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Analysis: Prabowo, an IKN investor, vows more investment to follow
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Presidential candidate Prabowo Subianto claims victory at his house in Jakarta on April 17, just hours after polling stations closed nationwide. (JP/Dhoni Setiawan)
P
resident-elect Prabowo Subianto has reaffirmed his promise to continue the development of the planned new capital Nusantara once he takes office. In an effort to dispel investors’ concerns about Nusantara's future, Prabowo has said he is an investor in the capital city project.
Prabowo made the promise during the first plenary cabinet meeting held in Nusantara, East Kalimantan, on Monday. He acknowledged the groundwork laid by President Jokowi in initiating the Nusantara Capital City (IKN) project and expressed his incoming administration’s commitment to continuing and completing the ambitious undertaking. On the same day, while accompanying President Jokowi on an inspection of the MBH reservoir, Prabowo disclosed his investment contributions to the IKN as a businessman.
Prabowo’s assurance of the IKN project’s continuity comes amid speculation among investors and the public that Prabowo may not continue the IKN project as expected, as rumors circulate that Prabowo plans to govern from Jakarta and not Nusantara and would instead ask his vice president, Gibran Rakabuming Raka, to work from the city.
President Jokowi has not signed the necessary presidential regulation to officially transfer the capital from Jakarta to Nusantara, as the latter is not ready to accommodate the full operation of the central government. Prabowo hopes that in three to five years, the core area of Nusantara, which hosts government offices, will be completed and capable of supporting full government operations.
The government has, since the project’s launch in 2022, spent Rp 84.5 trillion (US$5.2 billion) from the state budget for the construction of the core area of Nusantara. The government hopes the state budget will fund only 20 percent of the total cost of the IKN project, totaling some Rp 541 trillion, and the rest will come from private investment.
According to IKN Authority acting chairman Basuki Hadimuljono, private investment has reached Rp 56.2 trillion in 55 projects. These projects include 14 office and banking projects, 10 in retail and logistics, nine residential and green areas, eight hotel projects, six in the education sector, three in media and technology, three in the health sector and two in the energy and transportation sector.
Four of these projects had their groundbreaking ceremonies on Monday. These four projects are from Intiland with a substantial investment of around Rp 2.6 trillion, the Royal Golden Eagle (RGE) Group with Rp 2 trillion, Swiss-Belhotel with an investment of Rp 300 billion and Bank Central Asia (BCA) with 75 billion. The IKN Authority is seeking some Rp 100 trillion from private investors by the end of the year.
