Constrained By Hosting The Mandalika MotoGP Fee, Observers Urge Local Governments Not To Leave Their Hands

Photo: Doc. Antara

A month before the implementation of the Indonesian Series MotoGP at the Pertamina Mandalika International Circuit, Central Lombok, West Nusa Tenggara, there was still a hosting fee issue that had to be paid to Dorna Sports in the amount of Rp. 231 billion. The NTB Regional Government was urged not to let go. Moreover, the organizers of the most prestigious motorcycle racing event in the world are betting on the credibility of the state.

The local government must not let go and must participate in financing the hosting fee worth Rp231 billion for the implementation of the MotoGP world championship at the Pertamina Mandalika International Circuit on 27-29 September 2024. If not, the most prestigious motorcycle racing event in the world and has an impact on the acceleration of the NTB economy, the sustainability is questioned.

Economic observer who is also a lecturer at the Faculty of Economics and Business, Mataram University, Dr M Firmansyah said, the value of hosting fees reaching Rp 231 billion is not small. However, according to Firmansyah, MotoGP must be able to run.

"Hosting fees can be paid through collaboration between the central government and local governments, as well as other business institutions. Including PT Injourney Tourism Development Corporation or ITDC. All parties need it for this," said Firmansyah, Tuesday, August 27.

According to Firmansyah, the MotoGP event is a gamble for Indonesia.

"Because this is related to the name Indonesia in the eyes of the world. The country's credibility is at stake. The world will think that it wants to hold an event but doesn't have money. Of course the country will be ashamed," said Firmansyah.

Therefore, according to Firmansyah, the central government needs to sit down together with local governments. Then discuss how much the remaining budget is available and how much can be paid. So that this MotoGP can be implemented in NTB.

Firmansyah said, if it cannot be paid, various consequences await. In addition to having to pay a penalty of hundreds of billions, other and worst consequences are the sustainability of the Mandalika MotoGP in the future.

ITDC of course needs to lead the brain. How to get a hosting fee at this short time. If you don't pay, you can charge from Dorna 75 percent of the hosting fee. So, pay hundreds of billions in the end. There may be other consequences that accompany, for example, the sustainability of events in Mandalika in the future is questionable," said Firmansyah.

Professor of Sociology at Mataram University, Prof. Dr. Ir Lalu Wiresapta Karyadi M.Si, added that the implementation of the Mandalika MotoGP is not just an economic issue or a sports business. The Mandalika MotoGP has remained an image and dignity of the Indonesian nation.

"Mandalika, the islands of Lombok, NTB and Indonesia are increasingly becoming the world's attention because of the MotoGP event. Isn't this also a promotion for tourism development and others. So in our saving as residents of NTB, the implementation of MotoGP 2024 is a necessity, it must be implemented," said Lalu Wiresapta.

Since it was first held in 2022, the MotoGP event at the Pertamina Mandalika International Circuit, Kuta, Pujut, Central Lombok, has had a significant economic impact on Indonesia and NTB.

In 2023, the MotoGP multiplier effect nationally reached IDR 4.3 trillion and IDR 4.5 trillion in 2022. MotoGP Mandalika 2023 has a positive impact on the output performance of tourism at the national level of 0.019 percent 0.023 percent. Also on the absorption of the workforce in the tourism sector at the national level of 20,233 people - 24,030 people.

Specifically for Central Lombok, NTB, which is the location for the MotoGP event, namely Mandalika, in 2023 received an increase in tourism-related economic activity by 13.45 percent and contributed to GDRB by 7.97 percent.

President Joko Widodo at the 2022 Bank Indonesia annual meeting in Jakarta said that the development of Mandalika made it one of the new economic points for tourism outside Java.

In addition, MotoGP organizers are also able to build Indonesia's branding and good image, especially NTB as a super priority destination.

The impact of organizing MotoGP in Mandalika and developing this special economic area must continue. So that all parties, especially local governments, must provide support.

Currently, PT InJourney Tourism Development Corporation or ITDC, has a license to hold MotoGP until 2040. Related to this, ITDC requires support from the central government and local governments for the payment of hosting fees for the implementation of MotoGP.

Hosting fee or commitment fee is a fee that must be paid by the promoter to hold MotoGP to Dorna Sports as the holder of exclusive commercial rights MotoGP. The cost of hosting the 2024 MotoGP fee is 12,849,638 Euros or Rp231.29 billion, including PPh and VAT. Apart from this, there are still operator fees of around Rp100 billion which are always the responsibility and are paid by ITDC.

The amount of the hosting fee is certainly an increasingly heavy burden for ITDC. Therefore, support from the government, especially the NTB Regional Government and Central Lombok Regency, is very much needed in organizing MotoGP.

Related to that, the Ministry of Home Affairs itself has written a letter regarding the support of local governments in the development of five super priority tourism destinations on June 10, 2024.

In the letter, it was clearly stated that local governments were obliged to provide support for the implementation of this event by eliminating part of the APBD. Unfortunately, even though there has been a letter from the Ministry of Home Affairs, until now there has been no visible attempt from the Regional Government to carry out the instructions.

Therefore, according to Lalu Wiresatta, the NTB Regional Government as the host should appear and contribute not only to host fees. Especially if you remember the impact of sociopsiologists other than the multiplier effect of the economy like this so far.

According to Firmansyah, economically, MotoGP is certainly beneficial for the region. The multiplier effect exists and is relatively large.

"But the problem is that not many have become local original income or PAD or directly into cash. This is partly felt by the local government. For local governments, maybe PAD income that can be spent next year is more important than macro numbers. Because the APBD of these areas is relatively small," said Firmansyah.

Therefore, in addition to ensuring that the Mandalika MotoGP this year can run, institutional improvements to the Mandalika MotoGP in 2025 must also be a concern.

"The year 2025 must already have institutions that focus on organizing MotoGP with various conditions, develop the regional economy and regions in NTB. For example, by developing products and event-events. So that MotoGP can be felt in real terms, even by the community," said Firmansyah.

According to him, the characteristics of economic institutions that are not yet proper are when it is not clear who is doing what. Worse yet, if the rules of the game actually exist, but they are not implemented.

The pattern above must give birth to uncertainty. Uncertainty, potentially Mandeg activities. If it is not certain, it has not been bound by clear rules of the game, it will be a problem at late times, when each party disagrees," said Firmansyah.