Indonesia’s plan to build a new capital in East Kalimantan is facing renewed scrutiny after the Constitutional Court scrapped a regulation granting investors land rights of up to 190 years – a move welcomed by indigenous groups but seen by developers as a potential deterrent to investment.
The decision underscores the mounting challenges facing the 466 trillion rupiah (US$28 billion) Nusantara project, which has attracted lukewarm investor interest since former president Joko Widodo launched it as a smart, green administrative city meant to replace traffic-choked, flood-prone Jakarta as the nation’s seat of government.
The ruling nullified a 2024 Widodo-era regulation that had offered investors exceptionally long tenures: up to 190 years for rights to cultivate land and 160 years for the rights to build and use plots within the planned capital.
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The Court found such privileges unconstitutional and ordered that Nusantara must follow the national framework, which limits cultivation rights to 95 years – comprising a 35-year grant, a 25-year extension and a 35-year renewal – and caps building and usage rights at 80 years.
“This special regulation… regarding the period of land rights is only applicable in Nusantara. [It is] an effort to attract investors… the Court can understand the government’s efforts, however, special regulations must not conflict with the principles stipulated in the Constitution,” judge Guntur Hamzah said on November 13.
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The petition to revoke the land rights was brought to the court by Stepanus Febyan Babaro, a representative of the Dayak indigenous community of East Kalimantan, and Ronggo Warsito, a resident who was only given 10 years of right to use a parcel of land, much shorter than the 80 years granted for investors in Nusantara.