Hospital chain Hermina to invest in Indonesia's planned new capital

JAKARTA (Reuters): Hospital operator Medikaloka Hermina expects to break ground in August on an international-quality hospital in Indonesia's planned new capital city of Nusantara, a company director said on Wednesday (June 21).

The hospital would rank among the first private sector investments in the city of Nusantara, which the Indonesian government is building from the ground up in a former jungle on the island of Borneo at an estimated cost of US$32 billion.

The government plans to move 16,000 civil servants, police and military officers to Nusantara starting next year, but as of March, only settlements for workers were ready at the site and construction of other buildings remained underway.

Hermina plans to invest 240 billion rupiah ($16.02 million) to build the hospital in Nusantara, aiming for commercial operation by August 2024, company director Aristo Setiawidjaja said in a text message.

"The hospital will provide services for mothers and kids, for stroke, cardiology and other services provided in hospitals with international standards," he said, adding the investment would be funded with a combination of internal cash and a bank loan.

The hospital, to be built in the main administrative area, would have a capacity of 100 beds at initial stage, to be upgraded to 200 beds later, Aristo said.

Hermina signed an agreement with the Nusantara authority's business entity, Bina Karya, to speed up the investment process, he added.

The Indonesian government has been promoting the Nusantara project to investors, including in Singapore earlier this month where President Joko Widodo sought to reassure them that the project would continue after an expected transition of power in next year's general and presidential elections.

Officials said foreign investors from countries including South Korea, Japan, China, Germany and the United Arab Emirates have shown interest, but no deal had been signed.

Indonesia announced in 2019 it would move the capital city from overcrowded and sinking Jakarta to the new city.