The Authority for the Nusantara Capital City (OIKN) has unveiled plans to kick off the construction of 70 residential towers in the forthcoming capital city later this year, leveraging a hybrid model of public-private partnership (KPBU) scheme.  

As an effort to expedite the development, the OIKN will forgo the conventional public-private partnership bidding process, which typically lasts for 18 months. The construction is aimed to be completed by 2025 or 2026. 

During a press briefing held on March 7, 2024, Agung Wicaksono, Deputy for Funding and Investment of the OIKN, conveyed optimism about adhering to the proposed timeline. 

"If we can adhere to the timeline, we can anticipate breaking ground this year. With smooth progress, by 2025, there will be completion," Mr. Wicaksono said, as quoted by Tempo. 

The residential towers are designated for civil servants, along with police and military staff. They will complement another 49 towers funded through the state budget. The priority of housing in the IKN’s development agenda was also underscored by Mr. Wicaksono. 

"This residential KPBU is the first thing to be needed in IKN, we allocate at least 600 hectares of land for housing," he continued. 

He estimated the investment required for the construction of special housing for state civil apparatus alone to surpass IDR 150 trillion, with ongoing efforts to attract investors for residential development in the new capital. 

Presently, seven consortia, including notable Indonesian entities such as Triniti, Nindya Karya, Intiland, Ciputra, the Chinese state-owned CITIC Construction within the Nusantara Consortium, and Malaysia-based IJM Corporation and Maxim Global, have received preliminary approval to tackle the project, with a collective capital expenditure proposal of approximately Rp 50 trillion (about US$3.19 billion). 

Mr. Wicaksono clarified that the consortia's role as project executors remains subject to finalization, with an ongoing parallel market-sounding exercise intended to broaden investor participation. The final decision is to be anticipated by June.  

“The objective of today’s market-sounding event is to attract interest from other investors, as the PPP scheme is [conducted] in the spirit of competition,” Mr. Wicaksono explained.  

Furthermore, he detailed the financial blueprint for the new capital's development, indicating a total physical construction budget of Rp 466 trillion, of which only Rp 90 trillion is expected to be directly financed by the state budget. The remainder is expected to come from public-private partnerships and private investments, reflecting a diversified funding strategy for the monumental project.