New Capital operator: Polemic around Bina Karya in Nusantara
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 - Pengelola Ibu Kota Negara: Polemik Bina Karya di Nusantara
13 September 2023
By: Tegar Arief
Jakarta - After many uncertainties, the government finally appointed a special state-owned company that will be responsible to Nusantara Capital City Authority. However, there are some oddities in the appointment of the special company.
At the work meeting with House of Representatives (DPR) Commission XI on Tuesday (12/9), Transportation Minister Sri Mulyani Indrawati ensured that PT Bina Karya (Persero) would change its status from a state-owned enterprise (SOE) to an authority-owned enterprise (BUMO).
Hence, the government is proposing an additional state equity participation (PMN) for Bina Karya in the 2023 state budget (APBN) worth Rp500 billion.
“It is an SOE that will be converted to be owned by Nusantara Capital City Authority. It is also the first capital expenditure (capex) PMN that will be managed by Nusantara Capital City Authority,” Sri Mulyani explained yesterday.
Bina Karya is a consulting and planning firm that will be appointed to develop telecommunications and basic infrastructure in Nusantara Capital City (IKN).
The capital injection will be disbursed so that Bina Karya can have freedom in looking for strategic partners, which can be private companies, SOEs, domestic investors, and foreign investors, to develop the new government centre.
“Bina Karya’s mission will change so that it can carry out various activities, including cooperating with private companies,” Sri Mulyani said.
Even though the intention is positive, legislators in Senayan are criticising the appointment of Bina Karya as the state-owned company that will be directly responsible to IKN Authority.
The company does not have a track record nor competence in telecommunications and basic infrastructure.
DPR Commission XI Member Bertu Merlas is suggesting the government to pay closer attention to the competence of the SOE that will be handed over to IKN Authority.
“What is the use of Bina Karya if it is given a task that is unsuitable [for them]? It is not focused.”
IKN Authority’s plan to establish a BUMO is full of polemics, starting from its budget and its legality aspect that is not fully supported.
Based on the information obtained by Bisnis, Nusantara Authority initially asked for a special SOE from the government to support the development of the new capital city.
The special SOE has been regulated in Law Number 11/2020 that has been revised to Law Number 6/2023 on Job Creation.
The special assignment for the SOE will consider the purpose, objective, business activity, and capability of the SOE.
If the assignment is not financially feasible, the central government must compensate all costs that have been spent by the SOE, including the margin that is expected to be in line with the assignment given.
However, the special SOE that will be legalised by the Job Creation Law will only focus on public services, research, and innovations. The establishment will also be carried out by the central government.
The BUMO can act as the main developer and/or establish subsidiaries in accordance with their business and service needs.
The corporate action can be carried out to support the preparation, development, and relocation of IKN. It will also support the establishment of IKN Special Regional Government as well as the development of IKN and its partner regions.
In other words, the BUMO will play a crucial role to attract the interest of investors to support the development process of the area on Kalimantan Island.
Meanwhile, Bina Karya has negotiated with several companies to support the development of Nusantara.
In July, Bina Karya signed an agreement with PT Pos Indonesia (Persero) regarding the provision of a courier service and a logistics hub in Nusantara.
Then, the company is also facilitating the construction of the integrated shopping centre by PT Pakuwon Jati Tbk. This month, Bina Karya is also bridging the logistics pier construction by PT Krakatau Bandar Samudera.
Bina Karya President Director Boyke P. Soebroto said that the construction of the logistics pier was a follow up to the cooperation of the company with Pos Indonesia. “It is the first time we are cooperating in the service sector for the development of IKN. So, we have to look for the right partner,” he stated.
