The Head of the Nusantara Capital Authority (OIKN), Basuki Hadimuljono, has confidently asserted that investors remain unfazed by the Constitutional Court’s (MK) recent decision to annul certain land use rights, including the contentious 190-year Hak Guna Usaha (HGU), within the Nusantara Capital City (IKN) project.
During a pivotal meeting with DPR Commission II at the Parliament Complex in Senayan, Jakarta, on Tuesday, November 25, Basuki stated, “God willing and thank God, we have received no complaints from investors so far.” This reassurance comes amid concerns regarding the impact of the MK’s ruling on the ambitious capital city development.
Basuki further clarified that the Constitutional Court’s Decision Number 185/PUU-XXII/2024 does not revoke land rights for investors outright but rather reconfigures the mechanism by which these rights are granted. He highlighted that investors are currently seeking certainty regarding the sustained momentum and future trajectory of the IKN development. “This includes anticipating regulations such as Presidential Regulation 79 of 2025, which investors are keenly awaiting,” he added, underscoring the need for clear legal frameworks.
Addressing specific changes, Basuki explained that under Law Number 21 of 2023, the Hak Guna Bangunan (HGB), or Right to Build, was previously offered in a single 80-year cycle. However, this mechanism has now been revised to an initial 30-year grant, followed by a 20-year extension, and a subsequent 30-year renewal, streamlining the tenure process.
This development follows earlier proactive measures by the government, which had been strategizing to prevent investor withdrawal from the IKN Nusantara project after the MK initially annulled the lengthy 190-year HGU. These strategies were designed to mitigate potential risks and maintain robust investor interest.
Coordinating Minister for Economic Affairs, Airlangga Hartarto, had previously affirmed the government’s commitment to refining the legal basis to sustain investor confidence. “Yes, the legal groundwork will certainly be re-arranged. That is a commitment from the President himself,” Airlangga stated after attending Bloomberg Businessweek Indonesia in Jakarta on Thursday, November 20, emphasizing high-level endorsement for the adjustments.
Airlangga elaborated that President Joko Widodo has specifically mandated that the IKN, currently under construction, evolve into the nation’s Political Capital. He confirmed that the ongoing development efforts in IKN are now precisely aligned with this strategic vision. “Currently, the parliamentary complex and the judicial system are under construction. Of course, the government will find solutions to any challenges,” Airlangga assured, highlighting progress and government resolve.
The Constitutional Court’s decision to annul the 190-year HGU had previously sparked significant apprehension, particularly regarding the potential for various risks, most notably a downturn in investor interest. This concern necessitated a swift and clear response from the authorities to stabilize the investment climate.
Despite the significant reduction in HGU tenure, the Constitutional Court has stipulated that the granting of land rights in IKN must now adhere to the nationally recognized general provisions. Specifically, the Hak Guna Usaha (HGU) will be granted for a maximum period of 35 years, with the possibility of a 25-year extension and a further 35-year renewal. Similarly, the Hak Guna Bangunan (HGB) will be issued for a maximum of 30 years, extendable by 20 years, and renewable for another 30 years. For the Hak Pakai (Right to Use), the maximum term is 30 years, extendable by 20 years, and renewable for 30 years, ensuring a standardized and transparent framework for land tenure in the new capital.
Summary
The Head of the Nusantara Capital Authority (OIKN), Basuki Hadimuljono, confidently stated that investors have not lodged complaints regarding the Constitutional Court’s decision to annul certain land use rights, including the 190-year HGU, in IKN. He clarified that the ruling reconfigures the mechanism for granting land rights rather than revoking them outright, noting investors are primarily seeking certainty on the project’s momentum and future regulations. The government had previously taken proactive measures to prevent investor withdrawal following the initial annulment.
Coordinating Minister Airlangga Hartarto affirmed the government’s commitment, mandated by President Joko Widodo, to refine the legal basis to sustain investor confidence in IKN’s development as the nation’s Political Capital. The Constitutional Court’s decision now standardizes land tenure, stipulating Hak Guna Usaha (HGU) for a maximum of 35 years with extensions and renewals, and Hak Guna Bangunan (HGB) for a maximum of 30 years with extensions and renewals, ensuring a clear and consistent framework.
