State construction firms, PT PP Tbk (IDX: PTPP), PT. Wijaya Tbk (IDX: WIKA), and PT Bunga Raya Lestari won the construction of the Mandalika Urban and Tourism Infrastructure Project package I located with worth Rp940 billion (US$65.96 million). The project located in Central Lombok district, West Nusa Tenggara and need investment of Rp14 trillion.

Both state-owned enterprises hold 80 percent at the project. CEO of PTPP, Novel Arsyad, the contract had signed on Tuesday (03/02) with PT Pembangunan Pariwisata (ITDC), as the project owner. The project work is targeted completed in two years plus a one-year maintenance period.

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To support, the company’ business expansion in this year, the issuer has planned to releases Rupiah bond and SUKUK with total values of Rp2 trillion. The notes will have three and five years of tenure. PTPP has appointed PT Mandiri Sekuritas, PT Samuel Sekuritas, PT BRI Danareksa Sekuritas, and PT BNI Sekuritas as joint-lead underwriters in this corporate action.

Beside Mandalika, other focus of the builder are Cilacap Apartment, Balikpapan Apartment, Pertamina Balikpapan Warehouse and the Refinery project in Balikpapan. Other Projects must be completed in this year are Manado – Bitung Toll Road, Alumina Smelter, Kolaka Smelter, power plant in Timor Leste and North Sulawesi, Semarang – Demak Toll Road, and Makassar New Port.

Until January 2021, the contraction firm has won Rp810 billion of contracts. This year, PTPP targeting to obtained new contracts up to Rp30.1 trillion. While, Wijaya Karya has listed three series of bond and SUKUK with total amount of Rp3 trillion with coupon rate 8.5 – 9.75 percent and tenure three to seven years.

Acting as underwriters are PT BRI Danareksa Sekuritas, PT Mandiri Sekuritas, and PT RHB Sekuritas. PT Pemeringkat Efek Indonesia has assigned an idA rating for the bonds and idA syariah for the SUKUK to be issued by the issuer. The management explained most of the proceeds will be used entirely to pay off the principal loans of Rp2.5 trillion.

ITDC is developer of the Nusa Dua tourism area in Bali and the Mandalika Special Economic Zone in West Nusa Tenggara. According to the deputy minister of state own enterprises (SOEs), Kartika Wirjoatmodjo, in this areas, the government aimed to hold the 2021 MotoGP racing.

The construction of this project uses the PreFinanced Project scheme in order to develop the Mandalika Circuit area on an area of ​​52.5 hectares within the Mandalika Super Priority Tourism Destination area. The circuit has a track length of 4.31 kilometers and is the first highway circuit in the world to be built from the concept stage.

“We are optimistic that the ITDC collaboration with PTPP will support the acceleration of the development of the Mandalika Street Circuit national project which will be used to hold the Indonesian MotoGP world event starting in 2021,” said CEO of ITDC, Abdulbar M. Mansoer last year. The Mandalika Circuit development is targeted to be completed by mid-2021.

“The holding of the MotoGP event is believed to be able to increase the number of tourist visits to Indonesia to reach 300,000 people per year and provide a strong positioning for Indonesia as a leading sports entertainment destination in the Asian region, so we are optimistic that this event will be a driving force for the revival of Indonesian tourism after Pandemic ,“ adds by the CEO.

For this project, the government has provided support through the ministries and SOEs in the form of building direct access roads along the 17.39 kilometers with the right of way a 50-meter wide road from Lombok International Airport to The Mandalika by the ministry of public works and public housing.

Then, the addition of runway length, cargo upgrade and accessibility, apron expansion and taxiway widening as well as promotion activities at Lombok International Airport carried out by PT Angkasa Pura I, cargo and cruise facility development by PT Pelindo III and PT ASDP, addition of electricity capacity in the region by PT Perusahaan Listrik Negara, and the opening of new bus routes serving a number of areas in Lombok to The Mandalika by Perum DAMRI.

ITDC is a state firm that has a business line to build and develop tourism areas in the country. The company is assigned to develop tourism destinations outside of Bali. In 2017 the Mandalika has officially operated as a Special Economic Zone and has since attracted Real Estate Investment of US$1.3 billion.

At present, The Mandalika is being developed as a world-class tourism destination, with various international standard facilities and attractions.