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akarta Governor Basuki “Ahok” Tjahaja Purnama has permitted 11 buildings to break the floor area ratio (KLB) limit, allowing them to build more stories by paying Rp 3.88 trillion (US$294.88 million) in compensation.

Ahok said he granted the proposals of the 11 companies because their buildings were near planned Mass Rapid Transit (MRT) or Light Rapid Transit (LRT) lines.

“We have regulated that only buildings situated near MRT, LRT or primary commercial zones are allowed to propose building more stories in their buildings,” the governor said last week. The city administration, Ahok said, wanted to develop “a compact city”.

The area of buildings that can increase their number of stories is regulated in Gubernatorial Regulation No. 175/2015 on compensation for exceeding the KLB.

The KLB is the ratio of floor area and the size of usable land on which a building stands. It is regulated in a 2014 bylaw on spatial planning.

The 2015 regulation states that buildings able to propose more floors are those located in primary activity centers, strategic economic areas, transit-oriented development areas and public transportation hubs.

Ahok said the city had outlined fines for breaking the KLB limit. “The companies can choose [how they pay]. We have lists of infrastructure [projects] that we need to build.”

He said fine could not be paid in the form of funds, but in assets.

Exceeding the KLB limit for a building, as regulated in the spatial planning bylaw, is a common violation in Jakarta. Ahok said rather than having companies bribe city officials, it was better to legalize
the issue.

Ahok has already approved proposals from 11 companies with varying scales.

The companies include developer PT Mitra Panca Persada, which has begun to construct the Semanggi flyover project, worth Rp 579 billion. The company has proposed increasing its building on Jl. Sudirman from seven stories to 13.

Meanwhile, PT Sampoerna Land has proposed increasing its building on Jl. Satrio from seven to nine stories, for compensation of Rp 723 billion. Data said the compensation would be in the form of three low-cost apartment towers in Daan Mogot, West Jakarta, comprising 840 apartments, the rehabilitation of the General Elections Commission secretariat office and supporting facilities as well as a revamp of Kota Tua in West Jakarta.

Property company PT Keplan Investama has also delivered on its ability to pay a fine of Rp 542 billion in the form of building a low-cost apartment complex in Cengkareng Barat, West Jakarta, in order to increase its building on Jl. Sudirman in Central Jakarta from 7.3 to 11.8 floors.

Gamal Sinurat, assistant to the city’s secretary for development, confirmed that the proposals of the 11 firms had been approved. “We have determined some of the compensation but we are still negotiating for others,” he said.

Gamal explained that the amount of compensation would be determined by three factors — the taxable value of property (NJOP), the size of the stories and the index value. “The bigger all factors are will create bigger compensation,” he said.

The assistant said the value of compensation would be determined when the city administration and the relevant company signed a cooperation agreement.

“After the construction of the infrastructure is completed, we will appoint an appraisal team to value it in order to compare whether the value is the same as the amount of compensation that we agreed on,” he said.

“If it is lower, the company should build more infrastructure to pay the remaining fines,” he added.