New Capital: IKN Authority starts investor selection
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Bisnis Indonesia - Ibu Kota Baru: Otorita IKN mulai seleksi investor
4 April 2023
By: Afiffah Rahmah Nurdifa
Jakarta - Nusantara Capital City (IKN) Authority is currently going through at least 167 letters of interest for construction in IKN.
IKN Authority Head Bambang Susantono said that, out of the 167 letters of interest that have been received, 50% were domestic and 50% were from foreign investors in 16 different countries.
“We are currently selecting which ones are suitable and serious to build in IKN,” he said at a hearing with House of Representatives (DPR) Commission II on Monday (3/4).
Bambang affirmed that the 167 letters of interest received still needed to be selected. He stated that investors still needed to carry out a feasibility study to invest in IKN.
Bambang emphasised that eight investors were interested in investing in hospital and educational facility constructions.
“There are investors who are interested in [constructing] hospitals, elementary schools, middle schools, high schools, and universities. They are currently carrying out an internal study. When an investor conducts a feasibility study, they will ask for data from us, so we will deliver it to the field to also observe the field,” he said.
Out of the eight letters of interest to construct hospitals, he affirmed that only two companies received a permit from IKN Authority.
IKN Authority Deputy Head Dhony Rahajoe added that six companies wanted to construct housing to be occupied by 16,990 state civil apparatus (ASN) who will relocate to IKN in 2024.
He is targeting 17,000 units to be constructed with funding from the state budget (APBN) and investments through the public-private partnership (PPP) scheme.
“Housing for 17,000 [ASN] from the government is set to be constructed for Rp9.4 trillion. There are 5 companies that have obtained a principal licence. Six, but there is one that cannot be exposed yet,” Dhony said.
The five companies that have received a letter to proceed (SIPP) from IKN Authority are PT Summarecon Agung Tbk (SMRA), Nusantara Consortium (RBN CCFG), Korean Land and Housing Corporation (KLHC), PT Perintis Triniti Properti Tbk (Triniti Consortium), and PT Nindya Karya.
The investors will build housing for ASN that are set to be completed in 2024. A funding of Rp9.4 trillion from the APBN will be allocated to build 2,585 units.
“Almost Rp50 trillion has been allocated [from PPP] for housing. Yes, around Rp47 trillion [from 6 companies],” he said.
The Public Works and Housing (PUPR) Ministry explained that the other 9,295 units were planned to be built using the PPP scheme with an estimated cost of Rp35.8 trillion.
To build 5,110 flats, the government needs investments from the private sector or housing developers that reach Rp6.2 trillion. With that amount, the total cost required to build 16,990 ASN housing units reaches Rp51.4 trillion.
Previously, there were two new national investors that received a SIPP from IKN Authority to build ASN housing in Nusantara, namely PT Perintis Triniti Properti Tbk (Triniti Consortium) and PT Nindya Karya. The Triniti consortium is investing Rp1.8 trillion to build seven towers and Nindya is investing Rp1.42 trillion to build 8 towers.
Bambang also explained that the Triniti consortium and Nindya has received a SIPP from IKN Authority to build ASN housing with three previous investors. The business scheme for both investors is PPP.
“With two additional investors, ASN housing construction is believed to accelerate Nusantara development so that ASN can relocate next year,” he explained.
With the PPP scheme, Bambang affirmed that risks, incentives, and penalties in provisioning the public infrastructure would be divided between the government and the investors. “With the PPP scheme, the state will not incur losses,” he explained.
Bambang added that many ASN housing were required to accommodate 16,990 ASN in 2024, and the number will continue to grow each yea, so investment opportunities in ASN housing are still wide open.
Large project
PT Pertintis Triniti Properti Tbk President Director and CEO Ishak Chandra said that the participation of the Triniti Land consortium in the IKN project was in line with Triniti Land’s vision that is currently developing housing and tourism areas that are based on the sustainability principle to support the environmental, social, and governance (ESG) principle.
“Hopefully, with support from all parties and stakeholders, we can provide a positive contribution to the government by participating in the development of the new capital city,” he explained.
Furthermore, IKN is a large project that supports net zero emission, so only 25% of the area in Nusantara will be developed while the remaining 75% will be green areas in the form of a protected forest (65%) and a food production green area (10%).
PT Nindya Karya President Director Haedar A. Karim said that Nindya was committed to accompanying the government in national development.
“Nusantara development is crucial for Indonesia’s future. Nusantara will be a catalyst for Indonesia’s development, especially in the eastern area. Nindya is proud to participate in Nusantara development,” he added.
He added that Nindya also received funding support from Danareksa as its holding parent.
Besides that, as a company that focuses on construction, EPC, and investment, they are currently carrying out an investment diversification that provides added value based on excellence engineering and excellent innovations as well as human capital with morals.
“Nindya is investing Rp1.42 trillion. Nindya, as a holding member of Danareksa, is fully financially supported by the holding parent, Danareksa,” he stated.
The construction of ASN housing that maintains most of the green area is in line with Nindya’s spirit to implement the sustainable lean and green construction concept.
Both investors will build ASN housing in different areas. The Triniti consortium will commence construction in West Residence WP1A-1 and Nindya in West Government WP1A-1.
In another development, 7,000 construction workers have started to occupy the housing provided by the government in the form of the construction worker housing in IKN in East Kalimantan.
IKN Infrastructure Development Implementation Task Force Chairman Danis H. Sumadilaga said that, based on his notes, 30% of the 7,000 construction workers were workers who came from East Kalimantan.
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