Testing the Viability of Coastal Investment

Jakarta (ANTARA) - As land subsidence and rising sea levels increasingly pressure Indonesia’s coasts, debates regarding development often stop at determining how large a sea wall should be built.

However, what is more decisive is whether investments in coastal protection are capable of maintaining the economic value of the protected areas in the long term.

If physical risks, maintenance costs, and changes in regional value are not factored in from the outset, coastal protection projects have the potential to create massive assets with ever-increasing costs. This burden will ultimately be borne not only by the projects themselves but also by the national budget and the economic activities that depend on coastal areas.

The northern coast of Java serves as the most vivid illustration. This region contributes approximately 27 per cent to the national Gross Domestic Product and faces pressure from land subsidence and rising sea levels.

In several locations, land subsidence on Java’s northern coast can reach 20 centimetres per year, although the rate varies between regions. This condition increases the risk of tidal flooding and threatens infrastructure and economic activities concentrated along the coast.

In Jakarta, the Minister of National Development Planning (PPN)/Head of the National Development Planning Agency (Bappenas), Rachmat Pambudy, stated that the risks of flooding, infrastructure damage, and the loss of productive land could result in losses of approximately US$186 million annually.

This figure demonstrates that coastal risks already have calculable economic consequences, rather than being merely environmental threats that are only felt when a disaster occurs.

The consideration must therefore shift from how much damage could occur to whether the projects built today remain viable when the physical conditions of the region change. Roads, ports, industrial estates, residential areas, and utility networks have economic lifespans spanning decades.

If land subsidence, rising sea levels, maintenance requirements, and the possibility of operational disruptions are not calculated from the beginning, investment costs that appear cheap may become expensive throughout the asset’s lifespan.

Changing the calculation.