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tate-owned house developer Perum Perumnas and city-owned developer PT Jakarta Propertindo (Jakpro) signed a memorandum of understanding (MoU) on Thursday to build an apartment complex in Kemayoran, Central Jakarta.

Perumnas president director Himawan Arief Sugoto said the two firms would build 40 towers of low-cost apartments, consisting of 18,000 apartment units, on a 22.4-hectare site in Kemayoran, Central Jakarta.

Of the 40 towers, 10 will be rusunawa (low-cost rented apartments), while the remainder will be rusunami (subsidized low-cost apartments).

'€œWe will develop an integrated apartment compound with various facilities such as shopping and health centers, among many others,'€ Himawan said after the signing at the office of State-Owned Enterprises Ministry in Central Jakarta.

The MoU signing was witnessed by State-Owned Enterprises Minister Rini Soemarno, Public Works and Public Housing Minister Basuki Hadimuljono, Jakarta Governor Basuki '€œAhok'€ Tjahaja Purnama, state-owned Bank Tabungan Negara (BTN) president director Maryono, and state construction firm Pembangunan Perumahan president director Bambang Triwibowo.

Himawan pointed out that the development was part of the central government'€™s nationwide project to develop 1 million affordable homes, which was launched earlier this year. Perumnas earlier this year also started construction of 18 towers of rusunami on a 4.97-hectare site in Cengkareng, West Jakarta, which will be completed next year.

Himawan further said that of the 22.4 hectares of land, as much as 14.4 hectares were currently still a slum area occupied by dozens of families. However, according to Jakarta Urban Poor Network, 5 hectares of land are typically occupied by thousands of families.

The remaining eight hectares, according to Himawan were occupied by an existing apartment complex which must be emptied and completely renovated. He said that the existing apartment complex was in '€œdire condition'€.

'€œWe predict that about 72,000 people will live in this apartment complex. The city administration will soon begin construction of an LRT [light rail transit] system, which will run near the complex, and this will benefit the residents,'€ he said.

Himawan said that Perumnas and Jakpro would cooperate in the development, and added that the two firms would hold further technical discussions for the construction plan. '€œHopefully we can begin construction early next year. In 2018, we will finish about 10 towers, and complete the remainder in the following years,'€ he said.

Separately, Maryono said BTN would fund the development of the apartment complex. '€œWe'€™re committed to supporting the program to provide affordable housing, and we will assist in funding the development,'€ Maryono told reporters.

He said, however, that BTN as well as Perumnas and Jakpro were currently calculating the funding needed to construct the 40 towers.

Maryono said the bank was able to provide up to trillions in funding, as the apartment complex would not only provide housing but other supporting facilities.

Ahok said the apartments would be designated for low-income residents. He said the city administration would prioritize the Kemayoran residents who would be evicted to build the apartment complex.

'€œThere will be a number of families who will be evicted to build the complex. They will be the first to receive an apartment unit,'€ Ahok told reporters, adding that Jakpro along with the Housing and Public Buildings Agency would be responsible for the evictions.

He said evictees would have to find their own temporary accommodation, but stressed that units would be reserved for them. Residents living in the existing rusunawa must also find somewhere to live during the renovation of the building.