Recent news on EMAAR

Just in case you haven't seen it.

JJ

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http://thejakartaglobe.com/business/officials-throw-lombok-project-a-final-lifeline/355257

Janeman Latul

Officials Throw Lombok Project A Final Lifeline
Local and central government officials are mounting a last-ditch attempt to salvage a giant resort plan for Lombok that all but collapsed earlier this month.

The West Nusa Tenggara government and the Investment Coordinating Board (BKPM) now say they will give Dubai-based developer Emaar Properties until March to commit to the massive resort project. However, they say it is “game over” for Emaar’s protected status as a partner.

West Nusa Tenggara government secretary Eko Bambang Sutedjo said on Wednesday that Emaar had one more month to commit to its $600 million planned investment in the project.

He said officials will fly to Dubai next month for a last round of talks aimed at convincing Emaar to commit, but added that negotiations are already under way with several other investors.

The Lombok project, unveiled 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.

According to documents related to talks between the parties, poor access to roads and communications, land-acquisition problems and disputes over the terms of the joint venture sapped Emaar’s enthusiasm for the deal. The parties had agreed to a Dec. 31, 2009, deadline to solve the problems, but this was missed.

BKPM Chairman Gita Wirjawan stressed that media reports on Wednesday that BKPM had “terminated” its involvement with Emaar were inaccurate. However, he acknowledged that talks were just a step away from collapse and confirmed that BKPM, the State-Owned Enterprises Ministry and the Tourism Ministry had been re-evaluating the project over the past two months, under the leadership of Coordinating Minister for the Economy Hatta Rajasa.

“We’ve come to the conclusion to take a firm decision on the project against Emaar. Therefore, we’re ready to find alternative investors. It’s actually game over for Emaar,” he said.

However, Eko insisted a lifeline was being prepared for Emaar. He said that “based on a meeting with Pak Gita and the provincial government, we’ve decided to give Emaar until March to realize its investment.”

BKPM representatives and the West Nusa Tenggara governor will travel to Dubai next month to seek a commitment from Emaar, he said. “Since Emaar didn’t keep its promise to come to Indonesia this month, the government took the initiative to meet them in Dubai and settle the matter once and for all,” he said.

Since the implementation of the local autonomy law in 2004, local governments have had a larger role in making decisions on investments in their region, while the central government’s role is to facilitate any deal.

Despite the extended deadline, Gita remained pessimistic about the likelihood of a deal. “This project has been stalled for more than three years and now Dubai World [a major state-owned company] has suffered a debt crisis and is having to restructure $59 billion in debt,” he said. “This will have an impact on Emaar, too, as the company is currently embarking on several big projects in the Middle East. It means the company’s financial capacity is tight.”

The government had bent over backward to satisfy Emaar, including building the Lombok International Airport, which is scheduled to be completed in June, as well as access roads to Kuta Beach, Gita said. “But those efforts weren’t reciprocated by Emaar,” he said.

A Litany of Missed Deadlines

May 2007: Then-Vice President Jusuf Kalla and Emaar Properties chairman Mohammed Bin Ali Alabbar announce plans for the ambitious project.

May 2008: Emaar opens an office in Jakarta to oversee the project. Both parties agree to allow six months to finish the preliminary plan concerning supporting infrastructure, the resolution of land-acquisition issues, and the establishment of joint venture company PT Emaar Lombok.

November 2008: The deadline on preconditions passes, with the government requesting an extension from Emaar until March 2009.

March 2009: Emaar closes its Jakarta office because the government is still unable to provide necessary details of the plan. The deadline is extended for three months after senior United Arab Emirates government officials intervene.

June 2009: A dispute develops over shares in the joint venture company. The deadline is extended until Dec. 31.

October 2009: West Nusa Tenggara government delegation goes to Dubai to talk to Emaar representatives in an effort to get the project started. Emaar declines to commit.

December 2009: No action is taken by either party as the Dec. 31 deadline expires.

Jan.13 2009: SOE Minister Mustafa Abubakar says the government is seeking new investors and gives an ultimatum to Emaar.

Why I,m not surprised!So now they try the famous indonesian deadline solution.The so called jam karet deadline,december,march,juni,oktober,december,march 2011 and so on,and so on.

Emaar have a reputation for making difficult large projects like this work. It speaks volumes that they haven't been able to acheive that with Indonesia. I seriously doubt there is anyone who would take this on under the current circumstances. Thankyou Allah.

May be God is smiling on Kuta folks.

I am really curious why the Indonesian officialdom is keen to resuscitate this project. Do they really believe it will benefit the people in NTB?

News reporting here about the UAE economy sounds very bleak. How on earth will EMAAR get financing for a project that will take several years for a decent return?

Freogirl and Tjabamerah: you can relax. At this rate, I suspect the Lombok lifestyle is not going to change for a decade.






Josi

To me it is very simple why the politicians want this deal to go through. Their time in office is limited. If they want to see any "personal benefit" from this it has to happen soon. Which is, I guess, one of the reasons it ran in to trouble in the first place. Too many gov. officials expecting something out of it. Do you really think these officials buy their way in to power to help the local population? I don't think so. Oops! Sorry if I offended anyone out there.

Hi Freo,

it seems like Allah listened to you. According to the last issue of The Lombok Guide it's now official that the Emaar deal is off. They where refering to an article in The Jakarta Post. It also says that BKPM has met with other interested investors .

Anita

It sounds like the project is a no-go from Dubhai investor's point of view, but has the Indonesian government given up on it? I suspect the government corporation promoting tourism is deeply interested in Lombok and only a deep pocket investor will show interest.

I am excerpting below an item from "Economist". The tall tower in Dubhai under Emaar management is shut down. They were charging $40 for going to the top but now they are refunding the money.

When it rains, it pours.

Josi

DUBAI: Witnesses and a Dubai rescue official say a faulty elevator was to blame for the shutdown of the observation deck on the world's tallest tower.

The closure has blocked public access to the only part of the Burj Khalifa that has so far opened.

Visitors to the viewing floor told The Associated Press there was a loud bang followed by a cloud of dust coming from one of the tower's elevator shafts Saturday evening.

Some time later, they say rescue crews arrived and helped people out of an elevator car that had been stuck between floors.

Abu Naseer, a spokesman for Dubai's civil defense department, confirmed the incident Tuesday. He says 15 people were rescued unharmed.