Dubai group keen to invest in Nusantara


Track record: Prabowo at the Merdeka Palace in Jakarta. His administration says that it’s not just the IKN Authority providing the guarantees, but that thay will also be backed by the Finance Ministry. — AFP

JAKARTA: The Nusantara Capital City (IKN) Authority says the Ayedh Dejem Group from the United Arab Emirates (UAE) has submitted an expression of interest to invest in the commercial area of the nation’s future capital in East Kalimantan.

IKN Authority head Basuki Hadimuljono said that the Dubai-based company was looking to develop a 10 ha plot in Nusantara’s mixed-use commercial zone, which restricts the development of competing shopping centres within a five km radius.

“Ayedh Dejem Group has also made plans to acquire four ha of additional land as a part of its social commitment,” Basuki said, as quoted by state news agency Antara.

He declined to reveal the investment amount, as the company had signed a non-disclosure agreement.

Ayedh Dejem chief investment officer Zed Ayesh said the company’s “collaboration with the IKN Authority could become the beginning of its long-term journey in Indonesia”, according to Antara.

The UAE firm’s potential investment in Nusantara is the first to surface in months since President Prabowo Subianto indicated his priorities were different from that of his predecessor Joko “Jokowi” Widodo, who initiated the IKN relocation and development megaproject.

During a meeting last month between the IKN Authority and a consortium led by China Harbour Engineering Co Ltd (CHEC) and which included Malaysian construction firm IJM, investors sought clarity on the government’s risk-mitigation framework for public and private partnership (PPP) investments.

The consortium particularly emphasised the importance of long-term safeguards before moving forward with commitments.

In response, the authority promised that investments would be guaranteed through the Finance Ministry and its infrastructure guarantee arm, PT Penjaminan Infrastruktur Indonesia.

“Investors, need not worry about these projects being terminated halfway. It’s not just the IKN Authority providing the guarantees, this will also be backed by the Finance Ministry,” Basuki said in a statement.

The CHEC-IJM consortium is currently involved in two key PPP infrastructure projects in Nusantara: building 20 residential towers for civil servants in the Central Government District (KIPP) at an estimated cost of 13.4 trillion rupiah and developing a 26.87 km road and multi-utility tunnel in an adjacent area.

The IKN Authority also accepts unsolicited PPP proposals, meaning that private entities like the CHEC-IJM consortium can submit projects without public tenders.

In return, these projects might receive compensation in the form of management rights or revenue sharing.

“The government, through the Public Works Ministry, has never terminated a PPP project.

“Before prequalification or procurement begins, the IKN Authority must get the Finance Ministry’s approval,” Basuki said, underlining Indonesia’s solid track record in public and private partnerships.

The Nusantara megaproject is expected to span decades and cost between 500 trillion and 600 trillion rupiah, 20% of which is to come from the state coffers and the rest from private investors, foreign or domestic.

On April 15, the IKN Authority said the second phase of construction on the future capital had begun, though it was short on details as to when it commenced or what it entailed. — The Jakarta Post/ANN

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