Friday, March 13, 2009

$600m Lombok Resorts Scrapped

Citing governmental paralysis and hinting that too many officials had their hands out, Dubai’s state-owned Emaar Properties PJSC has cancelled its massive $600 million property project that was to turn the pristine island of Lombok into another Bali.

“We have closed our office in Jakarta starting Friday,” said Elly Savitri, Emmar Indonesia’s human resources manager. “Emaar has pulled out of its operations in Indonesia because the government cannot comply with the terms of the agreement with our joint venture company.

“There have been too many delays on the realization of the project and the company just could not wait any more.”

Elly also said Emaar had spent Rp 50 billion ($4.2 million) in consultancy fees on master plans.

Winarno Sujas, the Tourism Ministry’s director for businesses and investment, told the Jakarta Globe on Friday that Vice President Jusuf Kalla had summoned the related ministries for a meeting this coming Wednesday in a bid to save the project.

The cancellation of the project — announced with great fanfare in May 2007 by Kalla — is an enormous black eye for the Indonesian government and the local government of Lombok, West Nusa Tenggara Province.

The announcement of the failure of the project follows the recent pullout of the Saudi Binladin Group from a project to invest as much as $4.3 billion in developing rice crops in Merauke, Papua Province.

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