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Indonesia will start in the second quarter of this year a $2,7 billion project for the construction of a second block of residential buildings on the site of the future administrative capital of the country, Archipelago. This was stated by an Indonesian official, according to whom the project for the new residential block involves the construction of 184 apartment towers to house around 14.500 public officials. The site of the future capital, which stands in a wooded area in Borneo, is already the subject of works for the construction of basic infrastructure. Bambang Susantono, director of the Nusantara National Capital Authority, said that the project for the new residential block is the subject of negotiations with three private developers: a consortium led by the Chinese company Ccfg Group; the South Korean company Kore Land and Housing Corp; and local developer Pt Summarecon Agung.
The new capital project should cost a total of 31 billion dollars, and the Indonesian government intends to finance it for 80 percent through foreign investments. However, the new global scenario, characterized by the sharp increase in energy and raw material prices and by the abrupt tightening of monetary policies, hinders the inflow of capital into the imaginative Nusantara project. “In recent months, the Indonesian government has held special meetings with potential high-profile investors, such as Taiwanese electronics giant Foxconn and South Korean steel giant Posco. However, time is scarce: plans envisage transferring the presidential palace to the new capital as early as 2024, but to date only the construction of some basic infrastructure has just begun.
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