panorama destination

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Foreign Investment Funds Komodo Airport Expansion
16 January 2020 | Written by dtnweb

On 26th December 2019, the Indonesian government inked a deal with a group of Singaporean investors that will lead to the expansion of Komodo International Airport in East Nusa Tenggara (NTT). In a move that’s expected to set a precedent, this is the first time an Indonesian government has handed over operational control of a state airport to foreign enterprise.

The airport will be run by a consortium of PT Cardig Aero Services and Singapore’s Changi Airports International Pte Ltd, who were successful in their bid for the project. According to the agreement, Komodo Airport will be upgraded, as part of a five-year expansion project worth a reported USD85.7 million.

According to initial plans, the airport runways will be extended to accommodate bigger planes, opening the door to lucrative commercial flights from countries such as China, India and Japan. According to Indonesian Transportation Minister Budi Karya Sumadi, the expansion will increase Komodo Airport’s capacity six times over, so it can handle up to four million passengers per year. The move towards private investment represents a new direction for Indonesia, with the government looking to unshackle development from public spending.

 “International connectivity is important to us,” said Mr. Sumadi, in a recent statement quoted by the Jakarta Post. “Although we are a big country, the [transportation] hub for Southeast Asia is Singapore. If we cooperate with Singapore, it will indirectly [attract] passengers from there to Labuan Bajo,” he added.

Even before the ink has dried on this deal with the Singapore consortium, Indonesia has already identified several other airports for similar investment. Other projects opened for bids in 2020 include the Sam Ratulangi airport in Manado city, North Sulawesi; another in Singkawang, West Kalimantan; and Kuala Namu airport on the outskirts of Medan in North Sumatra.

President Joko Widodo (known locally as Jokowi) has declared Labuan Bajo a “super priority” tourist destination, as part of government plans to upgrade infrastructure nationwide and create “10 New Bali” destinations across the archipelago. Other locations earmarked for development include Mandalika in Lombok, Borobudur in Central Java, Likupang in North Sulawesi and Lake Toba in North Sumatra.

In November 2019, Mr. Viktor Bungtilu Laiskodat, who is the Governor of East Nusa Tenggara, outlined his vision for Komodo National Park– to turn it into a “super premium” tourism destination, by restricting permits to only the most affluent of visitors. His proposals were echoed more recently by Tourism and Creative Economy Minister for East Nusa Tenggara, Mr. Wishnutama Kusubandio.

In order to bring their plans to fruition, a dramatic overhaul would be required for the region’s infrastructure, including better transport links and more high-end hotels. In this context, the new development project for Komodo Airport appears to be a significant building block in the overall vision for Komodo National Park.

Komodo International Airport (commonly referred to in Indonesia as Bandar Udara Internasional Komodo) is located near the town of Labuan Bajo on the island of Flores in East Nusa Tenggara province. Since it first opened in September 2013, the airport has already seen expansion to meet the growing demand from international tourists for connections to the surrounding area – a UNESCO World Heritage Site and one of the world’s most celebrated wildlife destinations.

On 27 December 2015, President Joko Widodo inaugurated a new modern terminal at the airport. At the time it was heralded for its ability to expand the airport’s capacity from 150,000 to around 1.5 million annual passengers. Now, just four years later, this has grown to 4 million; an illustration of the region’s booming popularity and a sign of further changes to come.