The Tanjung Lesung Special Economic Zone (SEZ or KEK in Indonesian language) hosts an eco-luxury 5-star hotel worth IDR1.75 trillion. Established in 2021, the hotel in Pandeglang regency, Banten, is one of the Investment Coordinating Board (BKPM)’s 47 investment projects.
Banten is a province in Indonesia, which capital is Serang. The province has a population of 12 million (in 2021) and an area of 9,662.92 square kilometers. The majority of its population is Muslim with 94.62%. Currently, the province has four investment opportunities, including Tanjung Lesung. The province has 15 industrial regions, 2 airports, 5 ports, 38 educational facilities, 75 hotels and 88 hospitals.
Meanwhile, the BKPM was established in 1973. Currently, Investment Minister Bahlil Lahadalia chairs the board since 2021. The board is in charge of implementing policy and service coordination in investing based on Indonesian regulations.
Opportunities on hotel infrastructure
The investment of the 5-star hotel in Tanjung Lesung is worth IDR1.75 trillion and began in 2021. It offers an interest rate of return (IRR) of 12.15%, a net present value (NPV) of IDR725.43 billion and a payback period of 10.25 years.
Tanjung Lesung SEZ is located in the most western part of Java Island. It becomes a leading tourist area for domestic and foreign tourists due to the nature and the water sport activities. The government, through the BKPM, has supported the provincial administration’s efforts to promote its economic growth.
Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan explained that the construction of Serang-Panimbang toll road – which will connect Tanjung Lesung and Ujung Kulon National Park – would create a spur of economic growth, surpassing national growth of 5.44%.
The investment project will focus on eco-luxury theme that offers 5-star luxury service. The location has a grandeur view of white sand beach, mangrove forests and a golf course with gorgeous sunset view. The site is very close to Ujung Kulon National Park, which is inhabited by 608 fauna species, including the famous Javanese one-horn rhinoceros, and over 700 flora species. The place is facing the famous legendary Krakatoa Island in the Sunda Strait. The 1883 Krakatoa eruption was recorded as the deadliest and the most destructive volcanic event, claiming the lives of around 36,500 people.
The eco-luxury site is about 2.5 hours from Indonesia’s main gateway the Soekarno-Hatta International Airport and the Greater Jakarta metropolitan by the Serang-Panimbang toll road. Meanwhile, the construction of the new toll road will connect Jakarta to Tanjung Lesung and the traveling time will take 2 hours.
The government is willing to give incentives to investors such as tax holidays, tax allowances, ease of licensing, no import fee and the availability of supporting infrastructure.
Risks of investment in the region
In 2018, Tanjung Lesung was hit by Banten earthquake that resulted in tsunami. A total of 426 people died in the disaster. The Indonesian Hotel and Restaurant Association (PHRI) said the area suffered occupancy rate drop by 70% after the disasters.
The sea abrasion protection can also preserve the vegetation in the area from the threat of sea abrasion.
State-owned construction firm PT Waskita Karya Senior Vice Corporate Secretary Novianto Ari Nugroho said the construction of the project is needed to protect the coastline from sea abrasion threat and the destruction of national roads.
The existence of construction of a tsunami barrier at the Tanjung Lesung SEZ beach makes it a safe place.
“This project supports the economic growth of the tourism area,” Nugroho said.
On the other hand, the required land for the toll road project is still facing land ownership problems.
“We ask the Banten community leaders to work together to help [the government] acquire the land,” said Minister Pandjaitan.
