The New State

Capital Law :
A Glimpse of
What to Expect

KWH
March 2, 2022
OVERVIEW OF
THE NEW
STATE
CAPITAL LAW
● Law No. 3 of 2022
● Special Capital City of
Nusantara (Daerah Khusus
Ibukota Nusantara / IKN)
● Jakarta  IKN, through
Presidential Decree
 Why the change?
Economic
Discrepancy
Environmental
Decline
Centralized
Economic
Activities
Decline in
Quality of Life
Uncontrolled and
fast population
growth
WHERE?
Location
Part of Kutai Kartanegara
Regency and Panajam Paser
Utara Regency

Area
Central Area = 56.180 ha
Development Area = 199.962 ha
+ 100 people / ha.
Construction and development
in phases according to IKN
Master Plan (Rencana Induk IKN)
 DEVELOPMENT CONCEPT

Sponge Smart
City City

Forest Superhub
Locally Integrated
City Globally Connected
Universally Inspired
 IKN Authority
Function National Election Only
Main program executant
No Regional People’s
Governor of IKN
Representative Assembly
(DPRD)

Ministry Level Further Provisions

Nominated, appointed
On structures and
and dismissed by the
governance of IKN
President (consulting
through Presidential
with DPR
Regulation

Term of Office Operate

5 years or less, upon Starting on 2022 (latest)
early dismissal
 Special Authorities of IKN Authority

Investment Business Special Recommenda Charge

tion of Fiscal special tax
Business Facilities Facilities to
and/or Non- and/or special
License Certain Fiscal levy in IKN
Parties Insentives
 Land Rights of IKN Area

METHOD TO OBTAIN LAND SPECIAL

Release of Forest Area & Land AUTHORITY
Enter into Land Right Agreement
Acquisition
(Perjanjian Hak atas Tanah)
Guarantee renewal / extension of Land
IKN AUTHORITY’S LAND Right Agreement in 5 years
Right of Use and/or Right to Manage ]] Approving any transfer of land rights
RIGHT
over Land

IKN AUTHORITY’S SPECIAL REQUIREMENTS

PREROGATIVE RIGHTS Buyer in the transfer of Land Right
To buy land in IKN Agreement through SPA is limited to
only the Indonesian Government
 STATE-OWNED ASSETS LEFT BEHIND

TRANSFER OF TRANSFER UTILIZATION

MANAGEMEN Unused State-Owned
Appointing BUMN / tender
T RIGHT Approval Authority: Assets
< IDR 100 B  Ministry Without change of
to Ministry of ownership
> IDR 100 B  President
Finance Appointing BUMN /
Tender
 TIMELINE
2022-2024
• President & Vice President 2025-2029
• Institutions supporting the • Primary & secondary
Presidential duty transportation system
Phase 1
• Military & Police Force construction
• Official’s Housings, Toll • Economic cluster
gates & basic facilities Phase 2 facilities construction
construction start • Investors,
scholars/researchers,
college students.
2023-2034 Phase 3
• Infrastructure
construction start Phase 4
2025-2039
• Further addition /
2040-2045 development from
Phase 5 Phase 3
• Development of
VENUS
Econoic Cluster
(Industrial District)
• Stable growth

Central Government will decide which Institutions are left behind

Embassy & International Organization Representative
Offices
Mandatory
Vienna Convention 1961 Projected
Embassy must be located in
the State Capital City Timeline
In 10 years as of the change
of The State Capital City

Diplomatic
Compound Non Material
Provided by the Insentive
Government In return of the land provided
by the Government
ISSUE
What is left behind? Impact on Policy
Majority of the Potentially tight
Government
Institution will
monetary policy
move

Operation Ease in
during the Investment
Move?
Unstable governane
What and which one in IKN (depending on
is left behind? the PIC)
IKN AUTHORITY LOCAL
OPPOSITION
Who? Petition
A few names come up Petition to cancel the
No definite candidate yet program
>31.000 people as of
February 2022

Unstable
Government
Potentially unstable and
constantly changing policy
Depending on the PIC
No DPRD
No one to represent the
voice of the people
THANK YOU
