Emaar to meet on $600m deal

Emaar executives will meet government officials from Indonesia next week to try to salvage a much delayed $600m waterfront resort on the island of Lombok.

Emaar executives will meet government officials from Indonesia next week to try to salvage a much delayed US$600 million (Dh2.2 billion) waterfront resort in the country. The Gulf's largest property developer began talks with the Indonesian government in 2007 to transform a 7km stretch of waterfront on the island of Lombok.

Emaar International, a unit of the Dubai-based developer, established an office in Jakarta in 2008 to speed a joint venture agreement with PT Pengembangan Pariwisata Bali (Persero), a government-backed firm. But progress has been slow because of a disagreement over the share of equity in the project and land acquisition problems. Eko Bambang Sutedjo, the West Nusa Tenggara government secretary, said in a report to the Jakarta Globe yesterday that Emaar had until March to commit to its $600m planned investment in the project, adding that the authority was already speaking to alternative investors should they fail to reach an agreement.

Emaar said that both joint venture partners "have already invested in the project and are keen to address outstanding issues". A meeting between the two sides is scheduled for Monday. They last met in June when it was decided to extend the completion deadline for the joint venture agreement until the end of last year. "In the most recent meeting held in Dubai, both parties discussed the progress to date and identified next steps and action plans," Emaar said.

One of the biggest stumbling blocks has been securing ownership of the land on which the project will be built, said Majed Azzam, a property analyst at Al Futtaim HC Securities. "They still haven't got the land. It's still under negotiation," said Mr Azzam. The development, set to include residential villas, hotels, shopping facilities and golf courses, is seen as a key part of a plan to boost Lombok's appeal to international tourists and challenge Bali as a high-profile resort destination.

Emaar is seeking to expand its international footprint after playing a key role in transforming the skyline of Dubai over the past six years, which culminated earlier this month with the opening of the Burj Khalifa, the world's tallest tower. The collapse of property prices in the emirate has led the firm to focus on projects elsewhere in the Middle East and Asia. The completion of the Marassi Beach Clubhouse, a component of its Marassi development in Egypt, helped to swing Emaar back into profit in the third quarter of last year after three preceding quarterly losses.