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: Jadwal padat Otorita IKN
22 January 2024
By Alifian Asmaaysi and Hendra Wibawa
Jakarta, ID – The investment realisation in Nusantara Capital City (IKN) in East Kalimantan this year is forecasted to surpass the realisation in 2023. This aligns with the ambitious target to complete the construction of the national strategic project.
At the start of this year, IKN Authority Head Bambang Susantono has been increasingly busy. Numerous business meetings focusing on investments in IKN in North Penajam Paser, East Kalimantan, have been scheduled. Additionally, several groundbreaking ceremonies for projects in IKN have been proposed to the IKN Authority Head since the outset of the year.
Among these initiatives is President Joko Widodo's scheduled commencement of the fifth phase of groundbreaking next month. The slated projects encompass a diverse range of infrastructure developments, including housing, apartments, 3-star hotels, and ecosystem development projects within IKN. Notably, the President executed the fourth phase of groundbreaking on 17 January 2024. This phase included the inauguration of projects such as the Pos Indonesia Office or Nusantara Logistics Hub, Jambuluwuk Hotel & Resort, the Green Pesantren, and the IKN Authority Office.
The monthly groundbreaking processions in IKN, overseen by the IKN Authority, are conducted to maintain the interest of investors in IKN.
IKN Authority Financing and Investment Deputy Agung Wicaksono is optimistic about investments in IKN continuing to accelerate this year.
He believes that private investments in IKN throughout 2024 will be more brilliant compared to the previous year. Last year, he revealed that the committed investment value surpassed Rp41.4 trillion.
According to him, the total investment value was realised in only 4 months from September 2023 to December 2023.
“So, we are optimistic about surpassing it,” he explained at a media briefing on Friday (19/1).
Between September and December 2023, the IKN Authority emphasized that the committed investments in IKN exceeded Rp41.4 trillion. This achievement unfolded across three distinct phases of groundbreaking during the specified timeframe. However, Agung pointed out that the realisation of private investments in 2023 fell short of the initial target of Rp45 trillion.
One contributing factor to missing the target was the rescheduling of groundbreaking ceremonies for various projects in IKN. During the final three months of 2023, the timing of these groundbreaking schedules coincided with the 2023 Christmas and 2024 New Year holidays.
“So, several companies were not ready. On the field, the number of event organisers available was also limited as it was near the end of the year,” Agung said.
The shortfall in investment realisation also has repercussions on the absorption of the State Budget (APBN) for IKN projects. President Jokowi's administration has utilised Rp26.7 trillion from the APBN for the development of IKN out of the total allocation of Rp29.4 trillion.
Nevertheless, the absorption of the APBN for IKN projects in 2023, amounting to Rp26.7 trillion, exceeded the absorption in 2022, which stood at Rp5.5 trillion.
APBN absorption in 2023 covered the infrastructure and non-infrastructure clusters.
For the non-infrastructure cluster, Rp2.9 trillion was allocated for relocation coordination and preparation, IKN relocation planning, and the operational expenses of the IKN Authority.
For the infrastructure cluster, the disbursed budget of Rp23.8 trillion was allocated for the construction of the State Palace and the Central Government Core Area, settlements, and the IKN toll road.
IKN toll road
Meanwhile, Public Works and Housing (PUPR) Minister Basuki Hadimuljono stated that the IKN toll road could be completed in July 2024.
During his visit to IKN, Basuki also asked the road network to KIPP to be worked on optimally.
He is also asking the quality of the IKN toll road to be better than other toll roads.
“If there are issues, they need to be identified and improved on immediately. The first phase has to be completed in July 2024 so that it can operate,” he said in his official statement on Saturday (20/1).
The construction of the IKN toll road has realised three sections, namely Section 3A (Karangjoang-KKT Kariangau) spanning 13.4 kilometres with progress at 48%, Section 3B (KKT Kariangau-Tempadung Interchange) spanning 7.3 km with progress at 57%, and Section 5A (Tempadung Section-Pulau Balang Bridge) spanning 6.7 km with progress at 67%. Basuki is targeting the three sections to be completed and functional in July 2024.
Meanwhile, land procurement and construction have commenced for Section 6A (Riko-IKN Outer Ring Road Plan) and Section 6B (IKN Outer Ring Road Plan-ITCI Interchange 3). The progress of Section 6A reaches 4.8% and Section 6B reaches 17.5%.
The IKN toll road will shorten travel time from Balikpapan to the KIPP in IKN. Previously, the route used Balikpapan-Samarinda (Balsam) toll road and Sepaku highway, taking 2 hours and 15 minutes to cover a distance of 95 km. With the new IKN toll road, the travel time is expected to be only 45 minutes, covering a distance of 57 km.
Highways Director General of PUPR Ministry Hedy Rahadian also mentioned that the IKN toll road could function in July 2024, and it could be used on the 79th Independence Day of Indonesia on 17 August 2024.
He also explained that the IKN access toll road could operate on a functional basis with only one direction open, considering the ongoing construction process.
“It could [operate] on a functional basis, but only some of it or one direction will be opened. So, there will only be 2 or 3 lanes [opened],” he added.
Moreover, Sepaku Semoi Water Treatment Plant (WTP) will operate earlier in June 2024.
PUPR Minister Basuki Hadimuljono is asking the construction of the project to be carried out quickly, in line with the government’s plan to hold the ceremony of the Indonesia’s 79th Independence Day on 17 August 2024.
“The WTP network will be the main drinking water source for all citizens in IKN. So, the construction must be full of caution and intense supervision,” Basuki said.
In the first phase of construction, Sepaku Semoi WTP will have a capacity of 300 litres per second sourced from Sepaku River Intake.
The WTP is also fitted with two reservoirs that have a capacity of 6,000 m3, along with supporting buildings and a pipeline network spanning 20 kilometres (km). Currently, the construction progress of Sepaku Semoi WTP has reached 28.8%.
The first phase of the construction of Sepaku Semoi WTP has been carried out by PT Adhi Karya (Persero) Tbk (ADHI)-PT Brantas Abipraya Operational Cooperation as the initiating contractor.
The project is also worked on by PT Virama Karya-Areng MP-PT Waseco Tirta Operational Cooperation as the construction management consultant. Meanwhile, the construction cost is reported to reach Rp328.18 billion.
