Wednesday, May 31, 2023

Nusantara Already Secures 167 Letters of Intent: City Authority

Jayanty Nada Shofa
March 21, 2023 | 9:59 am
President Joko "Jokowi" Widodo visits the construction site of the presidential palace in the new state capital Nusantara in East Kalimantan on Feb. 23, 2023. (Photo Courtesy of Presidential Press Bureau)
President Joko "Jokowi" Widodo visits the construction site of the presidential palace in the new state capital Nusantara in East Kalimantan on Feb. 23, 2023. (Photo Courtesy of Presidential Press Bureau)

Jakarta. The Nusantara new capital project in East Kalimantan has already secured 167 of letters of intent as of March 15, thus illustrating its popularity among investors both home and abroad, according to the chairman of the city's authority body Bambang Susantono.

"Of course, some of those 167 [investors] who have [submitted] their letters of intent are just asking. Some are serious, others wish to know more details," Bambang told a conference hosted by the US-Indonesia Society and the Stimson Center Southeast Asia Forum on Monday evening.

"They also have to conduct a feasibility study first, because you cannot put your money into it without having a good feasibility study and business plan," Bambang said.

Data show that investors interested in building Indonesia's dream capital are representing 16 countries. Half of them are foreign investors. They are also mostly coming from Singapore, Malaysia, Japan, the US, and China.


About 21 of those letters of intent are within the energy sector, whereas 8 others are related to waste management. Four firms have also sent their letters of intent on building Nusantara's connectivity.

According to the capital authority, three investors —one of them being the CCFG-Risjadson Brunsfield Corp Consortium— are ready to develop the civil servants' housing under a public-private partnership (PPP) scheme. The said consortium will shower the housing project with an investment of a whopping Rp 30.8 trillion (about $2.1 billion). Korea Land and Housing Corp will invest Rp 8.65 trillion. Last but not least is property developer Summarecon Agung with a Rp 1.67 trillion investment for the civil servants' housing project. 

All three investors have received their letters to proceed from the Public Works Ministry. The housing project, which will see 184 towers, is slated for completion by 2024.

"To all of you who would like to invest in Nusantara, you have to 'get your feet wet to catch the fish'. Otherwise, the others are already coming," Bambang said.

The city also now has an authority-owned enterprise Bina Karya in hopes to attract more investors. Bina Karya was formerly a state-owned enterprise, but the consultant firm is now representing the authority in its commercial ventures. Whereas the capital authority focuses on being Nusantara's regulatory and policymaking institution.

"Investors have been telling us they would be more comfortable dealing as a business-to-business [B2B] rather than with the government because there is a lot of bureaucracy. That is why we set up Bina Karya as an authority-owned enterprise," Bambang said.

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