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By APD writer Alice
Indonesian Coordinating Minister for Maritime Affairs and Investments Luhut Binsar Pandjaitan said on February 28, the Indonesian government hired three international consulting companies to develop a master plan for the country’s new capital city in East Kalimantan province.
According to the minister, AECOM construction company and McKinsey & Company management consulting firm of the US, and Japan's Nikken Sekkei architecture and construction company will design the new capital in the model of a smart and environmentally friendly city. McKinsey & Company is hired to support the National Development Planning Agency (Bappenas), while Nikken Sekkei will work with SoftBank - the Japanese corporation recently committed to investing in this 33 billion USD mega project.
Speaking on the sidelines of a meeting on the new capital building project with the participation of former British Prime Minister Tony Blair and billionaire Masayoshi Son - founder and CEO of SoftBank, Minister Luhut said that all the three consulting firms have experience in designing big cities.
Last August, the Indonesian government announced a plan to move the capital, Jakarta, on the island of Java, which regularly faces floods and sea-level rise to an area of 256,000 hectares in the two districts of North Penajam Paser and Kutai Kartanegara of East Kalimantan province on the island of Borneo.
The Indonesian government estimates the project will cost up to 466 trillion rupiah (33.3 billion USD), of which 54.4% will come from public-private partnerships, and 26.4% from the private sector and 19.2% from the state budget. Under the plan, the state budget will be used to build the 5,600ha core area of the new capital, where the Presidential Palace and other government buildings are located.
Recently, the Government of Indonesia has set up a steering committee for the new capital building project with former British Prime Minister Tony Blair, billionaire Masayoshi Son and Crown Prince of the United Arab Emirates (UAE) Sheikh Mohammad bin Zayed al Nahyan among its members. Earlier, sources said the UAE government would invest 22.8 billion USD in this mega project through a national investment fund, along with SoftBank and the US International Development Finance Corporation (USIDFC).
The Indonesian government will set up a "special agency" with the mission of managing domestic and foreign investment projects in the new capital city in East Kalimantan.
The agency would have the authority to grant investment licences without consulting the Indonesian Investment Coordinating Board (BKPM), according to National Development Planning Minister Suharso Monoarfa.
He said investors from South Korea, Japan, Spain, the United States and Germany have expressed their interest in engaging in the construction of works for the new capital city. However, no agreement has been signed yet because the Indonesian government is still identifying projects requiring foreign investment as well as capital needs.
Meanwhile, Minister Luhut Binsar Pandjaitan said the agency would be led by a minister-level official who is being selected by President Joko Widodo.
According to Minister Suharso, the Indonesian government is expected to start construction of the new capital's basic infrastructure facilities by the end of this year after the overall design is completed. If all goes on schedule, the new capital city will be operational by the first half of 2024.
(ASIA PACIFIC DAILY)
