Bali wins Rp 15.27 trillion investment in first half
Despite the current economic slowdown, Bali remains on investors’ radar, attracting a total of Rp 15.27 trillion (US$ 1.62 billion) in investment in the January to June period.
Gde Suarjana, head of the province’s economic and development agency, shared with Bali Daily recently that the administration had targeted Rp 18.29 trillion in investment by the end of 2012.
“But we have obtained Rp 15.27 trillion in investment in the first half. We are very grateful for this achievement,” Suarjana said.
Suarjana elaborated that the total Rp 15.27 trillion investment came from foreign investment valued at Rp 840 billion; domestic investment worth Rp 7.6 trillion; private sector investment at Rp 6.1 trillion and government investment valued at Rp 730 billion.
“We are optimistic that we can reach the target of Rp 18.29 trillion investment by the end of this year, in order to achieve economic growth of 6.57 percent in 2012,” he said.
According to the provincial administration, the total realization of investment for 2011 reached Rp 11.7 trillion from both domestic and foreign investors.
Suarjana felt confident that many investors still eyed Bali as a good investment location because of its secure conditions. “They feel secure when they put their money in Bali,” he said.
Suarjana added that the tourism sector still dominated investment on the island. This development has been largely concentrated in the south, particularly Denpasar, Badung and Gianyar.
“Actually, we keep encouraging investors, especially in the agricultural sector, to invest in other parts of Bali, but it is not easy. Most investors prefer to invest in tourism in southern Bali,” he added.
A survey released last year by the Bali branch of the Indonesian Hotels and Restaurants Association (PHRI Bali) showed that Bali had 2,260 star-rated hotels, 88.5 percent of which were situated in the south.
Governor Made Mangku Pastika issued a moratorium on the construction of new hotels in southern Bali in early 2011 with the aim of spreading development to other parts of Bali. Unfortunately, the policy was rejected by the island’s local leaders.
Meanwhile, investment made by the central government has been in the construction of the Benoa–Tuban–Nusa Dua toll road project, which is intended to solve the chronic traffic jams on the island’s main “tourism highway”. The construction of the 12-kilometer toll road is estimated to cost Rp 2.49 trillion, with completion expected by 2013.
There is also the ongoing construction of the Dewa Ruci underpass at the Dewa Ruci junction, a busy intersection next to Mall Bali Galeria in Kuta. It is a critical point of convergence for traffic to and from the island’s most significant tourism areas, including Ngurah Rai International Airport, Nusa Dua, Kuta, Sanur, Denpasar and Ubud. Prolonged gridlock is a common sight at and around the intersection. The underpass will be 450 meters long and is estimated to cost Rp 136 billion, funded from the state budget.
Separately, the Association of Kuta Hotel Executives’ chairman, Gusti Kade Sutawa, said that the government would not be able to draw investors to put their money in other parts of Bali unless they improved infrastructure. “Investing in north Bali, for instance, might not be easy. The government has to upgrade all the necessary infrastructure, then investors will be more likely to go there,” Sutawa said.