After the Indonesian government confirmed plans to relocate the nation’s capital city to East Kalimantan, questions immediately began to emerge surrounding land ownership and the development of a 180,000ha compound in North Penajam Paser and Kutai Kartanegara regencies.

The government, which claims to own 90 per cent of the land to be developed, has promised to take an incremental approach in the massive undertaking, which President Joko “Jokowi” Widodo described as the first time since independence from colonialism that Indonesia got to decide on its own capital city.

“The 180,000ha land will be reserved. The first stage, as I mentioned, would be to develop 6,000ha, and in the next stage, we’ll aim for 40,000ha,” said National Development Planning Agency head Bambang Brodjonegoro in Bandung, West Java, on Tuesday as quoted by tribunnews.com.

Meanwhile, Agrarian and Spatial Planning Minister Sofyan Djalil assured that conservation forests would not be disturbed in the relocation, including the 60,000ha Bukit Soeharto forest park.

Although Jokowi has yet to reveal the specific location of the new capital, Environment and Forestry Minister Siti Nurbaya Bakar confirmed that the 180,000ha of land was located in a production forest area.

‘Still belongs to the government’

In a statement on Tuesday, she stressed that the forests’ permit holders should comply with the changes in regulation, so long as the takeover was in line with prevailing laws.

She added that the government had no obligation to compensate licence holders because they only had a permit to manage the area.

Agrarian and Spatial Planning Ministry’s director-general for spatial use control and land authorisation, Budi Situmorang, told the Jakarta Post on Wednesday that not all the 180,000ha would be developed.

However, the government would still take over industrial plantation forests, which comes under production forests, managed by state-owned enterprises (SOEs) and private entities around the area, if needed.

“Although the land is managed by SOEs and private firms, it still belongs to the government, so we can take it over from them,” he explained.

Among the holders is renowned timber company PT International Timber Corporation Indonesia (ITCI) owned by conglomerate Hashim Djojohadikusumo, the younger brother of former presidential candidate Prabowo Subianto.

The company, located in Sepaku district in North Penajam Paser, manages about 173,000ha of land in total, stretching from Kutai Kartanegara to Penajam Paser Utara and West Kutai. The company plants pine and acacia trees.

The remaining 10 per cent of the proposed new capital city’s land is not owned by the government and will be acquired using an existing procurement mechanism stipulated in Law No 2/2012 on land procurement for public interest, Budi said. He revealed that the area consisted mostly of villages and farms.

Real estate services and investment management company Colliers International Indonesia associate director Aldi Garibaldi told the Post that according to prevailing laws, the land would be bought fairly and at a price that is in accordance with its taxable value of property (NJOP).

“Should the landowners refuse to give up their land, the government can take it by force through court,” he said.

Despite the clear land acquisition process, some observers expressed concerns over the presence of land speculators, whose actions could cause land prices near the new capital to skyrocket. To prevent such a situation, Sofyan said the government would implement land-freezing measures around the new capital.

A land freeze is an act of legal restraint on the sale or transfer of land. This means that landowners are legally forbidden to sell their land or transfer it to someone else.

Another way to prevent speculators from flocking to the new capital is by turning the area into a special economic zone, Aldi said, because while such a zone may be managed by private entities, landowners could only sell their land and property to the government.

However, the presence of land speculators is actually a blessing in disguise, he argued.

“Their presence somewhat indicates the success of the government’s plan because it means that they are convinced the area will thrive from the development.” The Jakarta Post