President orders establishment of integrated system for IKN investors
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 - Presiden perintahkan pembentukan sistem terpadu untuk investor IKN
16 May 2023
By: Amrozi Amenan
Jakarta - President Joko Widodo (Jokowi) is ordering Nusantara Capital City Authority (OIKN) to establish a one stop shop to facilitate and make it easier for investors to explore cooperation in Nusantara Capital City (IKN). OIKN Head Bambang Susantono said that the establishment of the one stop shop would accelerate all permit processes in IKN so that they are appropriate in the field and in line with applicable laws and regulations.
“So, it has been decided that, for issues related to investment, we will make a one stop shop with other related institutions and ministries. It will also be included in the one stop shop,” Bambang said during a press conference after the meeting on investment acceleration in IKN with the President in Jakarta on Monday (15/05/2023).
Bambang explained that investors who are interested in investing in IKN could visit the integrated system that is connected to the related ministries and institutions. The ministries and institutions are Coordinating Ministry for Maritime Affairs and Investment, BKPM, the Finance Ministry, and the Public Works and Housing (PUPR) Ministry. Investors who are hindered by permits and tax incentives can visit the system so that the permits and the tax incentives can be implemented in line with applicable policies.
“There is a problem. There are several incentives regarding tax that must be elaborated and implemented. They are certainly awaited by business players,” Bambang said.
According to Bambang, there are currently 209 letters of interest (LoIs) proposed by investors to OIKN. Out of the 209 LoIs, 36 have been signed in a form of non-disclosure agreements as the discussion is already more detailed with data exchanged.
“After that, we will look at the field. Then, they will conduct a feasibility study and prepare a business plan,” Bambang said.
During the occasion, Bambang also said that President Jokowi also appointed Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan as the Chairperson of IKN Investment Acceleration Task Force. According to him, Luhut will coordinate with related institutions so that investment acceleration in IKN can progress efficiently.
Besides appointing Luhut as the chairperson of the task force that will coordinate the institutions, President Jokowi also ordered OIKN to establish a special task force to handle issues in the land sector to facilitate investors in investing in IKN. The task force will ensure that lands offered to investors are clean and clear.
“So, [lands] that will be offered to investors are lands in the form of lots and lands that we know the value of,” Bambang said.
In the next few months, Bambang continued that his agency would announce several projects in IKN that have been thoroughly prepared by business players that are not financed by the state budget (APBN).
“For example, there will be an international hospital. There will also be educational facilities and other [facilities] that cannot be separated from us to create one whole ecosystem,” Bambang said.
IKN construction in the first phase in 2024 is focused on realising one whole ecosystem that consists of several facilities, such as infrastructure facilities, public facilities, office buildings, and shopping centres in the Central Government Core Area (KIPP).
On the other hand, the Public Works and Housing (PUPR) Ministry through IKN Infrastructure Development Implementation Task Force is optimistic about the construction in the Presidential Palace area in IKN progressing as planned to be used for the Independence Day ceremony on 17 August 2024.
“Inshallah (God willing), we will accelerate the progress to be in accordance with the plan, so, it can hopefully be used in August 2024,” IKN Infrastructure Development Implementation Task Force Chairperson Danis Hidayat Sumadilaga said on Monday (15/5/2023).
Danis added that, in front of the Presidential Palace, there was a field that is planned to be used for the Independence Day ceremony on 17 August 2024. The construction of the Presidential Palace and the Presidential Office in IKN is progressing excellently.
“Until now, the construction of the Presidential Palace and the Presidential Office has progressed by more than 12%,” Danis stated.
Immersed tunnel
On the other hand, the PUPR Ministry through IKN Infrastructure Development Implementation Task Force is targeting the study on the construction of the immersed tunnel in IKN to be completed this year.
“We hope that the study on the immersed tunnel can be completed this year,” Danis said yesterday.
Danis added that the construction of the immersed tunnel was prepared to be part of section 4 of IKN KIPP toll road.
“We are completing the feasibility and the basic design,” he said.
According to Danis, the Highways Directorate General is currently completing those aspects so that the immersed tunnel can commence construction.
Previously, IKN Infrastructure Development Planning and Implementation Task Force would prepare the tunnel by adopting the immersed tunnel technology to cross Balikpapan Bay in IKN.
The construction of the immersed tunnel is in line with the forest city concept that is proposed for IKN. The PUPR Ministry is currently conducting a feasibility study to determine the best alternative route for the immersed tunnel.
The government also wants to protect proboscis monkeys as well as other endemic fauna and flora around Balikpapan Bay. Hence, the PUPR Ministry will not build a bridge that physically alters the environmental morphology, but they will construct an immersed tunnel, similar to the one in Geoje, Busan, South Korea.
Examples for the implementation of the immersed tunnel technology have been implemented in many countries, such as Fehmarn tunnel in Europe and the one in Geoje in Busan in South Korea. The immersed tunnel technology is a method that is mainly used to replace bridges to cross wide waters.
