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View all search resultsCourt bans 190-year concessions, adding to Nusantara doubts
The Constitutional Court struck down a legal provision allowing developers in Indonesia’s future capital to hold land rights for up to 190 years, adding uncertainty for investors already wary of the megaproject.
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This picture, taken on Aug. 14, shows civil servants working at Nusantara, the future capital city currently under construction in East Kalimantan. (AFP/Yasuyoshi Chiba)
O
fficials have played down a court ruling that prevents authorities from granting investors in Indonesia’s future capital city land rights of up to 190 years, but there are concerns the move further erodes already weak business confidence in the megaproject.
The Constitutional Court on Thursday canceled a provision in the Nusantara Capital City (IKN) Law that allowed land-use rights, such as the right to cultivate (HGU), for two continuous cycles totaling a maximum of 190 years.
Land rights in Nusantara must now follow the country’s standard framework, as stipulated in the Basic Agrarian Law, which grants initial rights of 35 years, a 25-year extension and a 35-year renewal, all subject to certain criteria and periodic evaluation.
This brings the total maximum duration to 95 years, or half of what the government was offering for projects in the under-construction city in East Kalimantan.
Additionally, right-to-build and right-to-use permits allow a maximum 30-year initial period, a 20-year extension and a 30-year renewal, also subject to approval.
The ruling followed a petition by two locals, who argued that granting long-term land rights could undermine the interests of future generations.
Constitutional Court Chief Justice Suhartoyo declared in a statement published along with the ruling that the previous land rights provision in the IKN Law “contradicted the Republic of Indonesia’s 1945 Constitution and has no legally binding force” unless interpreted with the standard duration limits.
