Investasi Tanggul Laut Raksasa: Peluang atau Jebakan Utang?
President Prabowo Subianto has unveiled plans to construct a massive giant sea wall stretching from the coast of Cilegon, Banten to Gresik, East Java. This 958-kilometer wall aims to combat tidal flooding caused by land subsidence along the northern coast of Java, which has been sinking at a rate of 1-25 cm per year. Additionally, rising sea levels of 1-15 cm per year, exacerbated by climate change, have further worsened the situation.
### **Challenges Ahead**
The construction of this sea wall was initially started in 2014 to address land subsidence in the coastal areas of Jakarta. However, as the project evolved, the government decided to extend the sea wall along the northern coast of Java. The estimated total budget required for this ambitious project is around US$50 billion, equivalent to Rp816 trillion based on an exchange rate of Rp 16,328 per dollar.
Due to the staggering costs involved, this giant sea wall project is no longer classified as a National Strategic Project (PSN) but rather as a mega infrastructure project that heavily relies on fresh funding from private sources.
### **Government Pursues Investment Opportunities**
Feeling the pinch of insufficient reliance on the State Budget (APBN), the government is actively seeking alternative sources of funding, including public-private partnership (PPP) schemes with foreign entities. In October 2024, the Nanjing Hydraulic Resources Institute from China expressed interest in collaborating on this project. President Prabowo even discussed the project’s potential with President Xi Jinping during his visit to Beijing in November.
In December 2024, Prabowo once again invited dozens of Japanese investors to participate in the giant sea wall project during a meeting with the Japan-Indonesia Association (JAPINDA) delegation at the Merdeka Palace in Jakarta. However, as of now, there has been no definitive confirmation from either country regarding their involvement in this mega infrastructure project.
### **Expert Opinion and Transparency Concerns**
Dr. M. Rizal Taufikurahman, Head of the Macroeconomic and Finance Center at the Institute for Development of Economics and Finance (INDEF), believes that the government has not yet formulated a solid investment plan for potential investors, leading to a decline in investor interest. He emphasized the importance of thorough business calculations and ROI projections for investors over a 40-year period.
Moreover, the government has not publicly released a transparent blueprint for the sea wall project, and feasibility studies are still ongoing. Dr. Rizal expressed frustration at the lack of data provided by the Ministry of Public Works and Public Housing (PUPR) regarding the project.
As the fate of this ambitious sea wall project hangs in the balance, it remains to be seen whether the government can address the concerns raised by experts and ensure the transparency needed to attract the necessary investments for this colossal undertaking.
