The Indonesian government has earmarked 9.4 trillion rupiah (US$668 million) for the development of basic utilities and supporting infrastructure in the five super priority destinations next year.
Of the total budget, Lake Toba has been allotted 2.2 trillion rupiah; the Borobudur area, 2.1 trillion; Labuan Bajo, 300 billion; Mandalika 1.9 trillion; and the remaining will go towards Likupang, the latest added development area in North Sulawesi.
With the funding injection, Indonesian president Joko Widodo expects the development of the infrastructure to be finalised by 2020 so that private investors can start building facilities in those areas.
The government and relevant stakeholders are finalising the Integrated Tourism Master Plan for the super priority destinations.
In the meantime, the Indonesia Investment Coordinating Board (BKPM) also offers super deduction tax for investors in the destinations.
These latest developments were revealed at the third Coordination Meeting of Ministry of Tourism with Related Government Agencies 2019 in Jakarta last week.
Indonesia minister of tourism Arief Yahya said: “Basic utilities and basic infrastructure development is the government’s commitment to the investors. We have done the detailed engineering design and the critical success factor of each destination has been addressed.”
Arief elaborated that the critical success factors in the Borobudur area – which includes the Yogyakarta-Solo-Semarang triangle – are the construction of the new Yogyakarta International Airport, which is targeted to be fully operational by March 2020, and the development of a bypass road to Borobudur.
Over in Lombok, development works include the construction of the MotoGP Circuit in Mandalika, a bypass road between the Lombok International Airport and Mandalika, and an extension of the airport runway.
He said that with the new infrastructure in place, investors are expected to start developing facilities in those areas.
To attract more investors to inject money into those destinations in the meantime, BKPM’s deputy of planning Ikmal Lukman said: “BKPM offers investors the ease of direct investment in these special economic zones and the advantage of super deduction tax in talent development.”
Correction: This story has been updated to reflect the correct amount of money allocated to Labuan Bajo’s development. It should be 300 billion rupiah, not 6.3 trillion as earlier reported.