Capital Asset Solution: Privately-Operated and Concession Termination

The government’s plan to relocate the capital from Jakarta to East Kalimantan is still focusing on the utilization of assets in both areas. The government is offering some asset utilization cooperation schemes to the private sectors for Jakarta-based assets. The first scheme is the build-operate-transfer or build-transfer-operate model. The model allows the private sectors to demolish the existing constructions and replace it with their new buildings in the government’s lands. On the other hand, the second scheme, the asset utilization cooperation scheme (KSP), prohibits interested parties even to alter the government’s building. They can only use the constructions for office, commercial, or other activities.

However, a big part of the designated area for new capital is under the ownership of Sukanto Tanoto through PT ITCI Hutani Manunggal. The land owned by Sukanto is around 6,000 hectares and intended as an industrial plantation forest (HTI). The company has been operating for about 20 years in the area and poses as the strategic supplier-partner with a significant contribution for PT Riau Andalan Pulp and Paper (RAPP).