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A Moratorium on Moratoria

Regional Autonomy in Bali Places Calls for Moratorium on New Hotels at an Impasse

(7/13/2012) Bali Daily (The Jakarta Post) cites the 1999 law on regional autonomy that bestowed sweeping planning powers on mayors and regents as preventing the implementation of a moratorium on new hotels in South Bali, announced by governor Made Mangku Pastika in 2011.

Concerned that Bali is overbuilding its accommodation sector, the provincial administrators have repeatedly implored for a halt on new projects; a call ignored and resisted by the Badung, Denpasar and Gianyar who insist new developments are needed to broaden the tax base.

Ida Bagus Kade Subhiksu, the head of the Bali Tourism Authority (Kadisparda), said that the regency of Badung earned Rp. 1.1 trillion (US$116.6 million) in tax revenues, 76.19% derived from tourism-related businesses. Because of the desire to grow this number further, regency officials are ignoring pleas from local businesses and residents that Bali is buckling under the strain of rampant over-development.

A price war is underway in Bali among hotels competing for guest staying for shorter periods and spending less. The local water board - PAM is refusing new customers, unable to provide sufficient fresh water supplies for its existing customer base. PLN – the company that provides electricity is under strain, with 50,000 Balinese families living without an electrical connection. Flooding has become a severe problem in many populated portions of the island due poor drainage and overbuilding on lands that once absorb tropical rains. And, Bali’s roadways are so congested, more than tripling travel times of just a few years ago.

Leading the recalcitrance of regency officials to implement the moratorium is Vice-regent of Badung, I Ketut Sudikerta, who claims that, according to reports “from foreign friend,” there are still holiday periods in which hotel rooms are difficult to find.

Governor Pastika’s call for a moratorium enjoys widespread support from Bali businesses and resident together with officials from the Investment Coordinating Board (BKPM) – all calling for a halt on new permits for hotels.