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Plans for new capital on track with int'l support
President Joko “Jokowi” Widodo explained on Friday that his recent move to invite world-renowned figures to join a steering committee for the relocation of the country's capital to East Kalimantan was made to win the trust of investors as the government seeks greater participation from the private sector to finance the multibillion-dollar project
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span>President Joko “Jokowi” Widodo explained on Friday that his recent move to invite world-renowned figures to join a steering committee for the relocation of the country's capital to East Kalimantan was made to win the trust of investors as the government seeks greater participation from the private sector to finance the multibillion-dollar project.
During a recent official visit to the United Arab Emirates (UAE), Jokowi invited UAE Crown Prince Sheikh Mohammad bin Zayed al Nahyan to join the steering committee, which also includes the chief executive officer of a Japan-based diversified conglomerate, the Softbank Group, Masayoshi Son, and former British prime minister Tony Blair.
He told reporters he was hoping to tap into the wealth of experience of these people, adding that it would hopefully also attract more private investors to help develop the new capital.
“We want to build trust. The established trust would make it easier for us to cooperate [through] public-private partnerships [PPP] or other [forms of] cooperation,” said Jokowi at the Merdeka Palace on Friday. “I perceive Sheikh Mohammad bin Zayed, Masayoshi Son and Tony Blair as people with good reputations internationally.”
Jokowi emphasized that the move did not mean that the government would take up loans or provide some form of guarantee through the steering committee.
Southeast Asia's largest economy attracted global attention when it announced in August that it would move its capital from flood-prone and sinking Jakarta on Java Island to a 256,000-hectare forested area straddling the regencies of North Penajam Paser and Kutai Kartanegara in East Kalimantan on Borneo, an island that it shares with Malaysia and Brunei Darussalam.
The Indonesian government has estimated that the new capital will cost Rp 466 trillion (US$34.06 billion) and has declared it will finance one-fifth of that with the state budget.
Jokowi said that public money would fully fund the 5,600-ha downtown area of the new capital, where the new presidential palace and other government buildings would sit.
Previously, Coordinating Maritime Affairs and Investment Minister Luhut Pandjaitan said that the UAE government had prepared $22.8 billion to invest in Indonesia through a sovereign wealth fund together with Japanese conglomerate SoftBank and the United States International Development Finance Corporation.
"During the tête-à-tête the President talked about the sovereign wealth fund and the crown prince repeatedly said that Indonesia is a close friend [of the UAE] and that Indonesia is the country with the largest Muslim population [in the world]," Luhut said on Sunday.
At the Jakarta palace on Jan. 10, Son met Jokowi and expressed an interest in participating in the project and, according to Luhut, offered $30 billion to $40 billion for the development.
Son earlier announced another round of investments worth $2 billion for the Indonesian branch of Singapore-based Grab.
Jokowi said that more than just attracting investment, the renowned figures on the steering committee also have expertise in developing capitals.
"Sheikh Mohammad bin Zayed has experience reconstructing Abu Dhabi, building a new city called Masdar City, [...] Masayoshi Son has a good reputation in technology and finance [and] Tony Blair has a good reputation in governance," said the President, who previously served as Jakarta governor and Surakarta mayor.
The government said it was also ready with a new bill that would become the legal basis of the massive construction project.
The National Development Planning Board (Bappenas) has held public consultations with other government agencies to disseminate information about the omnibus bill on the capital's relocation, which will take a specific approach so that it will not override existing laws and regulations.
“As the bill is intended to specifically regulate the capital's relocation, it takes a lex specialis approach,” a special staff member for the national development planning minister, Diani Sadia Wati, said.
Lex specialis is a legal doctrine that allows a specific regulation to supersede a general regulation, known as lex generalis, without nullifying the latter.
Jokowi said the omnibus bill would be ready for deliberation in the House of Representatives next week. (mpr)
