TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Softbank, Indonesia locked horns over new capital: Sources
Change Size
SoftBank Group founder and CEO Masayoshi Son (center) walks with Grab CEO Anthony Tan (left) after attending a meeting with President Joko “Jokowi” Widodo. (Kompas.com/Ihsanuddin)
S
oftbank Group founder Masayoshi Son and government officials had been in dispute over key details of the new capital long before the Japanese company withdrew from President Joko “Jokowi” Widodo's ambitious pet project, sources familiar with the matter have said.
The sources, who asked not to be named because of the confidentiality of the information, said Softbank founder Masayoshi Son had wanted the government to relocate all industries in Jakarta to East Kalimantan and to ensure that the capital had a minimum of 50 to 75 million inhabitants in the first phase of relocation so that it would be able to deliver the desired returns.
Government officials had said they could not force industries to relocate, and that Jakarta, which has a population of around 10.5 million, already suffered from congestion and pollution at its current scale, said the sources.
Jakarta and the core area designated for the new capital city are of roughly the same size at 66,150 hectares and 56,180 hectares, respectively.
“That was impossible,” said one of the sources, who attended a meeting between Softbank and the Office of the Coordinating Maritime Affairs and Investment Ministry.
The information sheds new light on the reasons behind Softbank’s withdrawal from the new capital project, a major blow to the endeavor, as the Japanese company was reportedly ready to invest US$30 billion to $40 billion in the new capital, a huge portion of the initial development cost.
Building the basic infrastructure of the capital is expected to cost around Rp 466 trillion ($32.6 billion). The government plans to pay one fifth of the bill with the state budget, leaving the remaining four fifths dependent on private investment or public-private partnerships.
