Danantara reveals progress on Hajj Village project in Mecca

Jakarta (ANTARA) - Danantara Investment Management Agency (BPI) has revealed that it is still awaiting the continuation of the land tender auction results for the development of the Hajj Village project in Mecca, Saudi Arabia. Danantara’s Chief Investment Officer (CIO), Pandu Sjahrir, stated that the finalisation process is taking longer than expected due to the geopolitical situation in the Middle East region. “We’re waiting from the government there (Saudi Arabia). Actually, we’re also chasing it up. From the side of the lot that we’ve bid on, there should have been news earlier, but we’re still waiting. So we’re always communicating,” Pandu said at the Fitch Ratings Annual Indonesia Conference in Jakarta on Thursday. The dynamics in the region are also affecting the process. Pandu understands that the Kingdom of Saudi Arabia’s government is currently prioritising national stability and defence interests first. “They’re also experiencing shocks in Saudi. So, in my opinion, their main interest is their national defence. That might be their primary interest,” he said. Nevertheless, Danantara continues to maintain communication with Saudi Arabia regarding the finalisation of the Hajj Village land tender. “We’re pursuing (communication), but we also know that the Middle East is experiencing shocks,” Pandu explained. Despite this, Pandu assured that the acquired asset, the Novotel Thakher Makkah hotel, can already be used by Indonesian hajj pilgrims in 2026. “It can already be used. The rating is good, everyone gives it 5 stars. Everyone who uses it is very happy,” he stated. As previously reported, Danantara is currently finalising further negotiations within the auction mechanism managed by the Royal Commission for Makkah City and Holy Sites (RCMC) for opportunities in other areas around the Masjidil Haram. As an initial foundation, the Thakher area includes the operational Novotel Thakher Makkah hotel with around 1,461 rooms in three towers, as well as approximately 4.4 hectares of development land in a strategic corridor 2-3 kilometres from the Masjidil Haram. Pandu explained that the Hajj Complex development is being carried out in stages, with the Thakher area as the initial base because its assets are already available and ready for development. “We’re building the hajj complex in stages. The Thakher area is the initial foundation, while we’re also following the RCMC auction process for other area opportunities that are closer to the centre of hajj and umrah activities,” he said. In the future, the area is designed to expand to around 6,000 rooms with a capacity of about 22,000 pilgrims, or around 10 percent of the total annual Indonesian hajj pilgrims. The development is not only focused on accommodation but also includes a more integrated pilgrim service ecosystem, such as retail facilities, logistics support, and other supporting services. In the next stage, Danantara is also continuing to monitor the auction process run by RCMC, which includes bidding, technical and financial evaluation, and investor selection in accordance with the master plan for Makkah City. Pandu emphasised that the Hajj Complex development is part of Danantara’s long-term strategy, carried out selectively and based on comprehensive studies. For the Thakher area, investments are prepared in stages, including strengthening the initial assets and capital expenditure (Capex) for further development. The project is targeted to enter the groundbreaking phase in 2026, with additional hotel operations planned to begin in 2029. “Our focus is to ensure every step is done prudently, measured, and provides long-term benefits. We’re building this Hajj Complex as a cross-generational strategic project,” Pandu said.