British investor explores investment in IKN
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 - Investor Inggris jajaki investasi di IKN
8 October 2024
By Fito Akhmad Erlangga and Ichsan Amin
Jakarta, ID – This week, President Joko Widodo (Jokowi) is scheduled to conduct a groundbreaking ceremony for infrastructure development in Nusantara Capital City (IKN), East Kalimantan. One of the investors planning to attend the ceremony is from London, England.
Acting Head of the Nusantara Capital City Authority (OIKN), Basuki Hadimuljono, said that President Jokowi is scheduled to inaugurate PSSI’s training centre in IKN on 10 or 11 October 2024. In addition, Jokowi is set to conduct several groundbreaking ceremonies as part of the ninth series of groundbreaking events in IKN.
“The schedule is for the President to come on 10 or 11 October to inaugurate PSSI’s training centre. During the occasion, we will also conduct other groundbreaking ceremonies. We are currently finalising which projects will be included in the groundbreaking,” Basuki said in IKN, East Kalimantan on Wednesday (7/10/2024).
Basuki mentioned that the ninth series of groundbreaking ceremonies will be attended by both domestic and international investors. One of the international investors, from London, England, is planning to construct a botanical garden in IKN. The name of the company has not yet been disclosed.
“There are domestic and international investors involved, but the details are still being finalised. We do not yet know how many projects will be part of the groundbreaking,” he explained.
The presence of the investor from England adds to the growing list of international investors in IKN. In the eighth series of groundbreaking ceremonies, a property company from China, Delonix Group, officially became the first international investor to carry out foreign direct investment (FDI) in IKN.
Delonix Group, through PT Delonix Group Indonesia, is planning to construct a mixed-use commercial complex called Delonix Nusantara. With an investment value of Rp500 billion, PT Delonix Group Indonesia will develop the complex on a 24,200 m² plot of land. The project will include Model J Hotel, serviced apartments, shopping centres, offices, sports and fitness facilities, as well as green open spaces.
In addition to Delonix, there are two other international investors that have partnered with domestic companies. One of these is Australian Independent School (AIS), through PT AIS Property Asia, which plans to construct Campus AIS Nusantara. With an investment value of Rp150 billion, the educational centre will be built on a 7,900 m² plot of land and will be able to accommodate around 750 students from pre-school to high school levels.
Another international investor collaborating with a local company is Magnum Estate International, a private property company from Russia. Through PT Magnum Investment Nusantara, they plan to construct a mixed-use area called Magnum Resort Nusantara. This development is designed to integrate housing, business areas, and recreational spaces into a single sustainable area in Nusantara, with an investment value of Rp300 billion.
Basuki, who is also the Minister of Public Works and Housing (PUPR), added that during President Jokowi's administration, the amount of investment entering IKN has reached Rp58.4 trillion.
“The total investment, including the last series of groundbreaking, reaches Rp58.4 trillion. Hopefully, the ninth series of groundbreaking will further increase this amount,” he stated.
Certainty for investors
Meanwhile, Yayat Supriatna, an infrastructure observer from Universitas Trisakti, stated that the development of IKN would not be hindered despite the transition to the new government.
According to him, the interest of international investors in the services and property sectors requires certainty regarding the relocation of civil servants and the governance mechanism in IKN.
“This is crucial. Everywhere, investors require certainty. There must be clarity on when civil servants will be relocated. Therefore, the presidential decree must be issued first,” Yayat said to Investor Daily.
He stated that international investors who have invested in IKN must be assured of certainty from the government. One of the key aspects being awaited is a presidential decree on the relocation of civil servants.
“If there is a presidential decree, I believe investors can breathe easy. Despite the number of international investors, it will be difficult if there is no certainty,” he emphasized.
On the other hand, the government must also make the transition or relocation to IKN clearer through a government organisational mechanism. This means the government must determine which areas are included under the authority of OIKN in East Kalimantan.
“Therefore, district or even sub-district governments need to know whether their budget will come from the regional government or the OIKN. This clarity is necessary to organise the government effectively in IKN,” he added.
Yayat added that the administration of the elected president must signal support for IKN as a crucial part of equalising the economy.
“This means they must determine how often the President will be located in IKN. Is it once a week or twice every month? I think these kinds of signals are awaited by investors who have entered IKN,” he stated.
IKN airport progress
The construction progress of Nusantara Airport in IKN is rapidly advancing. Following the successful landing of the RJ85 presidential aircraft last month, Nusantara Airport will soon conduct test runs to accommodate the landing of larger aircraft.
Transportation Minister Budi Karya Sumadi stated that the runway at Nusantara Airport has now reached a length of 2,200 metres and a width of 45 metres. The Ministry of Public Works and Housing (PUPR) is currently layering the runway, which is set to be completed by 10 October 2024.
Next, the Ministry of Transportation will verify the runway's feasibility for aircraft landings. "Inshallah (God willing), the construction of the runway will be completed on the morning of 10 October, so the landing test run can be conducted in the evening," the Transportation Minister said while observing the construction progress of Nusantara Airport in IKN, East Kalimantan, on Sunday (6/10).
Previously, the RJ85 presidential aircraft successfully landed at Nusantara Airport, bringing President Jokowi for work visits to several areas in Kalimantan. Once the runway has been layered and widened, it will be ready to accommodate the Boeing Business Jet 737-800 presidential aircraft, which is larger than the RJ85.
“Before the presidential aircraft lands, we will conduct a proving flight with a similar aircraft, just as we did before the RJ85 landed at Nusantara Airport,” the Transportation Minister continued.
During the occasion, the Transportation Minister also observed the progress of the airport terminal construction along with three architects of Nusantara Airport: Yori Antar, Adi Purnomo (Mamo), and Reza Wahjudi (Bobos). The Transportation Minister assured that the terminal construction will align with the major concept of IKN, which is oriented towards nature and eco-friendliness, showcasing the culture of Kalimantan.
The airport construction in IKN is set to be completed by 31 December 2024, with the runway spanning 3,000 metres and the terminal covering 7,350 m². Nusantara Airport will be able to accommodate the largest types of aircraft, including the B-777 300 ER and the A380.
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