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Govt may lease office buildings in Jakarta to finance new capital city
Assets mostly in the form of office buildings could be leased or commercially managed under partnership with private companies
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The 132-meter National Monument tower at the center of Merdeka Square, Central Jakarta, is one of most popular tourist destinations in the capital. The government is considering the relocation of the capital city to Kalimantan. (Antara/Yulius Satria Wijaya)
T
he government is seeking alternatives other than tax revenues to finance the development of the new capital city, most likely in Kalimantan, which will cost at least Rp 466 trillion (about US$33.28 billion).
Among the most feasible alternatives is to monetize government assets, either office buildings or other properties, especially those located on main streets in Jakarta such as Jl. Merdeka, Jl. Sudirman and Jl. Thamrin.
Those assets, mostly in the form of office buildings can be leased or commercially managed in partnerships with private companies, National Development Planning Minister Bambang Brodjonegoro said following a limited Cabinet meeting in Jakarta on Tuesday.
They could also be sold under a swap scheme that would oblige the buyers to build infrastructure facilities in the new capital, Bambang said.
Such a financing option would alleviate the burden on the state budget in financing the plan to relocate the seat of the government, Bambang said. thr use of the government of office buidings and other assets in Jakarta would gradually decline as government officials relocated to the new capital.
“[Government] assets in Jakarta could be used as a new source of non-tax revenue,” said Bambang recently in Jakarta.
Revenue raised from those assets could amount to Rp 150 trillion (US$10.5 billion), according to an initial estimate made by the National Development Planning Board (Bappenas).
