Plans are underway for a multi-story development at the site of the 2002 Bali bombings that killed 202 people, Indonesian authorities said Friday, a decision that has angered neighbouring Australia which lost dozens of citizens in the attacks.
Some 88 Australian nationals were killed in the Bali bombings after radical Islamists detonated explosives outside the US consulate and two popular night spots on the Indonesian resort island, killing mostly Western holidaymakers.
Developers were granted permission to build on the site of the destroyed Sari Club in December last year, said Made Agus Aryawan, head of the local investment board.
"This land belongs to an individual, it’s private property," Aryawan told AFP.
"We cannot stop the owner from using it and regulations allow him to do so."
The decision has been slammed in Australia, with Prime Minister Scott Morrison calling it "deeply distressing".
Morrison, whose struggling centre-right government is up for election in several weeks' time, said Canberra was working with Indonesian authorities to resolve the issue.
Australia suffered the highest number of casualties in the explosions, which were the worst peacetime attacks on its citizens.
Local terror network Jemaah Islamiyah (JI) was blamed for the bombings in which people from at least 21 countries, including 38 Indonesians, were killed.
Aryawan said the vacant lot in the heart of bustling Kuta had been empty since 2002 and the permit would be valid for 30 years.
The five-storey complex will include a restaurant, offices and monument on the top floor, community leader I Gusti Agung Made Agung told AFP.
"I know many Australians died," said Agung, from Kuta's Institute for Community Empowerment.
"But if they wanted to build a memorial, they should have bought the lot."