Govt ready to provide compensations and relocate lands in IKN

  • 08 May 2024

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 - Pemerintah siap ganti rugi dan relokasi lahan di IKN

8 May 2024

By Heru Febrianto

Jakarta, ID – The government is ready to relocate and offer compensation to citizens impacted by the 2,086 hectares of land acquisition for Nusantara Capital City (IKN) in East Kalimantan.

Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan emphasised that the relocation and compensation efforts were aimed to ensure that citizens were not disadvantaged by the development of IKN.

During his visit to IKN, he held a discussion with Public Works and Housing (PUPR) Minister Basuki Hadimuljono to follow up the land acquisition in IKN.

“I hope everything is completed by 27 May,” Luhut said as quoted by Antara in Jakarta on Tuesday (7/5/2024).

Furthermore, PUPR Minister Basuki explained that the relocation and compensation efforts would be provided through the Handling of Community Social Impact (PSDK) Plus scheme.

According to him, the PSDK scheme usually only offers compensation. However, this time, the government has decided to provide an additional benefit to citizens residing in areas under the control of the IKN Authority in the form of relocation.

“Usually, it is only compensation. However, this time is compensation plus. The ‘plus’ is relocation. They will be provided houses,” Basuki said.

He said that his agency was currently racing against time. Therefore, disseminations by the IKN Authority and the local police are required so that the people can understand the government’s commitment. This will enable his agency to proceed with the construction of necessary infrastructure for relocation within IKN.

“There are [houses] from the IKN Authority. These are assets under its control. The locations are being prepared by the IKN Authority,” Minister Basuki, familiarly called Pak Bas, stated.

Previously, Agrarian and Spatial Planning Minister/National Land Agency Head Agus Harimurti Yudhoyono (AHY) said that his agency was ready to finalise the acquisition of the 2,086 hectares of land in IKN.

According to AHY, the matter concerning IKN falls outside the authority of his ministry. However, his agency is prepared to address the issue by issuing land certificates for the area.

Stage 1 progress reaching 81%

However, there is still an ongoing issue regarding the acquisition of land from citizens that has yet to be finalised. The government is continuously expediting the construction of IKN as a new economic growth centre.

National Development Planning (PPN) Minister/National Development Planning Agency (Bappenas) Head Suharso Monoarfa revealed that the construction progress of IKN as of April 2024 has reached 80.82%.

“We have reported the development progress of IKN as Bappenas is the one that prepared the masterplan. So, we told President Jokowi that the construction has almost reached 81%,” Suharso said after the 2024 Regional Development Planning Forum (Musrenbang) in Jakarta on Monday (6/5/2024).

In his report, Suharso mentioned that stage 1 of IKN included the Central Government Core Area (KIPP) in North Penajam Paser, East Kalimantan. This area is set to be used for the Independence Day ceremony on 17 August 2024.

Regarding the KIPP progress, the State Palace and the Ceremony Field has reached 60.54%, the Presidential Palace 80.95%, the Coordinating Ministry Building 49.36%, landed houses for ministers 85.78%, and houses for civil servants and defence and security staff 38.88%.

Water resources infrastructure, the road network, and the toll road are being constructed with funding from the state budget (APBN). Additionally, state-owned enterprises (SOEs) are supporting the electricity grid and the telecommunication network. Meanwhile, national private companies are providing assistance with basic and supporting facilities and infrastructure, such as hospitals and schools.

During the occasion, Suharso affirmed that lands could be owned with a freehold title in IKN.

“Last Friday, President Jokowi asked if lands could be owned with a freehold title. I said yes,” he stated.

Law No.21/2023 on Amendment to Law No.3/2022 regarding State Capital City states an article that allows lands to be owned with a freehold title in IKN. The article is Article 15A Paragraphs 1, 5, 6, 8, 9, and so on.

Set to be completed in June

PUPR Minister Basuki Hadimuljono explained that the physical construction progress of the State Palace and the Presidential Office in IKN has entered the interior architecture construction stage.

“The palace is 67% completed. It will be completed in June. It is currently at the interior architectural construction stage that focuses on carvings and other aspects. Meanwhile, the Presidential Office is 80% completed. Inshallah (God willing), everything will be completed in June,” Basuki said when he visited the construction of the Presidential Palace area in IKN.

He mentioned that much of the interior at the State Palace and the Presidential Palace was sourced domestically. For instance, the lamps and carvings are from West Nusa Tenggara (NTB) and other regions.

According to him, only some are imported, which are installed to add to the authority of the palace.

“Except for the labradorite flooring from Africa, which is installed to show the authority of the palace,” he stated.

The State Palace and the Presidential Office are fitted with a smart air conditioning system, an automatic lighting system, a clean water system, a waste disposal system, surveillance cameras, a fire detection system, and a smart waste disposal system.

In the Presidential Palace, there is a main lobby, cabinet meeting rooms, audience rooms, and press conference rooms.

During the occasion, Pak Bas also mentioned that the construction progress of the official housing for the 36 ministers in IKN has reached 87%. They are set to be completed in July 2024.

Minister Basuki mentioned that the two-floor houses with four bedrooms were architecturally and physically constructed using domestic products. He noted that this enhanced the local content rate (TKDN) programme to be more optimal.

“Only the smart home system is not local,” he stated.

Furthermore, he said that energy supply to the minister houses would be sourced from a 6,600-watt solar power plant that could meet the electricity demand of the official houses.

Besides that, he ensures that water supply will come from KIPP’s reservoir that is sufficient to fulfil the needs of the official houses. Moreover, the water distributed can be drank straight away.

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