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.

Booming Indonesia

The year 2010 is a new highlight for tourism to Indonesia. The lifting of EU ban on Indonesian airlines and a renewed offer of special destinations, attractions and events, as Dutch tourist you feel very welcome in Indonesia.

Historical ties

Netherlands and Indonesia have a long, historic relationship that dates from the 16th century. But in 2010, more than 1.6 million Dutch emotional ties with Indonesia through family relationships or because their parents or grandparents long lived on the Indonesian islands. Dutch tourists play an important role in tourism of Indonesia.

Most visited islands are: Java and Bali, but also Sumatra, Sulawesi, East and West Nusatenggara, Maluku and Papua are busy. The average tourist stays more than one months in Indonesia.

Investments in Indonesia

Indonesia is investing heavily in aviation infrastructure, facilities and infrastructure. In Makassar and Padang have built new airports and the airports of Manado and Surabaya are extended. There are also plans to increase capacity to satisfy sprung from the airport of Bali.

Lombok opens a new airport in 2010, (two times as large as the airport Bali). In South Lombok you it all, including the new mega-resort, with golf courses, hotels, recreation and shopping.

Sustainable Tourism

In addition to investment is also much attention for sustainable tourism and several new initiatives. Protection of nature, preservation of cultural practices and involvement of the local population are the major concerns.

More flights

Garuda Indonesia expected on June 1, 2010 its flights between Amsterdam and Jakarta to resume with brand new Airbus 330 -220 aircraft. This is the first Garuda back in Europe since 2004. Garuda, the Amsterdam-Jakarta-Dubai daily run. From including Jakarta and Bali, there are several domestic flights to other destinations with low cost and regular airlines. KLM launches new services simultaneously to Indonesia. Since December 8, 2009 they fly 3 times weekly Amsterdam-Singapore-Bali with Boeing 777-300 aircraft.

Tourism numbers

In 2008, Indonesia welcomed over 6.2 million international visitors. Singapore, Malaysia, Australia, Japan and China are the five main tourist source countries. Netherlands accounts for 2.3% of the visitors. In 2008 traveled over 140,000 Dutch to Indonesia, a growth of 31% over 2007. In the first six months of 2009 was an increase in the number of visitors from the Netherlands. In 2010 a further growth expected.

Source: Ministry of Culture and Tourism of the Republic of Indonesia. Fotografie: Shutterstock.

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