The authorities have decided against taking out a loan of 1.67 trillion rupiah, about 92 million dollars, in 2027 for the tunnel between Denpasar and Canggu.
The start of work has been pushed back to 2028. A technical review showed that construction could not begin in 2027. The authorities chose not to take out the loan in advance, before work had started, because the money would have sat idle while interest still accrued on it.
For now, land for the road will be acquired using the budget's own revenue. The loan was to come from the state-owned company PT Sarana Multi Infrastruktur, which lends to regional governments for infrastructure, and from the Balinese bank BPD Bali.
The authorities will now return to it in 2028, when construction is scheduled to begin. The 2027 budget still needs final approval from local lawmakers.
The tunnel is part of a new road from Denpasar through Canggu to Mengwi. It will cover 2.4 kilometres of the 3.2-kilometre section running from the western end of Gatot Subroto Street to Canggu, at a depth of about 15 metres.
An above-ground road here would have had to cut through densely built-up areas, requiring homes to be demolished and residents to be relocated. This was deemed impossible, which is why the road is being taken underground.
In September, the project was still being discussed with the Chinese company Shanghai Tunnel Engineering, which presented options ranging from one to three tunnels. Before construction, a separate study was planned to assess whether the project was technically and financially feasible.
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