President Joko “Jokowi” Widodo has signed a presidential regulation that grants investors certain rights in the Nusantara Capital City (IKN) megaproject in East Kalimantan, the future capital, including land rights of up to 190 years.
The regulation stipulates that the Agrarian and Spatial Planning Ministry can grant investors the right to cultivate (HGU) for 95 years upon approval from the IKN Authority.
The IKN Authority is obligated to evaluate the land after five years to ensure it is in good condition and that the rights holder is utilizing it properly. Contingent on passing the evaluation, authorities can then issue a second HGU for another 95 years for a total period of 190 years.
The new regulation also contains a provision on granting investors the right to build (HGB) for 80 years, which can be extended for another 80 years upon passing the fifth-year evaluation.
Jokowi’s administration has been struggling to attract foreign investors to Nusantara. This has raised concerns about the project’s continuity, especially since 80% of its budget hinges on private sector financing, with the state shouldering the rest.
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