DIGIVESTASI - Basuki Hadimuljono Reveals Challenges of Foreign Investment in the New Capital Nusantara. Acting Head of the Nusantara Capital Authority (OIKN), Basuki Hadimuljono, disclosed that foreign investment in IKN has so far been nonexistent. This is despite OIKN's target of achieving a total investment of IDR 100 trillion this year. Basuki is committed to accelerating interest from foreign investors who have submitted letters of intent (LoIs) to begin groundbreaking in July 2024.

"During my tenure as Acting Head of OIKN, nothing has materialized yet. Hopefully, it will soon because the President has requested that groundbreaking be done by July 2024," he said when met at the Ministry of Public Works and Public Housing office on Friday (June 23, 2024).

Furthermore, Basuki revealed that prospective investors generally aim for a return on investment or Internal Rate of Return (IRR) above 12%. Studies are currently underway because if the IRR is below 11%, the government usually provides construction support to make investment projects more attractive to investors.

"So far, there are a few letters that only indicate interest. Currently, Mr. Agung (Deputy for Funding and Investment of OIKN) is discussing the details. If the IRR is above 12%, it will definitely be attractive to both foreign and national investors," he added.

According to Bisnis.com, several foreign investors have expressed interest in investing in IKN, particularly in the housing sector. At least three foreign investors have committed to building 90 apartment towers in IKN shortly. They are Citic Construction from China and two property companies from Malaysia, Maxim and IJM.

Citic Construction, part of the Nusantara Consortium together with PT Risjadson Brunsfield Nusantara, will build 60 apartment towers for the Ministry of Defense and Security with an investment value of IDR 30.8 trillion. Meanwhile, IJM Corporation Berhad and Maxim Properties will each build 20 and 10 housing towers for civil servants in IKN.

However, foreign investment interest through public-private partnership (PPP) schemes for the housing sector in IKN is still hampered by cost issues. Basuki mentioned that the return on investment costs are still too high. "The PPP for civil servant apartments in IKN is expensive; the cost of money can be 2-3 times the total investment value," he said when met at the Sultan Hotel, Jakarta, on Thursday (June 20, 2024).

Basuki also added that the return on investment costs for the housing sector are considered higher compared to the interest rates on syndicated bank loans. "So we are still calculating it carefully; it's better to get a loan because the interest rate is still lower," he concluded.

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