Bali News

Since a Memorandum of Understanding between the state power company PT PLN and Indonesian Real Estate Association REI was signed, number of new houses getting electricity supply has increased. However there are still somewhere between 30% to 40% of completely built houses could not be sold for absence of electricity supply. The situation was exposed by Chairman of REI Bali, Sukadana Wendha on Friday (September 11th).

Sukadhana believes that absence of electricity supply was caused by the fact that PT PLN does not have sufficient materials to expand their network to reach the houses. PLN’s investment to buy material and expand its network has been decreased. “PLN Bali has positively responded the MoU. Unfortunately limitation of PLN’s investment in network expansion has brought negative impact to real estate business. A lot of completely built house could not be sold as the did not get electricity supply yet. Customers would not buy the house without electricity supply. With a lot of capital blocked by the unsold houses, developers could not make any further expansions”, he said.

At the moment application for electrical supply for these houses have been submitted to PT PLN. They are now in waiting position. Sukadana hopes that PLN can make the electricity supply to these houses available so developer can sell them. “To avoid similar problem in the future, developers are expected to submit a list of development plan so PT PLN can prioritize their network expansion accordingly”, he said.

Furthermore Sukadana admitted that property sector is quite a risky sector to invest. In addition to demand of large sum of investment, property sector is also very sensitive to external factors. To make another example, he pointed to global economic crisis which has held sales of completely built houses, whilst the developers have put significant investment to build them.

As widely known, in Bali now it is very difficult for people to get new connection or power expansion of electricity supply, as demand growth is significantly higher than growth of supply. Bali requires 490 megawatts in peak hours. With only 562 megawatts available, electricity supply in Bali is very sensitive even to a very small problem.

Some Seminyak villas built as commercial holiday accommodation have been sitting for months without a chance to enter commercial operation for unavailability of electricity supply, regardless the magnitude investments have been put by the owners. If the situation could not be changed in the near future, economic growth of Bali will be surely get affected.