New capital city: Rushing IKN project
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: Kejar tayang proyek IKN
22 August 2023
By: Alifian Asmaaysi & Hendra Wibawa
The government is continuously working on the construction of the Central Government Core Area (KIPP) in Nusantara Capital City (IKN) in East Kalimantan to pursue the target to operate at the end of 2024.
The Public Works and Housing (PUPR) Ministry is tirelessly working on the IKN project in East Kalimantan.
The ministry that is responsible for the basic infrastructure in IKN is continuously working even though the House of Representatives (DPR) and the government have agreed to establish the IKN task force to revise Law No. 3/2022 on Capital City.
Moreover, the PUPR Ministry has commenced the second stage of the IKN project. IKN Infrastructure Development Implementation Task Force Chairperson Danis Hidayat Sumadilaga said that the construction of the state civil apparatus (ASNs) flats in IKN that is a part of the second stage would commence this month.
He is targeting the ASN flat project to be signed this week after it was delayed from 16 August 2023.
“The contract for the ASN flats was planned to be signed on 16 August 2023, but it was delayed, so it is still being prepared. If the tender has been completed,” Danis said at the PUPR Ministry office on Monday (21/8).
If the contract has been signed, he continued that the PUPR Ministry would prepare the detail engineering design (DED) to be ready at least 1 month before construction.
In total, there are 47 towers with a contract value of Rp9.4 trillion that will be funded by the state budget (APBN).
The construction of the ASN flats that are located in the KIPP in IKN is set to be completed at the end of 2024.
Out of the 47 towers that will be constructed, the PUPR Ministry will accelerate the construction of 12 towers that need to be completed at the end of July 2024. The 12 towers are expected to accommodate up to 4,000 ASNs in IKN.
The construction of the 47 ASN flats is part of the second stage of IKN development, which also includes several other jumbo projects, such as IKN access toll road sections 6A and 6B and VVIP airport access toll road section 5B.
The PUPR Ministry has also commenced the tender for the construction of Balang Island Bridge-Sp. Riko toll segment in IKN that is worth Rp3.6 trillion.
On the electronic procurement service (LPSE) page of the PUPR Ministry’s website, Balang Island Bridge-Sp. Riko toll segment of IKN toll road is stated to span 13.27 kilometres (km).
In detail, the construction of Balang Island Bridge-Sp. Riko toll segment of IKN toll road consists of roads spanning 11.7 km, two bridges spanning 475 metres, and elevated pile slabs spanning 1.1 km.
Besides that, the construction of Balang Island Bridge-Sp. Riko toll segment of IKN toll road will also include five overpasses or flyovers.
The contract’s ceiling value and self-estimated price reach Rp3.6 trillion with a construction period of 420 calendar days or 14 months. The type of the contract is a multiyear contract.
As many as 30 participants have participated in the tender for the IKN toll segment. Later, the winner of the tender will be announced on 2 October 2023, and the contract is set to be signed on 10 October 2023.
Not only Balang Island Bridge-Sp. Riko toll segment of IKN toll road, Danis stated that he was also accelerating the construction of the toll road that is fitted with an immersed tunnel.
The construction of the first immersed tunnel in Indonesia is currently in the design tender process.
According to him, the immersed tunnel is a part of Balikpapa-Samarinda (Balsam) toll road section 4.
On top of the immersed tunnel, Balsam toll road will also have two tunnels that are meant to be used by animals to cross.
Local workers
Regarding workforce absorption, Danis revealed that IKN development has absorbed 9,713 local workers that consist of 2,649 people from Kalimantan and 7,064 people from outside of Kalimantan.
Besides the 9,713 workers, he stated that there were thousands of workers in precast factories in Java and thousands of workers that are preparing construction materials in West Sulawesi and Central Sulawesi.
Danis denied that there were Chinese workers in IKN development, even though Government Regulation (PP) No. 12/2023 on Granting of Business Licensing, Ease of Doing Business, and Investment Facility to Business Players in Nusantara Capital City allows foreign workers to work on the IKN project.
Danis said that construction progress of the first stage of IKN development was predicted to surpass 70% at the end of this year. It is in line with the average growth of the construction progress in IKN that reaches 2% every week.
“From August to December, we still have 4 months or 16 weeks left. So, if the progress is 2% each week, the progress is expected to reach around 70% at the end of this year,” Danis said.
At the ASEAN Economic Ministers (AEM) – 26th ASEAN Investment Area (AIA) Council Meeting in Semarang, Investment Minister/Investment Coordinating Board (BKPM) Head Bahlil Lahadalia said that several conglomerates were serious about investing trillions of rupiah to be involved in IKN development.
Several Indonesian conglomerates that are said to be ready to commence projects in IKN include Agung Sedayu Group founder Sugianto Kusuma and RGE founder and chairperson Sukanto Tanoto.
Bahlil said that a domestic consortium led by Sugianto Kusuma would commence groundbreaking for a project in IKN in September 2023.
Bahlil said that there were several projects that will be worked on by Sugianto Kusuma and his group, including property and telecommunications projects.
On the other hand, IKN Authority Head Bambang Susantono revealed that the investment plans of Sugianto Kusuma and Sukanto Tanoko were being thoroughly studied.
Until now, the IKN Authority is still discussing the projects and the investment plans of both investors.
“[The form of investment] is still being discussed. So, there are many consortiums that are interested. Everything is still on process,” he said when he was met at the DPR/MPR complex in Jakarta on Monday (21/8).
Bambang revealed that the IKN Authority and several investors were still allocating the lands.
Bambang also reported that the IKN Authority was still waiting for written certainties regarding the interest to invest from several investors. Until August 2023, there are 40 letters of interest (LOIs) submitted by domestic consortiums that have been processed.
