Riau Islands nets $2b Chinese investment

Urip Hudiono, The Jakarta Post, Batam

Efforts by the Riau Islands to attract foreign direct investment are off to a good start, with the sealing on Sunday of a US$2 billion investment commitment in the tourism sector between a group of entrepreneurs from the province and their counterparts from China.

The group also signed a memorandum of understanding with the Maldivian Chamber of Commerce and Industry -- for a similar cooperation in the tourism sector -- and established the Riau Islands Development Acceleration Agency, with the local administration to follow up the implementation of the FDI agreements.

Head of the Riau Islands Development Acceleration Agency Rufinus I. Susanto said the $2 billion investment commitment from China would be realized in the form of developing several of the province's islands into private tourist resorts.

"Many investors from China have expressed their interest in building private tourist resorts on the Riau Islands," he said. "And not just resorts in a single area, but turning the whole island into an integrated, complete tourist resort."

For that purpose, the agency will make an inventory of all the islands and select those that have potential as resort islands.

"That, and the construction of access roads on the selected islands, will be the priority of the investment commitment in the first year," he said, adding the development of the islands would boost the province's overall economic condition and improve its infrastructure.

The commitment itself will be realized within a five-year time frame, and will be carried out through PT Naga Putra Sakti, a company established by the consortium of the province's local entrepreneurs and Chinese investors.

Rufinus explained the Chinese investors were also interested in building airstrips on the planned resort islands for direct flights to and from China, as well as the construction of interconnecting bridges between certain resort islands.

"They want these -- especially the direct flight airstrips -- for easier access to the resort islands, without having to go through the hassle of immigration procedures," he said.

"Of course there is a possibility that this might create problems regarding the country's immigration regulations, but the agency is ready to work this out with the local administration."

Meanwhile, commenting on the newly signed MOU between Riau Islands province and the Maldives, president of the Maldivian Chamber of Commerce and Industry Mohamed Salih was optimistic that it would be beneficial for both parties.

"The Riau Islands will be a good investment place for Maldivian tourist resort businesses, while the Riau Islands can learn from the Maldives' experience in managing its island tourism sector," he said.

The Maldives are renowned for having among the finest beach resorts in the Indian Ocean region.

The development of resort islands will be another investment landmark for the newly established province of Riau Islands, following Batam island, already renowned for the major industrial investments in its free-trade zones.