North Bali toll road: The lifeline of Bali's economy
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Toll Utara Bali: Urat nadi perekonomian Bali
21 August 2024
By Alifian Asmaaysi, Ni Lu Anggela, and Harian Noris Saputra
The construction of a toll road in northern Bali is expected to enhance economic equity on the Island of the Gods, addressing the substantial disparity between the northern and southern regions of the province. However, the certainty of the Gilimanuk-Mengwi toll road project remains uncertain.
The plan for a new toll road in northern Bali was revealed through a statement by Tourism and Creative Economy Minister Sandiaga Salahuddin Uno. "The one in the north is also being planned," he said when met by Bisnis in Jakarta on Monday (19/8).
He hopes that the plan for a new toll road in northern Bali can be designated as a priority project and is expected to be completed by the end of 2029.
With that, he added that tourism activities will not only be centred in southern Bali, but also in northern Bali.
"We hope it can be completed by the end of 2029," he said.
As of now, the government is still struggling to re-tender the Gilimanuk-Mengwi toll road project in search of an investor who will also act as an operator.
The re-tender process was initiated due to several factors, including the readiness of investors to finance the toll road project, which is planned to span 96.84 kilometres (km).
Sandi explained that a more innovative funding structure is needed to resolve the funding issue.
“I believe that with the right investor, the Mengwi-Gilimanuk [toll road] can be constructed. The same applies to the new toll road in the north,” he stated.
Bisnis reported that the groundbreaking ceremony for the Gilimanuk-Mengwi toll road took place on 10 September 2022.
However, the project is currently being re-tendered because the initiator failed to secure funding for the construction.
The toll road is planned to be constructed across three regencies, 13 subdistricts, and 58 villages. The investment cost for the Gilimanuk-Mengwi toll road is estimated to reach Rp24.6 trillion.
The Gilimanuk-Mengwi toll road is divided into three sections: Section 1 (Gilimanuk-Pekutatan) spans 53.6 km, Section 2 (Pekutatan-Soka) spans 24.3 km, and Section 3 (Soka-Mengwi) spans 18.9 km.
Meanwhile, Public Works and Housing (PUPR) Minister Basuki Hadimuljono has unveiled a new plan concerning a toll road in northern Bali.
He explained that, despite the feasibility study, the plan to construct a toll road in northern Bali will not be implemented in the near future.
Additionally, Basuki mentioned that the toll road has not yet been scheduled for a tender.
“The toll road currently in the prequalification process is the one from Mengwi to Gilimanuk, not the one in northern Bali,” he explained at the PUPR Ministry Office on Tuesday (20/8).
On the other hand, Ida Bagus Raka Suardana, an economist from Universitas Pendidikan Nasional, explained that road infrastructure development in Bali, including the Gilimanuk-Mengwi toll road that is expected to be connected to the toll road in northern Bali and the subway construction, will positively impact the economy in Bali.
He views the development of toll roads as an effort to equalise the economic conditions of southern Bali, northern Bali, and western Bali.
He believes that the majority of the benefits from tourism are enjoyed by southern Bali, including Badung, Denpasar, Gianyar, and Tabanan, as it serves as the main entry point for tourists.
Meanwhile, he added that due to the long travel distances, western and northern Bali rarely become tourist destinations.
Suardana mentioned that public mobility will improve with the development of adequate road infrastructure.
“Economically, it will have a positive impact as public mobility will improve and accelerate. Prior to the construction of the toll road, there will be land acquisitions, which will result in fresh funds being distributed to the public,” Suardana explained to Bisnis.
Even though the economic potential will increase, Suardana urged the government to focus on the environmental impact of the development.
He noted that road construction will alter the function of many lands. "Most of the lands are productive lands," he said.
Recovery
In other developments, tourism in Bali in the first half of 2024 has recovered from the pressures of the Covid-19 pandemic.
This is evidenced by the number of foreign tourists in the first half of this year surpassing pre-pandemic levels.
Data from Statistics Indonesia (BPS) for Bali shows that international tourist visits in the first half of 2024 reached 2.91 million individuals. In comparison, during the same period in 2019, before the Covid-19 pandemic, the number of international tourist visits was only 2.85 million.
International tourist visits to the province are expected to grow throughout the remainder of this year. Additionally, the government has issued a Golden Visa, which is anticipated to boost the economy by attracting high-quality tourism to the Island of the Gods.
Meanwhile, Bali Real Estate Indonesia (REI) believes that this will revitalise the property business in the province.
Bali REI Central Executive Board Chairperson Anak Agung Ngurah Made Setiawan explained that the Golden Visa can be a catalyst for property sales and leases in Bali in the long term.
He added that property developers must take advantage of this opportunity by preparing a supply that aligns with the needs of Golden Visa holders.
According to the property businessman, commonly known as Ajik Setiawan, Bali is the first choice for Golden Visa holders as it offers a comfortable environment for living and conducting business.
This is evident from the villas that have been selling like hot cakes since the pandemic, with numbers even increasing in 2023 and continuing to rise.
According to him, dozens of villas prepared by developers have been sold out. Most of the buyers are from outside Bali, particularly from Jakarta, and include entrepreneurs, celebrities, mixed families, and foreigners who have married Indonesians.
The favourite areas are Nusa Dua, Jimbaran, Sanur, and Ubud.
Even though land in Bali is limited, he added that villa construction is still feasible as they do not take up as much space compared to other structures.
Ajik mentioned that developers will still focus on the feasibility of areas to prevent overcapacity.
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