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The US$ 600 Million Question

Confusion Reigns Over Status of Emaar Mega Tourism Project in Lombok.

(7/31/2010) A fair degree of confusion prevails over the future of a US$600 mega tourism project on Bali's near neighbor of Lombok.

A pet project of Indonesia's former Vice-President Jusuf Kalla, the 1,200 hectare site was proposed to house hotels, condominiums and a golf course financed by Dubai-based property Developer Emaar Properties. The project hailed by its champions as having the potential to create a popular destination in Indonesia for travelers from the Middle East - provided the impetus for the massive investment in a new international airport nearing completion in Lombok.

The future of the Emaar Project became doubtful last year when the Dubai investors called for changes in land ownership rules. These objections from Dubai, whether real or posed, were put forth at a time when the Dubai property bubble was bursting, causing some quarters to conjecture that Emaar was no longer in a financial position to carry through with its original commitment for Lombok.

Countering this view, Emaar recently declared that the idle project is still on track. As reported by the Jakarta Globe, the Dubai property company has issued a statement declaring it has made a "total commitment" to its Indonesian partner, the Bali Tourism Development Corporation (BTDC). The statement from Emaar was made apparently to forestall a threat by the Indonesian government to re-tender the project and find a replacement investor.

Recently the chairman of the Indonesian foreign Investment Coordinating Board (BKPM), Gita Wirjawan, signaled interest in reviving the long-stalled Lombok project has come from Abu Dhabi, Qatar, the United Arab Emirates and India.

A spokesman for Emaar is insisting that the company "has strong financial fundamentals and will undertake all strategic projects across its key markets."

Adding to the confusion, the Indonesian Ambassador to the United Arab Emirates, Mohammad Supriyadi, issued a statement last March stating that Emaar had abandoned the project.