President Joko Widodo has signed a presidential decree that grants real estate management rights of the new Indonesian capital, Nusantara, to investors for a period of 190 years.
The decision has sparked widespread debate, with some viewing it as a desperate bid to attract funding, and others criticizing it as imprudent, according to a report by AsiaNews.
The capital relocation project, which aims to move the administrative hub from Jakarta to East Kalimantan, has faced numerous setbacks including delayed construction due to adverse weather conditions and a lack of basic utilities such as water and electricity.
President Widodo cited heavy rains for recent delays, stating that such challenges are typical for large-scale developments.
The new capital, intended to alleviate the congestion and environmental stresses faced by Jakarta, is planned to span approximately 2,000 square kilometers and involves an estimated cost of 460 trillion rupiah ($35 billion).
However, as of January, only about 48 trillion rupiah had been secured. The funding gap is expected to be bridged by private investors, with the state covering only 20 percent of the total costs.
The initiative has not been without controversy, particularly following the recent resignation of key project managers Bambang Susantono and his deputy, Dhony Rahajoe, under unclear circumstances.
The resignations and the decision to open the city’s management to private investors for nearly two centuries have led to public outcry and skepticism among local citizens and lawmakers alike.
Economic researcher Jaya Darmawan expressed concerns about the feasibility of attracting long-term investments, citing significant financial risks and the ongoing issues with basic service provisions in the area.
“Jokowi’s decision to leave the property management to investors for 190 years will only create problems, because there are not so many commercial entities willing to invest in Nusantara,” an AsianNews report quoted Darmawan.
“Financial returns and business risks are certainly key issues for any investor but basic services are still a serious concern,” she added.
Despite these challenges, the inauguration of Nusantara is scheduled for August 17, coinciding with Indonesia’s Independence Day.
The ceremony is expected to be symbolic, with incoming President-elect Prabowo Subianto and outgoing President Widodo, alongside other key political figures, marking the beginning of what is envisioned as a multi-decade project.
