Indonesian Consortium Project Marks Milestone in Nusantara’s New Capital City. In a momentous event, the Agung Sedayu Group, led an Indonesian consortium in celebrating a major achievement on Thursday. They initiated the very first privately-backed development project in the emerging new capital city of Nusantara, Indonesia.
President Joko Widodo joined the groundbreaking ceremony near the future presidential palace, an hour’s drive from Balikpapan, East Kalimantan’s largest city on Borneo island. The private consortium’s ambitious project includes a five-star hotel, shopping malls, and office towers. In his speech, President Widodo stressed prioritizing domestic investors as trailblazers for others to follow.
Indonesian Consortium’s $1.3 Billion Initiative
The consortium comprises prominent entities like the Salim Group, Sinar Mas Group, Pulauintan, Adaro, Barito Pacific, Astra Group, Mulia Group, Alfamart Group, and Kawan Lama Group. Together, they’ll invest 20 trillion rupiahs ($1.3 billion), as confirmed by Minister Bahlil Lahadalia at the event. Bambang Susantono, head of the Nusantara National Capital Authority, stated the consortium’s plans to build a botanical garden, public parks, and open spaces, enhancing the city’s appeal. These facilities are crucial to support the projected 2 million population by 2045.
Agung Sedayu Chairman, Sugianto Kusuma emphasized their commitment to success of the Indonesian consortium project. Furthermore, he addressed challenges such as permits and timelines. The government has set a completion deadline for next year, and the consortium is exploring additional facilities.
Earlier this year, the government introduced incentives, including land-use concessions up to 190 years, to attract investors. Furthermore, a revision is in progress for the new capital city law passed in early 2022, aimed at streamlining bureaucracy and granting more authority to the Nusantara National Capital Authority to facilitate increased investments.
The government aims to complete the first phase of the over $30 billion capital relocation project by next year. This involves hosting Independence Day on August 17 at the new palace, with civil servant relocation in the prior month.
As of this month, the Nusantara National Capital Authority reports that overall construction of the Indonesian consortium project has reached 45% of the total planned. An additional $2 billion has already been expended from the state budget and $2.6 billion allocated for next year’s development.