OIKN's strategy to attract private sector to build housing in IKN
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.
Investor Daily - Jurus OIKN gaet swasta bangun hunian di IKN
25 February 2025
By Heru Febrianto
Amid budget efficiency measures, the government is continuously boosting infrastructure development in Nusantara Capital City (IKN) in East Kalimantan. One of the strategies involves engaging the private sector through the Public-Private Partnership (PPP) scheme.
Nusantara Capital City Authority (OIKN) Head Basuki Hadimuljono stated that his team is inviting the private sector to construct housing in Nusantara, East Kalimantan, through PPP projects that implement the availability payment scheme.
The OIKN has prepared PPP projects for 97 apartment towers and 129 landed houses, which will be offered to investors with a total estimated investment value of Rp60.9 trillion. In addition to housing, the OIKN is also offering projects for roads and the Multi-Utility Tunnel (MUT) worth Rp70 trillion.
Basuki said at the market sounding event for PPP projects in IKN held in Jakarta on Monday (24/2/2025), “I think I have mentioned that there are several PPP projects in the housing sector and other basic infrastructure sectors. The PPP projects in the housing sector are valued at Rp60.9 trillion, while the road projects and the MUT project are valued at Rp70 trillion.”
During the occasion, OIKN Funding and Investment Deputy Agung Wicaksono explained that, in the first stage, OIKN will offer two apartment projects and one landed house project with a total investment of Rp8 trillion.
Agung stated, “We are targeting them to enter transactions soon. At the latest, we aim for them to enter transactions for procurement in the second quarter of this year.”
In the second stage, two apartment projects and one landed house project, with a total investment of Rp23 trillion, are scheduled to enter transactions in the middle of the year.
"These projects are unsolicited PPP projects. However, to ensure proper governance, the transactions and procurement will be conducted transparently through a tender process," he explained.
The business entities initiating the PPP projects for 97 apartment towers and 129 landed houses include PT Nindya Karya (Persero), which will develop eight civil servant apartment towers; PT Perintis Triniti Properti Tbk and Truba Group, which will develop eight ASN apartment projects; and PT Intiland Development Tbk, which will develop 41 civil servant apartment towers and 109 landed houses.
IJM Corporation Berhad will initiate 20 civil servant apartment towers, Maxim Global Berhad will initiate 10 civil servant apartment towers, and PT Ciputra Development Tbk will initiate 10 civil servant apartment towers and 20 landed houses.
Currently, the PPP housing projects that have completed feasibility studies are those initiated by Nindya Karya, Intiland, and IJM.
Construction commencing in 2025
During the occasion, five national parties signed cooperation agreements with the OIKN to utilise land in IKN. The cooperation is valued at Rp1.2 trillion and includes mixed-use, hotel, office, and university projects.
OIKN Funding and Investment Deputy Agung Wicaksono said that the five parties are PT Brantas Abipraya, PT Puri Persada Lampung, Universitas Negeri Surabaya (Unesa), PT Berkah Bersinar Abadi, and Balikpapan Ready Mix Nusantara.
"The estimated investment value committed in the first stage reaches Rp1.25 trillion for mixed-use, hotel, office, and university projects," Agung stated.
Subsequently, the cooperation agreements will be followed up with construction in 2025. For previous cooperation agreements, construction can commence up to 18 months after the signing process.
"Previous cooperation agreements were executed within 18 months of signing, as significant construction was required at the time. However, this time, we have agreed to commence construction in 2025," he revealed.
Agung mentioned that the cooperation ensures the continuation of infrastructure development in IKN. Additionally, the development of Central Government Core Area (KIPP) 1B and 1C will also commence.
"Infrastructure development will commence this year, so we hope that the infrastructure built by the government and the facilities constructed by investors can progress in tandem," he added.
With the signing of investments from the private sector, the urban ecosystem in IKN is expected to develop further.
According to him, the agreements provide a foundation for offering legal certainty to business players, regulating the rights and obligations of the OIKN and investors.
"It also outlines the commitment to commence construction. In previous cooperation agreements, we planned to execute them within 18 months of signing, as there was significant construction to be carried out at the time. However, for the current cooperation agreements, we have agreed to commence construction in 2025," Agung stated.
Basic infrastructure required
Meanwhile, infrastructure and urban observer from Universitas Trisakti, Yayat Supriatna, said that he has always been optimistic about the continuation of IKN development despite budget reductions. He explained that this is because IKN development is a long-term project that cannot be completed within ten years.
"Yes, it must continue regardless of the circumstances. IKN is essential because Jakarta can no longer manage the congestion. This is not related to politics. However, as an academician, I believe it must continue," he told Investor Daily.
He mentioned that infrastructure development has its own challenges. Initially, IKN development was always supported by the state budget (APBN), but now it must leverage creative funding.
"However, there is still a portion of the APBN. Due to budget refocusing, creative funding is needed to utilise budgets outside the APBN by attracting the private sector and state-owned enterprises (SOEs)," he revealed.
He added that, as long as basic infrastructure in IKN is available, future challenges will primarily involve attracting construction funds outside the APBN. “Funding outside the APBN must be sought after. However, as long as there is certainty and basic infrastructure, I think it is doable,” he added.
