PT Cardig Aero Service Tbk, Changi Airports International Pte Ltd and Changi Airports Mena Pte Ltd as the winner of Komodo Airport project in East Labuan Bajo, East Nusa Tenggara - Photo by Finance Ministry

JAKARTA (TheInsiderStories) – Indonesian government picked the consortium of PT Cardig Aero Service Tbk (IDX: CASS),

 International Pte Ltd (CAI) and Changi Airports Mena Pte Ltd as the winner of Komodo Airport project in East Labuan Bajo, East Nusa Tenggara, said the officials on Thursday (12/26). The consortium will invest Rp1.2 trillion (US$85.71 million) at the project.

According to minister of transportation, Budi Karya Sumadi, the consortium won the auction after competing with two other consortium which submitted the proposal to the ministry. They were chosen because having international competency.

The selected consortium will do the cooperation scheme between government and business with concession period of 25 years. It hope, the team will apply their experience in developing Changi Airports in Singapore to Komodo Airports.

“Indonesia is lack of international connection since the Asia hub is in the Singapore. Therefore, we cooperate with Singapore to attract the visitors continue their trips to Labuan Bajo,” he said.

Sumadi stated, beside invest Rp1.2 trillion, the aviation companies will provide working capital Rp5.7 trillion in 25 years. After the concession period over, the airport will be return to the government.

He adds, the working group will design, build, and finance the airport, both in air infrastructure as well as in field infrastructure. In the air side, the team will extend and solidify the runway from 2,400 meters to 2,750 meters, so that the airport will be able to accommodate Airbus A300 fleet. The development of the runway is estimated to be completed in two years.

Then, in the field side, the investors to build the domestic and international passenger terminals, offices and buildings, and other supporting facilities. By the development, the airport is expected to gather 4 million passengers in the next 10 years from the old capacity of only 500,000 passengers.

Earlier, as many as 70 investors were interested in developing of Komodo Airport. The development airport required a total investment of Rp3 trillion, consisted of Rp1.17 trillion for capital expenditure and Rp1.83 trillion for operational expenditure.

Companies that have expressed interest were Muhibbah Engineering Berhad, GMR Group, Astra Infra, PT GVK Services Indonesia, Serco Asia Pacific, Bank of Tokyo-MUFG, Itochu Corporation, Cardig Aero Services, BAM International, PT Wijaya Karya Gedung Tbk (IDX: WEGE), PT PGAS Solution, PT Sojitz Indonesia, PT Adhi Karya (IDX: ADHI), PT PP Tbk (IDX: PTPP), PT Waskita Karya Tbk (IDX: WSKT) and China Construction Engineering Eight Division.

It was said the project will get a government guarantee through PT Penjaminan Infrastruktur Indonesia. Investment returns of this project will be obtained through tariffs for airport facility service users during the concession period 25 year.

Labuan Bajo is one of four super priority tourism destinations appointed by the government along with Lake Toba in North Sumatra, Borobudur Temple in Central Java and Lombok – Mandalika area in West Nusa Tenggara. The government plans to keep accelerating the development of four priority tourist destinations to attract the foreign tourist.

It is said the tourism sector is one of the main foreign exchange-earners. In 2018, Indonesia’s foreign exchange income from the tourism sector reached US$17 billion, rose $2 billion from $15 billion a year earlier. And in 2019, the government sets the target of the tourism sector to contribute $20 billion in foreign exchange.

US$1: Rp14,000

Written by Staff Editor, Email: theinsiderstories@gmail.com