PPP scheme: IKN authority targets Rp61 trillion investment

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 - Skema KPBU: Otorita IKN bidik target investasi Rp61 triliun

17 February

By Alifian Asmaaysi

The Nusantara Capital City Authority (OIKN) aims to attract investments exceeding Rp60.93 trillion in Nusantara Capital City (IKN), East Kalimantan, through the Public-Private Partnership (PPP) scheme.

Agung Wicaksono, the Deputy for Funding and Investment at OIKN, stated that the investment target is a continuation of the 2024 goal of Rp100 trillion.

"So, for 2025, the key is the PPP scheme," he explained at the Parliamentary Complex last week.

Agung explained that the investment wave, utilising the PPP scheme and amounting to Rp60.93 trillion, will bolster the housing sector, encompassing both vertical and landed housing.

He also mentioned that his team is considering investments of Rp40 trillion for the construction of a multi-utility tunnel (MUT) and roads in the Central Government Core Area (KIPP).

"The PPP scheme is set to provide Rp60 trillion for housing and Rp40 trillion for the MUT and roads," he added.

He mentioned that soon, five companies will be investing in IKN during the 9th series of groundbreaking, with a total investment value of Rp6.49 trillion.

The companies are involved in the education, hotel, housing, retail, and office sectors. However, Agung noted that the groundbreaking process under President Prabowo Subianto differs from that during the tenure of the 7th Indonesian President, Joko Widodo.

He explained that there will be no ceremony during the groundbreaking. Instead, potential investors will be asked to sign a commitment and place the first stone to immediately commence construction.

"The scheme is no longer a traditional groundbreaking, but a cooperation agreement that will be directly followed by construction," he stated.

Danis H. Sumadilaga, the Acting Deputy for Facilities and Infrastructure at OIKN, also mentioned that the construction of Nusantara International Airport is progressing on schedule.

He aims for the construction of the IKN airport to be completed next month, as it is currently in the finishing stage.

"The contract is until the end of April. However, based on my monitoring yesterday, it can be completed by the end of March," Danis stated.

Currently, PT Hutama Karya (HK) is one of the contractors working on the IKN airport project.

Adjib Al Hakim, the Corporate Secretary Executive Vice President (EVP) of PT Hutama Karya, stated that his company is committed to completing the IKN VVIP airport project. Currently, the terminals are being managed by the Transportation Ministry through the Air Transportation Directorate General as the employer.

The main work progress on the land side has reached 100%, covering the VVIP and VIP terminals, the air traffic control (ATC) tower, administrative offices, and worship buildings. Additionally, there are several supplementary tasks, including the drainage system, which are scheduled for completion in March 2025.

“We are committed to completing the project with the best standards to support connectivity and government activities in IKN in the future,” Adjib stated.

He mentioned that the project faces several challenges, such as high rainfall. Consequently, the construction process was delayed due to puddles forming at several project locations, as the drainage channels have not yet been connected to the airside facilities.

"When the IKN VVIP airport becomes operational, it is expected to serve as a key catalyst for economic growth and to enhance the company's portfolio in the air transportation infrastructure sector," Adjib stated.

Embassy land

On a separate occasion, President Prabowo Subianto stated that he is prepared to offer free land in IKN to neighbouring countries for the establishment of embassies.

Basuki Hadimuljono, the Head of OIKN, mentioned that he proposed the offer to President Prabowo to attract foreign investments.

"I want to emphasise that it is not up to me. I suggested the offer to the President as a step to attract them faster," he explained in his written statement.

Basuki added that, with the goal of making IKN a political capital city by 2028, foreign embassies should have already commenced construction in IKN.

To support this target, the OIKN has allocated 62.9 hectares of land for diplomatic compounds.

"The presence of neighbouring countries' embassies in IKN aligns with the plan to relocate Indonesia's political capital city, which is set to be realised in 2028," he added.

The government is aiming to attract substantial investments exceeding Rp60.93 trillion into IKN through the PPP scheme.

Recent reports indicate that the investment wave from both foreign and local investors in IKN is still being finalised.

Basuki mentioned that the plan to secure investments through the PPP scheme involves PT Intiland Development Tbk (DILD), which aims to construct 109 landed houses and 41 apartment towers with an investment value of Rp33 trillion.

Meanwhile, PT Nindya Karya is constructing eight apartment towers valued at Rp2.6 trillion. PT Perintis Triniti Properti Tbk (TRIN), following an investment commitment from Truba Group, will construct eight apartment towers with an investment value of Rp2.5 trillion.

"Additionally, IJM-CHEC from Malaysia will be constructing 20 apartment towers, with an investment of Rp13.40 trillion," Basuki explained.

Furthermore, Maxim Global Berhad from Malaysia has committed to constructing ten apartment towers, with an investment value of Rp4.4 trillion.

Lastly, PT Ciputra Nusantara aims to construct ten apartment towers and 20 landed houses, with an investment value expected to exceed Rp5 trillion.

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