PUPR allocates Rp62tn for 63 IKN projects
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 - PUPR anggarkan Rp62 T untuk 63 proyek IKN
6 March 2023
Jakarta - The Public Works and Housing (PUPR) Ministry is allocating US$4.5 billion or Rp62 trillion for 63 construction projects in Nusantara Capital City (IKN) in the early stage from 2022 to 2024. The PUPR Ministry has also invited investors and business partners from Japan to invest in IKN.
“Until the second week of February 2023, several projects worth US$1.58 billion have been contracted,” Human Settlement Director General of the PUPR Ministry Diana Kusumastuti said in her official statement in Jakarta on Friday (3/3/2023).
Diana explained that the first stage of IKN development that is carried out from 2022 to 2024 is focused on the construction of Development Area (WP) I or the Central Government Core Area (KIPP) that reaches 6,671 hectares (ha). In that area, 49% or 3,271 ha will be kept as a forest area.
Moreover, the KIPP will be divided into three zones, namely Zone 1A (Central Government), Zone 1B (Government, Education, Housing), and Zone 1C (Government, Healthcare, Housing).
“All of the construction is carried out by utilising building information modelling (BIM) and geographic information system (GIS),” Diana explained.
Furthermore, the PUPR Ministry has invited investors and business partners from Japan to invest in IKN as it is already guaranteed by a strong legal basis, which is Law No. 3 Year 2022 on State Capital City. This statement was delivered at Japan-Indonesia Economic Committee Forum of Keidanren in Tokyo in Japan on Tuesday (28/2/2023).
Hence, the Indonesian government has also established IKN Authority to prepare, construct, relocate, and manage the capital city.
“IKN Authority will fully support investors who will join to develop IKN through the public-private partnership (PPP) scheme,” Diana said.
During the occasion, IKN Infrastructure Development Task Force Chairperson Danis Hidayat Sumadilaga said that IKN development includes the concept design, land use and zonation development, as well as infrastructure provision that incudes roads, clean water, sanitation, waste management, and government facilities. He also said that the development of IKN as an urban ecosystem is carried out to be an integrated city, especially in terms of its functions, visual, and environment to be Smart Forest City IKN.
“The PUPR Ministry had constructed various infrastructures in IKN as proof of the government’s seriousness in constructing IKN,” Danis said.
Meanwhile, Transportation Minister Budi Karya Sumadi who also attended as a speaker at Japan-Indonesia Economic Committee Forum of Keidanren in Tokyo in Japan has also invited business players in Japan to cooperate in constructing transportation infrastructures in IKN. According to him, IKN development has been regulated by laws in the form of government regulations, presidential regulations, and other forms of regulations.
IKN will be developed as a city that has a low carbon emission and is efficient through technology utilisation. IKN construction and development will be carried in five stages from 2022 to 2045.
“Infrastructure construction in IKN requires a large cost. So, non-APBN (state budget) creative funding is needed, such as the public-private partnership (PPP) scheme and the concession scheme that involves various domestic and foreign parties. This scheme is the main target to fund IKN construction and development,” the Transportation Minister said.
The Transportation Minister is also inviting business players in Japan to directly visit IKN to see various cooperation opportunities.
The Transportation Minister revealed that there are several transportation infrastructures that will be built and developed in IKN. In the land sector, the government will construct a mass transportation system that includes buss rapid transit (BRT), autonomous minibus, and autonomous BRT. Then, in the railway sector, the government will build Sepinggan Airport Train from Karang Joang Transit-oriented Development (TOD) Area to IKN that spans 47 km and has a travel time of 30 minutes.
In the air transportation sector, he continued that the government would build IKN VVIP Airport that will be used to receive state guests for government activities that is 40 km away from the presidential palace. Next, in the maritime sector, the government will build a tourism dock and a container port.
IKN TOD
Meanwhile, Housing Director General of the PUPR Ministry Iwan Suprijanto mentioned that IKN is a true TOD that facilitates the people’s mobility from their homes to their places of work.
“If somebody says that IKN is a true TOD, that they are correct. We have to build and realise it in a measured manner,” Iwan Suprijanto said at the TOD seminar in Jakarta on Thursday (2/3/2023).
Iwan added that one of the key performance indicators (KPIs) in IKN development is the people being able to walk 10 minutes from their homes to office and public areas.
“By conducting spatial planning in IKN with the TOD concept,” he said.
According to Iwan, IKN is a solution as relocating the capital city to East Kalimantan must be started with the creation of a new concept so that there are no problems in the future.
“So, IKN’s construction concept can accommodate the TOD concept,” Iwan said.
