Deputy for Funding and Investment at the Archipelago Capital Authority (OIKN) Agung Wicaksono emphasized that despite Anies’ statement regarding the development of IKN, investor interest in investing capital in this mega project is still very high.
“From what I see so far, (investor) interest continues to be high how come. Presidential candidates say that’s what you’re welcome to do. “It’s called a democracy party, go ahead,” said Agung in Jakarta at the weekend.
This investor confidence was also conveyed by the President Director of PT Pakuwon Jati, Alexander Stefanus Ridwan Suhendra. As a domestic investor, he is quite confident about the future of this new capital.
“I don’t see any presidential (candidate) refusing. Let’s see whether the future is good or not? “If I look at the future, it’s good,” said Ridwan.
This belief, he said, was also based on the existence of the IKN Law which made the construction difficult to cancel.
“The law already exists. So I believe that there is a good future there. So I just thought about that, didn’t need to think about anything else. “I don’t think about politics, what’s important is whether the future is good or not,” he added.
Hundreds of LOIs have been submitted
Furthermore, Agung explained that to date there have been at least 328 letter of interest (LOI). Of this amount, as much as 45 percent comes from foreign investors who are currently still partnering with domestic investors.
The foreign investors, said Agung, mostly came from Singapore, Japan, China and Malaysia. According to Agung, a number of investors from South Korea, the United States and several European countries have also shown their interest
According to the plan, the groundbreaking for the third phase of IKN will take place on December 20-21 with an investment value of IDR 10 trillion. In this third stage, the focus of development is reforestation of the national axis area, property, based transportation, electricity and hospitals.
“So today there is a commitment of IDR 36 trillion for IKN development which comes from non-APBN. “Meanwhile, what comes from the state budget in 2022 will be IDR 5 trillion, and in 2023 from the APBN it will reach IDR 29 trillion, so if you calculate it it will be around IDR 35 trillion,” he explained.
The composition of IKN development financing like this, said Agung, proves that IKN was built not only from the state budget, but also from the participation of the community and the private sector, especially domestic investors who were pioneer investors.
Still Investors Wait and See
Even though the IKN Authority claims that investor interest in IKN development is still high, CELIOS (Center of Economic and Law Studies) Economist Bhima Yudhistira believes that these investors are still at the stage of wait and see.
According to him, even though hundreds of LOIs are entered, the investment will not necessarily be realized because the political year is a strong consideration for investors.
In terms of legal certainty, he said, the IKN Law still has many loopholes that could cause development delays.
“If we slowly read the IKN Law, there is no specific provision in what year the IKN will be completed, so even if it is later it is not canceled but for example the construction is postponed. Which was horizon“For example, it will take 20 years for it to be completed, but it does not rule out the possibility, for example, that support from the APBN is very small so that completion, for example, will take 100 years and that does not violate the IKN Law,” he said.
“So the IKN Law still has many loopholes that can be exploited to delay IKN development,” added Bhima.
Bhima also believes that the cancellation of the IKN Law is very possible. Bhima gave the example that the president and vice president-elect could issue a regulation in lieu of law (Perpu) to cancel the construction of this mega project.
“It can (cancel). He annulled that law existing with conditions of urgency, which can vary. Now, if you make an IKN Perppu then the reason is because it requires large costs to mitigate climate change, is that okay? Can. If economic conditions worsen, for example, is it okay to have a larger fiscal cushion? Yes,” he explained.
Because the IKN Law is not final, according to Bhima, the risk of investing in IKN development in the eyes of investors is very high.
“Pak Jokowi also demonstrated this by making the Job Creation Perppu, the Perppu during COVID-19 for example. Two Perppu were born in the Jokowi era. So that means why can’t future presidents do the same thing?” he explained.
Regardless of who is elected in 2024, there are other factors that will make investors reconsider investing in IKN, namely the development vision and mission of the three presidential and vice presidential candidates. Bhima’s vision and mission for prospective leaders is still Java-centric. Most of the development carried out by Jokowi, he said, was still centered on the island of Java.
“So investors will rationally compare, what is the future direction of Indonesia’s development? If outside Java the focus is on downstream industry, it will actually be more interesting than IKN development. “Meanwhile, those who are still in Java will remain, most of the time there will be a shift from West Java to Central Java,” he said.
“Apart from political risks, if you look at the economic calculations, return on assets, return on investment “There are still many doubts from the investor side,” he concluded. (gi/ab)
