East Java seeks $22.3 billion to develop economy, tourism

East Java seeks $22.3 billion to develop economy, tourism
A view of the city centre in Surabaya, Indonesia.
PHOTO: The Straits Times

A development agency in East Java is aiming to attract at least Rp 220 trillion (S$22.3 billion) in investment within the next 10 years to develop the province as a tourist destination.

According to the Suramadu Development Agency (BPWS), the province is now famous for the Suramadu Bridge, which connects Surabaya to the island of Madura.

"In the future, we want to develop more than the bridge; we want theme parks, museums, business centres and other attractions," agency head Agus Wahyudi said on Friday.

The development would also include basic amenities such as hotels, he said, adding that the agency, which had been assigned in a 2008 presidential decree to develop parts of the area in East Java, would help businesspeople interested in investing in the area.

"If they are interested, we will try to fix the road access to the [location of the investment]," Agus added.

The agency has invested in improving the road connecting Bangkalan and Sumenep regencies in Madura, as well as developing water systems in the two regencies.

"The Bangkalan-Sumenep road has been upgraded to national-class road, and we will keep improving the road there," he said.

The agency has also realised Rp 2.1 trillion of infrastructure investment in the area since 2011, according to Agus.

The BPWS is in charge of developing 250 hectares (ha) of land in Surabaya, 600 ha of land in Madura and 600 more ha across the port areas of East Java.

However, problems relating to land acquisition have left the agency with only 4 ha of land in Surabaya and 40 ha in Madura available for development.

Meanwhile, the head of the Tourism Ministry's investment division, Hengky Manurung, listed promising places to invest in Madura, especially in Sumenep regency.

Sumenep boasts the white-sand Lombang Beach and 126 islands, the most famous of which is Gili Iyang, which is renowned for its fresh air.

The ministry estimates that 21 ha of land in Lombang Beach are available for investment, including building starred hotels, which are currently lacking in the area, as well as restaurants, cafes, golf courses and villas.

"Tourism will, of course, create a multiplier effect in the area," he said.

The ministry also revealed that realised investment in tourism in the third quarter this year hit US$821.22 million, exceeding total 2014 investment in the sector, which reached US$684.44 million.

Meanwhile, to attract further investment, the agency is considering working with the Indonesia Tourism Development Corporation (ITDC), which is currently in charge of developing Mandalika in West Nusa Tenggara.

Mandalika is one of the 10 major destinations to be developed by the government this year, alongside Tanjung Lesung in Banten and the Thousand Islands in Jakarta.

ITDC recently saw the groundbreaking of the first five-star hotel in Mandalika. Three investors, including from France and the US, are committed to developing three more five-stars hotels in the area next year.

"At the very least, we can share our know-how," ITDC business and development director Edwin Darmasetiawan said.

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