(Reuters) – Indonesian President Joko Widodo on Wednesday made a renewed pitch for his country’s new $32-billion capital city to investors in Singapore, the latest attempt to lure funds into a project that has so far failed to attract big-ticket investment.
Speaking at a sustainability-focused conference hosted by Singapore’s Temasek Holdings, the president offered 300 development packages worth $2.6 billion to investors interested in building the city, Nusantara, amid the jungles of Borneo Island, and promised high returns.
“Everything will be fine, no need to worry, your investment in Indonesia will continue to be safe and (there will be) continuity in the development of Nusantara capital city,” said Jokowi, as he is popularly known, while presenting images of the planned futuristic city.
So far, not a single investment deal has been signed as investors worry about the project’s feasibility and future given an expected transition of power in the next year’s general and presidential elections.
Nusantara is set to become the capital of Southeast Asia’s biggest economy from next year, replacing the congested yet beating commercial and political heart of the country, Jakarta. Jokowi, who made infrastructure development a priority during his two terms in office, considers the project part of his legacy as he prepares to leave office next year after a decade in power.
He has said he expects the majority of the city to be funded by the private sector and the government in March introduced a set of incentives.
Bambang Susantono, chair of the Nusantara authority, told the same forum that funding the project will be profitable, citing a 11% to 13% potential return on investing in the city’s power system.
Investors from South Korea, Japan, China, Germany and the United Arab Emirates are conducting due diligence and about 100 more visited Nusantara last week, he said, without elaborating.
Some 16,000 civil servants, military and police officers are expected to move to Nusantara by next year. Construction of government buildings is underway but only temporary settlements for workers were seen at the site as of March.
($1 = 14,863.0000 rupiah)
(Reporting by Stefanno Sulaiman; Editing by Gayatri Suroyo and Kanupriya Kapoor)
