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New capital project: 53 developers compete over Palaran

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 - Proyek ibu kota negara: 53 pengembang berebut Palaran

30 October 2021

By: Muhammad Mutawallie Sya’rawie


Bisnis, Samarinda – At least 53 property developers have proposed to develop Palaran, Samarinda, East Kalimantan, which is the nearest city to the new capital city.

Samarinda Mayor, Andi Harun, stated that Samarinda was ready to welcome the New Capital City project.

He revealed that Samarinda was currently revising its spatial plan.

“There are 53 developers that have proposed [to develop] Palaran,” he stated on Friday (29/10).

According to him, Samarinda wants to grow together with the new capital city. Moreover, he affirmed that Samarinda would also develop Palaran, which was the nearest sub-district to the new capital city compared to other areas.

Andi is asking national and local developers to build Palaran as Samarinda’s closest area to the new capital city.

“Samarinda is not only supporting the new capital city, but also a new economic growth centre in central Indonesia,” he said.

He added that Samarinda was the centre for trade, industry, and food for neighbouring areas of Samarinda.

According to him, this is supported by the decision of the Transportation Ministry to develop an international airport in Samarinda. Until now, SAMS Sepinggan Airport in Balikpapan has reached its maximum capacity and is limited.

Andi also said that Samarinda Local Government has established a spatial forum. The purpose of the forum is to facilitate investors in handling the bureaucracy that can take months with several regional government administrative organisations.

“They only need to undergo a process in the spatial forum, after being advised by the forum chairperson, I will sign immediately,” Andi affirmed.

Previously, Real Estate Indonesia (REI) Central Executive Board (DPP) Spatial Affairs Deputy Chairperson, Harigani, mentioned that the new capital city significantly attracted local and national developers.

“We will always be ready to support the government in developing the new capital city using the public-private partnership (PPP) scheme. This collaboration is expected to go smoothly as it will be difficult to rely on the regional budget,” he said.

On the other hand, European Union Ambassador for Indonesia and Brunei Darussalam, Vincent Piket, stated that the European Union was supporting the East Kalimantan Provincial Government in increasing trade and investments.

He believes that the new capital city project can attract larger foreign investments in East Kalimantan in the future.

“Foreign investment in this province is relatively small, so there is a large space for growth,” he said during his visit to East Kalimantan to provide disclosure regarding the Indonesia-European Union Comprehensive Economic Partnership Agreement (IEU CEPA).

Piket mentioned that he was ready to cooperate with the East Kalimantan Provincial Government by conducting a business meeting to discuss trade and investment opportunities with stakeholders in the province.

“East Kalimantan is one of the largest provinces in Indonesia with many investment opportunities in sectors such as oil and gas, processing industry, construction as well as agriculture and fisheries,” he mentioned.

He explained that IEU CEPA would boost trade and investments as well as contribute to job creation and sustainable economic recovery.

“For more than 30 years, the European Union has partnered with Indonesia to improve cooperation in trade and investments.”

In 2019, the European Union launched a 5-year program called ARISE+ Indonesia Trade Support Facility. The program provides technical support for the Indonesian government and companies to increase their export capacity and to meet international trade regulations and standards.

Investment opportunities

Meanwhile, East Kalimantan Governor, Isran Noor, revealed that the relationship between Indonesia and the European Union was tight and mutually beneficial.

According to him, there are many investment opportunities for the European Union.

He affirmed that several potential projects that could be funded by foreign investors included Maloy Batuta Trans-Kalimantan Special Economic Zone (SEZ) in East Kutai Regency, Kariangau Industrial Estate, waste processing in Balikpapan, and Balikpapan- North Penajam Paser toll road bridge project.

Isran also revealed that East Kalimantan had various advantages, such as mining and drilling, oil and gas, the processing industry, construction, as well as agriculture and fisheries. “Meanwhile, Penajam Paser Regency will be the potential new capital city,” he mentioned.

The East Kalimantan Provincial Government is still waiting for new investors in the railway project in East Kalimantan.

East Kalimantan Provincial Government Assistant II for Economic Affairs and Construction Administration, Abu Helmi, stated that the East Kalimantan Provincial Government would still carry out the railway construction.

“The realisation depends on the country that wants to invest, and we are waiting and encouraging [for countries to invest]. However, railway investment also depends on regulations from the Transportation Ministry,” he stated.

He added that his agency was continuously committed to carry on the cooperation on the railway project in East Kalimantan.

He hopes that the meeting can encourage investors in Europe to invest in East Kalimantan.

“Besides investments, we also want to expand the opportunity to export to Europe. Hence, we hope that players can unlock business insights to improve the trade export potential,” he stated.

The meeting also included a panel discussion that discussed CEPA’s benefits in improving the economic relations among countries in the European Union and Indonesia.

During the occasion, delegates from the European Union will also observe the potential new capital city, which is North Penajam Paser Regency.

Previously, the European Union had also conducted CEPA business visits to provincial governments in Maluku, Central Java, West Java, and South Sumatra.


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