• 10 December 2018
Solving Indonesia’s Construction Conundrum

Solving Indonesia’s Construction Conundrum

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Indonesia is huge. Think of Bangkok to Tokyo, and the distance from Medan in western Sumatra to Jayapura in the far east of the archipelago is around 100 km further, at over 4,700 km. That’s no problem for a tourism market focused primarily on Jakarta and Bali, but with the Indonesian government’s recent plans to develop ten additional destinations within the country, some less accessible regions will soon be attracting investment. Developing hotels on remote islands with no electricity, no transport infrastructure, and no skilled construction workers was therefore the challenge facing the discussion panel at HICAP Singapore.

The Modular Approach

The first solution came from Gerard Saliot of Euro Asia Management, whose modular units represent an innovative approach at a project in the Raja Ampat district of Indonesia – about as far from Jakarta as you can get. According to Gerard, the modules can be built by skilled contractors under supervision in Surabaya before being transported to the site. The cost may be around 15% higher than traditional building methods, but the timeframe involved is sharply reduced. To give some idea, Gerard explained that a 120-room 3-star hotel could be constructed within 9-12 months for around US$6 million – while the transportation cost would typically vary from 5-13% depending on location.

Further advantages of modular construction are the fact that traffic to the site – cement trucks and worker transport – can be cut by 75%, and also that the site itself doesn’t always require the kind of preparation that removes all the trees, so the natural environment that attracts guests can be preserved. This can help in keeping temperatures down – a vital concern for Andrew Dixon, whose Nikoi Island project has inspired a second development being built wholly from bamboo.

Bamboo

While Nikoi Island caters to the luxury segment, there is no air-conditioning and no TV, and while this keeps the diesel generator costs down, the design and surroundings become the key for guests to stay cool. The result is a unique experience which is easily accessible from Singapore, and very popular with Singaporeans.

Bamboo provides a solution to the question of sustainability, and its strong, lightweight durability makes it an excellent building material. The drawback, as Andrew put it, is that bamboo “needs its boots on and its umbrella up” if it is to survive for the long haul. That means a concrete foundation, and the need to ensure that the bamboo is properly treated before construction takes place. It can, at least, be replaced easily if necessary. Another problem is that although bamboo grows quickly, the harvesting window is relatively short, so finding a suitable source can be a challenge. With elaborate designs involved, constructing a bamboo resort also isn’t going to be any faster than conventional construction – whereas for the final panel member, Roy Sindhunirmala of Twenty One Development, speed is critical, which is why he is leaning towards canvas for his Lombok project.

Luxury Tents

As a developer, everything is about money,” said Roy. “That means high room rates and low investment costs.” Luxury tents allow Roy to meet both requirements – and for those luxury aspects which a tent cannot so easily provide, such as bathrooms, Gerard was quick to point out that modular luxury bathrooms are not only possible, but have been recently provided by his company for a tented development in Abu Dhabi.

With no building permits required for tents, the development time is shortened, and the inherent flexibility has one final advantage to confer. According to the panel, it is perfectly feasible to set up in one location, attract further development in the area through your own mere presence, and then sell your land as the prices rise, before moving on to the next remote destination. With imagination, the possibilities are endless.

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