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 Lombok Deal With Emaar Expires

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PostSubject: Lombok Deal With Emaar Expires   Thu Jan 14, 2010 9:51 pm

Lombok Deal With Emaar Expires, says Indonesia

The Indonesian government says an agreement with Dubai-based Emaar Properties to develop a massive tourist resort on Lombok has officially expired, but Emaar will be given the chance to sign a new deal.

State-Owned Enterprises Minister Mustafa Abubakar confirmed late on Tuesday that the agreement with Emaar to develop a $600 million resort in Lombok was no longer valid, and said the government would proceed with the project whether it could come to terms with Emaar or not.

“We’re still considering Emaar because we want to maintain a good relationship between the two countries,” Mustafa said. “But if the new round of negotiations come to a deadlock, the government will find other investors because we have already invested a lot money in the project, including the new international airport.”

Both parties had agreed to a Dec. 31 deadline to solve numerous problems, including poor access to roads and communications, difficulties acquiring land and disputes over stakes in the venture. The ministry said the deadline would not be extended but that while this deal had failed, the government was willing to open fresh talks with Emaar about re-starting the much-delayed project.

Harry Susetyo, a deputy at the SOE Ministry, said Emaar had enjoyed a strong position under the previous agreement, and the ministry would seek more favorable terms if talks were restarted.

The deal would also be revalued, he said.

Emaar said earlier this month that both parties had agreed to meet in Jakarta this month to discuss the next steps in project. It said the talks would focus on finalizing key details such as questions surrounding the transfer of available land.

Mustafa said the ministry wanted both parties to closely examine all the risks involved, including the fairness of the structure of the joint venture.

The project, announced by former Vice President Jusuf Kalla in May 2007, envisioned a 1,200-hectare development that would transform the Kuta and Tanjung A’an beaches into a world-class resort run by a joint venture between Emaar, state-owned Bali Tourism Development Corp. and local governments.

However, infrastructure problems sapped Emaar’s enthusiasm for the project, and Dubai’s debt crisis may have strained it financially. No one from Emaar was available to comment on Wednesday.

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