There will be a State-Owned Enterprise under the New Capital City (IKN) Authority named Badan Usaha Milik Otorita (BUMO). BUMO will deal directly with the private sector, especially investors who want to inject funds into the IKN. 

The entity was also established to accelerate the land acquisition process as it directly involves the investors, confirmed by the Minister of Public Works and Housing Basuki Hadimuljono. 

Basuki argued the establishment of BUMO is to address the problem of investment in the IKN, which is the land acquisition mechanism. ‘’What if, for example, someone wants to build a five-hectare hospital, how will they purchase the land?”  

IDR 466 trillion from the state budget, no private investors  commitments

“There has been no [investment] realization yet. Currently we are relying on the state budget for all activities even though we have prepared the Regional Spatial Plan (RDTR),’’ Basuki said.

Although no investors have made investment commitments, the government still assures investors the development of ‘future city’ will continue. 

It is confirmed that the government will allocate 30 percent of the total required budget which amounts to IDR 466 trillion from the state budget, while the rest will be sourced from Public-Private partnership (KPBU) and direct investment.

Attracting investors to invest in IKN is basically a wait-and-see, according to the ministry’s spokesperson Endra Atmawidjaja. He emphasized that many investors have shown interest, but they need to see what the government is doing, and usually, the government provides subsidies from the state budget first. 

“We will see their interest and then we will see the follow-up. There is a process from the letter of interest to the actual investment. But, we are optimistic that investments in IKN will be realized,” Endra added. 

100 letters of intent from potential investors

As of January 30, 2023, the IKN Authority had received 100 letters of intent from potential investors with as many as 90 letters being followed up. The government will also draft a regulation that will provide ease-of-access for investors looking to make Investments in IKN. 

The draft regulation contains several points such as tax holidays for investment and office relocation, as well as tax deductions for selected activities. Additionally, the regulation will also include special customs and excise treatment, special tax treatment for financial centers, and value-added tax exemptions.

According to Basuki, President Jokowi will soon visit the New Capital to convince investors with the detailed spatial plan or RDTR, areas that could be potentially developed by investors.