipelago. One of Majdi’s objectives is to turn Lombok into a major tourism destination, emulating Bali, its Western neighbour just 90 minutes away by high speed-boat. Lombok has been so far protected from massive tourism development.

But the Muslim-dominant Island has very big ambitions and feels that it has many assets. “We like to say that you can see Bali in Lombok but you cannot see Lombok in Bali”, likes to say the Governor, referring to the cultural diversity on the Island where local Sasak people cohabits since the dawn of age with Balinese communities. Lombok is indeed an interesting mix of culture where Sasak traditional villages are facing Balinese temples and where some local Muslims are praying indifferently in mosques or temples…

Lombok emergence as a tourism destination will be stimulated by the organization of a “Visit Year Lombok-Sumbawa”- due to come in 2012. Promotion just started with the hosting of TIME-Pasar Wisata, Indonesia’s professional incoming travel show, last October. This is the first time ever that Lombok is hosting an international event from this size and we are very happy about the outcome of the show as delegates seem very happy with this choice. We know that we make some mistakes but we will learn for the next edition of Pasar Wisata in 2010,” said Majdi. For the show hosting, the provincial government has given away INR 5 billion, the equivalent of US$ 532,000.

The objective is to boost over the next five years total arrivals from 250,000 to 450,000 foreign travelers. With domestic travelers, NTB hopes to be able then to welcome some 1.3 million visitors in a year. This will be a far outcry from Bali’s own tourist arrivals (over three million per year currently for both domestic and international travelers) but it still means a growth of over 20% per year over the next decade. More advertising, participation at international travel shows such as ITB are now firmly planned.

Major projects should boost arrivals to Lombok over the years to come: the development of a fully integrated resort area in the South of Lombok and the opening of a new airport in Central Lombok, 45 minutes away from the capital city Mataram. The first project was announced two years ago with Dubai-based investor Emaar Properties announcing to invest US$ 600 million to invest into five- and four-star hotels, a shopping mall, recreation areas, golf courses on a 1,200 hectare site. The final project is targeted to host 10,000 luxury villas, eight hotels and two 18-hole golf courses but it faced numerous delays due to the financial crisis, corruption problems and a lack of improvement in infrastructure. The project study has been extended by six months until year-end.

Development is however more advanced for the airport. According to the airport’s managing company Angkasa Pura, new Lombok International Airport should be finished by the first quarter of 2010 but it looks already that the facility will open later in the year as work is still going on the control tower. Once the first phase completed, the new airport will offer capacity for two million passengers while its 2,750 m runway will be able to take large aircraft such as the Airbus A330. “ We will then target new markets such as Australia or Hong Kong. Improving access is essential for our future” tells Lalu Gita Ariadi, Head of West Nusa Tenggara office of tourism. Another important project is the construction of a proper convention center with an investor from Singapore already showing interest.

Local authorities remain however optimistic about the future of the island as a destination. “Lombok gains increasingly fame among foreign travelers. We do still have some problems to find human resources matching international tourists’ expectations. But the future mega- resort in the South will contribute to improve sharply manpower quality,” estimates Awan Aswinabawa, Chairman of the Travel Expo Pasar Wisata. Progress will definitely be judged with the next hosting of Pasar Wisata in October 2010.

Bron: eturbonews.com