Aerial view shows the future presidential palace in the new capital city of Nusantara. - AFP
JAKARTA: A presidential regulation allowing investors to hold nearly 200-year land permits in the country’s future capital has drawn widespread criticism, with many describing President Joko 'Jokowi' Widodo’s regulation as short-sighted and designed simply for the sake of seeing through his megaproject.
Jokowi’s administration has been racing to complete the key construction projects in Nusantara, East Kalimantan, in the hope of relocating the capital there before the outgoing president steps down from office in only four months.
The project carries an overall cost of around Rp 541 trillion (US$35 billion) yet the state will only finance 20 per cent of the total expense, putting the financial burden squarely on the private sector’s shoulders.
In the hope of boosting investment in the project, Jokowi signed a regulation last week that allows investors to apply for land right permits, in the form of the right to cultivate (HGU), of up to 190 years.
Prospective investors will need to apply for a first term of 95 years, which could be doubled later following an evaluation by the Nusantara Capital City (IKN) Authority. The evaluation will be conducted after five years, and the authority will assess whether the land is being utiliSed properly.
A similar mechanism is also in place for the right-to-build (HGB) and right-to-use (hak pakai) permits, which includes two 80-year terms.
The presidential regulation is a follow-up to the 2023 National Capital City (IKN) Law, which also makes way for investors to obtain back-to-back 95-year HGU and 80-year HGB permits, albeit these permits are to be issued in intervals.
The country’s private sector admitted previously that such permits would make investing in Nusantara more attractive.
The presidential regulation has sparked controversy among critics.
Benny Wijaya of the Agrarian Reform Consortium (KPA) said that giving land permits of up to 190 years was unheard of in the country’s history, and that it would adversely impact locals living around Nusantara in the long term, given past instances of land squabbles and forced evictions.
“All for the sake of garnering [investor] interest, the government is doing a ‘clearance sale’ of land in Nusantara. Even back when [Indonesia was a Dutch colony], land concessions only lasted for 75 years, and that already gave rise to long-standing conflicts and inequality,” Benny told The Jakarta Post on Monday.
Public policy expert Agus Pambagio was doubtful that longer HGU and HGB permits would be enough to convince investors to put their money into Nusantara, saying that it only showed Jokowi’s willingness to see through the project at all costs.
“It’s not about the length of the land permits. Rather, investors need to be sure about how many people will be there and for how long they will continue living there,” Agus said.
“I think [Jokowi] is becoming desperate, and it’s dangerous. I’m worried it might be another [abandoned project].”
Political analyst Adi Prayitno also questioned whether Jokowi’s successor, president-elect Prabowo Subianto, would be willing to continue the new city’s development once he assumes office in October.
“Since [Prabowo] has big budget projects of his own, such as the free meal programme, it’s no wonder that the public is unconvinced that Nusantara will still be his priority,” Adi said on Monday.
On the other hand, Agrarian and Spatial Planning Minister Agus Harimurti Yudhoyono hailed the regulation, claiming it provided legal certainty to potential investors.
“Since it’s a longer period of time, hopefully investors everywhere can have more certainty,” he said on Monday, as quoted by Antara.
Agus went on to suggest that the longer permits was a policy applicable only for Nusantara, saying that the government had to come up with a new strategy to garner investment interest in the new city.
Echoing Agus, Trade Minister Zulkifli Hasan also said that the regulation would hopefully result in more interest in investing in Nusantara.
“Previously, there was no clarity on [investors’ land rights]. So, how do people build when they [are not guaranteed] any land? With the regulation now finalised and signed by the President, hopefully, those [investors] will be interested in building and investing in Nusantara,” Zulkifli was quoted by Antara as saying on Sunday. - The Jakarta Post/ANN
