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Foreign, local investors lining up to help develop Indonesia's new capital city, says Luhut

Jakarta Post - February 26, 2020

Riza Roidila Mufti, Jakarta – More than 30 local and foreign investors have expressed an interest in developing Indonesia's new capital city in North Penajam Paser and Kutai Kertanegara in East Kalimantan, according to a top government official.

"We want all of them to be high-quality partners because I don't want non-green [investment] in the new capital city," Coordinating Maritime and Investment Affairs Minister Luhut Pandjaitan said during a seminar about the new capital's development in Jakarta on Wednesday.

He added that the investors were from Singapore, Japan, the United States and the United Arab Emirates, among other countries.

The government has placed the total cost of the capital's development at Rp 466 trillion (US$33.7 billion). Around 54.4 percent will come from public-private partnerships, 26.4 percent from the private sector and just 19.2 percent from the state budget.

Of the 30 investors, Luhut went on to say, five represented companies from the transportation sector, one from the telecommunications sector, six from the industrial sector, four that operated in retail and one in the housing sector.

There are also four companies that are interested in drinking water development, three in providing electricity, one in providing waste management and one company in offering health-related services.

Some are hoping to participate in the new capital's pooling fund, including three international institutions offering their services for sovereign wealth funds, one for bilateral funds, five companies for securities and one company for insurance products.

Luhut said the development of the new capital city would encourage partnerships between the public sector, private sector, universities and state-owned enterprises, in which each would have different roles.

"Government buildings will be developed using the state budget. We will give entertainment, education and health to the private sector to develop."

Indonesia's new capital will be developed as a smart, compact forest city that will follow the principles of sustainability.

The government's focus for 2020 is preparing a master plan and technical plan and procuring land. The construction of government buildings and other major facilities will take place from 2022 to 2024.

The government is set to conduct a soft groundbreaking in July to start building road access to the city. The relocation will start in 2024.

Source: https://www.thejakartapost.com/news/2020/02/26/foreign-local-investors-lining-up-to-help-develop-indonesias-new-capital-city-says-luhut.html