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Bali’s $20 billion urban railway project already delayed despite groundbreaking ceremony

Despite a highly publicized groundbreaking ceremony earlier this year, Bali leaders have confirmed that construction of the new Bali Urban Railway Network, also known as the Bali Metro or Bali LRT, has not yet started. The project is still in the planning and study phases. This revelation has raised questions about the timeline for the project and its anticipated impact on the island’s infrastructure and real estate market.

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The project was initially announced with great enthusiasm, aiming to revolutionize transportation in Bali by reducing congestion and connecting key economic zones. However, recent statements from government officials indicate that construction is not expected to begin soon.

Minister Luhut Binsar Pandjaitan emphasizes ongoing studies

Indonesian Minister for Investment and Maritime Affairs, Luhut Binsar Pandjaitan, stated that further studies are needed before construction can commence. “We have secured all the financing, but I believe a study is still ongoing,” he mentioned during a press event in Jakarta. These studies will assess how the railway lines will intersect and operate around key locations, including Ngurah Rai Airport and nearby resorts.

The minister’s comments indicate a careful approach to ensure the project’s viability and effectiveness. For potential investors and residents, this means that while the project promises significant improvements, patience will be essential as the details are finalized.

Plans for an underground LRT connecting major economic zones

The proposed urban railway network plans to establish an underground Light Rail Transit (LRT) system that will connect Ngurah Rai Airport to key destinations, including the Kura-Kura Special Economic Zone, Sanur, and potentially Canggu. The goal is to enhance accessibility and connectivity to Bali’s major economic areas, which could greatly influence property values and investment opportunities.

Minister Pandjaitan stated, “We are currently focused on finalizing the design for the underground LRT, which will connect Ngurah Rai Airport to the special economic area known as Kura-Kura Bali, as well as to Sanur. There are also plans to potentially extend it to Canggu in the future.” Improved infrastructure in these regions is expected to increase their attractiveness for both tourists and real estate investors.

$20 billion of investment secured with projected completion by 2031

An investment exceeding $20 billion has been secured for the project through partnerships among PT Indotek, China Railway Construction Corporation (CRCC), and PT Sarana Bali Dwipa Jaya (SBDJ). According to Ari Askhara, the Director of PT Sarana Bali Dwipa Jaya, initial construction is expected to be completed by early 2028, with the service projected to be fully operational by 2031.

Askhara discussed fare projections, stating, “We expect tourist tariffs to range from $35 to $40 per week. This means that, whenever and wherever you want to go, travel will be more efficient.” He also mentioned that local residents might enjoy free travel with a Bali ID card, highlighting the efforts to benefit both tourists and the local community.

Part of broader efforts to improve infrastructure and manage over-tourism in Bali

The railway network is one of several initiatives designed to mitigate the negative impacts of mass tourism in the densely populated southern region of Bali. With rising congestion in the area, leaders are exploring innovative solutions to improve infrastructure and promote sustainable tourism.

Plans are underway for a new toll road designed to connect the northern and southern parts of the island. Sandiaga Uno, the Minister of Tourism and Creative Economy, announced that the central government has approved the proposal, and contracts are expected to be tendered in 2025. He stated, “If this new toll road is built, it is hoped that travel time to North Bali will be around 90 minutes.”

The Ministry of Tourism has introduced initiatives aimed at promoting the lesser-known areas of Bali to both domestic and international visitors. This includes new tour packages and the establishment of digital information centers to encourage exploration of the island’s northern and western regions.

Implications for real estate investors

For foreigners considering investing in Bali real estate or purchasing a holiday home, recent infrastructure developments could greatly increase property values in key areas. Enhanced connectivity and transportation networks are making regions like Sanur and Canggu more accessible, likely leading to a rise in demand for real estate in these locations.

The delays in construction indicate that investors should keep a close eye on the project’s progress. Bali’s leaders are taking a strategic approach by combining long-term infrastructure projects with efforts to manage over-tourism. This strategy aims to create a sustainable and appealing environment for both residents and investors.

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