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Jokowi inks 190-year IKN land rights rule for investors
President Jokowi has issued a new regulation that grants investors an HGU of up to 190 years and an HGB of up to 160 years, contingent upon an evaluation in the fifth year, as the government struggles to lure investors to finance the IKN megaproject.
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Scaffolding and cranes stand on July 11, 2024 at the site of the new presidential palace under construction in Nusantara, North Penajam Paser, East Kalimantan, slated to be inaugurated as the country's administrative center during the 79th Independence Day celebrations on Aug. 17, 2024. (AFP/Yasuyoshi Chiba) (AFP/Yasuyoshi Chiba)
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n a bid to lure investment to the Nusantara Capital City (IKN) megaproject in East Kalimantan, President Joko “Jokowi” Widodo signed on Thursday a presidential regulation that grants investors certain rights, including land rights of up to 190 years in the future capital.
The regulation stipulates that the Agrarian and Spatial Planning Ministry can grant investors the right to cultivate (HGU) for 95 years upon approval from the IKN Authority.
The IKN Authority is obligated to evaluate the land after five years to ensure it is in good condition and that the rights holder is utilizing it properly. Contingent on passing the evaluation, authorities can then issue a second HGU for another 95 years for a total period of 190 years.
Read also: Missed construction targets put capital relocation plan in limbo
The new regulation also contains a provision on granting investors the right to build (HGB) for 80 years, which can be extended for another 80 years upon passing the fifth-year evaluation.
The presidential regulation comes as the Jokowi administration is struggling to attract foreign investors to Nusantara. This has raised concerns about the project’s continuity, especially since 80 percent of its budget hinges on private sector financing, with the state shouldering just 20 percent.
Related authorities are racing to complete government buildings and crucial public services in Nusantara so it can host the 79th Independence Day celebrations on Aug. 17, 2024, when it is to be inaugurated as the national capital.
Recent delays, however, have forced the outgoing president to postpone a plan to start working from Nusantara in July.
