Between Justice, Image Of PSN And PIK 2

Photo Illustration By Andry Winarko (VOI)

JAKARTA The government has approved the addition of 14 new projects to be included in the list of National Strategic Projects (PSN) in 2024. One of the projects set by President Joko Widodo (Jokowi) to be included in PSN is Pantai Indah Kapuk (PIK) 2 which is under the auspices of Agung Sedayu Group led by conglomerate Sugianto Kusuma alias Aguan.

The Coordinating Minister for Economic Affairs, Airlangga Hartarto, emphasized that 14 new PSN including PIK 2, the majority of the construction was built and financed by the private sector. According to him, collaboration between the government and the private sector in working on PSN will reduce the burden of using the APBN in infrastructure development.

"This new PSN will create jobs and do not require the state budget and this is approved by the president and there is a new PSN adjustment of the nomenclature and changes from the scope of the PSN itself," said Airlangga, Monday, April 18, 2024. Even without the disbursement of APBN funds, with the approval of the project as PSN by the president, the government will provide a number of facilities as stated in Government Regulation (PP) Number 42 of 2021 concerning Ease of National Strategic Projects.

In this regulation, the government provides convenience in terms of permits/non-permissions provided in the context of accelerating the planning process, preparation, transactions, construction to smooth operating control, including the financing mechanism for PSN.

PSN For PIK 2 Born From Its Developer Proposal

Spokesperson for the Coordinating Ministry for the Economy, Haryo Limanseto, in his written statement added that the inclusion of the development of the PIK area in PSN is a proposal for a business entity or developer. In his proposal, the developer guarantees that the development of PIK that is included in the PSN will not burden the state budget.

"Tourism development and the creative economy in the PIK 2 Tropical Coastland area are financed with non-APBN sources, as well as a commitment from the Procuring Business Entity to carry out development in stages," he said.

He explained that the proposal from the business entity or PIK developer was approved by the government because the location was considered strategic and was considered capable of creating new economic resources, becoming an attraction for investment and capable of absorbing employment opportunities.

"The Green Area and Eco-City Development Project is supported directly by the Minister of Tourism and Creative Economy taking into account the proposed location is very strategic because it is close to the Thousand Islands and Old Town National Tourism Strategic Areas (KSPN) - Sunda Kelapa, can open up business and investment opportunities, as well as create jobs for people in Banten Province and its surroundings," explained Haryo.

The development of a green-based area with an area of approximately 1,756 Ha is also designed to accommodate the Mangrove Tourism Area, which is a natural coastal security mechanism. This project with an investment value of around Rp. 65 trillion is expected to absorb around 6,235 direct workers and 13,550 workers as a multiplier effect.

According to Haryo, the entire new PSN approved, all the financing comes from private investors and does not need APBN support and is aimed at supporting policies to accelerate downstreaming, support connectivity, support national and regional economic development and equity, create jobs, and gain support from sectoral ministries.

In addition, every proposal submitted by PSN must be supported by a Letter of Commitment of the Minister/Head of Institutions, Funding Plans, Study Results, and Action Plans which will then be evaluated with a number of basic criteria, strategic criteria, and operational criteria.

The results of this evaluation will then become the meeting material for the Steering Committee for the Acceleration of Priority Infrastructure Provision (KPPIP) before being submitted further to the president. This makes all Ministries/Institutions, Regional Governments, as well as BUMN/BUMD possible to propose a new PSN proposal and shows that the PSN status has received a complete study of all aspects of all stakeholders," concluded Haryo.

Hope for PSN PIK 2

Minister of Tourism and Creative Economy, Sandiaga Salahudin Uno said, the development of PIK 2 Tropical Concept was chosen to be PSN because it was considered to be a strategic destination in attracting tourist visits and creating new jobs. According to him, in the presentation delivered by PIK 2 team, the construction of the Tropical Concept PIK is quite massive. He revealed, there will be more than 1,000 hectares of land to be developed, with a target of 20 million tourist visits and 10 million new jobs.

"We convey that this must be prioritized as a strategic project. PIK locations are very connected to Soekarno-Hatta Airport, and also offer natural tourism attractions such as mangroves, offshore packaged with ecotourism, to artificial and culinary tourist destinations," explained Sandiaga.

Through IDX's disclosure of information, last Saturday, April 27, 2024, Aguan emphasized that the development of PIK will fully use private costs, not use the APBN. The provisional calculation of total investment can reach around IDR 40 trillion which will be built starting in 2024 and is targeted for completion by 2060.

The PIK 2 development project is expected to use 1,755 hectares of land. Some of the projects to be developed are Eco-Park, Safari Tourism, Golf Course, Mangrove Tourism, to International Circuit.

Aguan explained, as a developer who has more than 50 years of experience, his party continues to strive to innovate and launch products that are in accordance with market demand which will be transferred as marketing sales targets.

"PANI will hold a commitment to all stakeholders and implement a business strategy that has been designed in such a way to get to medium and long-term goals, at least five years from now," he said.

The entry of PIK in PSN is considered a return to Investment in IKN

Meanwhile, Trisakti University Urban Observer Nirwono Yoga revealed that PIK should not be designated as PSN and should be handed over to private developers and allowed to develop according to market needs.

This is because PIK can develop independently without having to become PSN. Therefore, he suspects that there is another purpose for the government to designate PIK as PSN. "It could be a form of mutual support for PIK developers in IKN, then the government supports it back to make it PSN," he added.

Head of the Center of Industry, Trade, and Investment Indef, Andry Satrio Nugroho also admitted that he was confused by the appointment of PIK as PSN. The reason is, so far PIK has been developed quite well where the surrounding community has also felt the benefits.

He emphasized that the stipulation of PIK as PSN should not actually make the public see it as a roll exchange where the government repays the support provided by Aguan at IKN. In establishing PSN, Andry continued, the government should consider whether a project can improve the community's economy and reduce the gap in infrastructure between regions so that it needs to be established as a PSN.

Director of Public Policy Celios, Media Wahyudi Askar, also assessed that the entry of PIK in PSN was thick with the nuance of President Jokowi's return to investors who had been supporting the government, including the development of IKN. He said that Jokowi's decision to set PIK as PSN would make Aguan get direct benefits, starting from increasing stocks to licensing. He revealed that many PSN did not go through a mature policy analysis and the marginal cost was greater than the marginal benefits.

Although PSN's main goal is to create economic equity and reduce inequality, in the context of PSN policy it is a top priority compared to other policy choices.

Similar things happen to PIK where the area is already held by tycoons and large companies and is already very developed. Economic oligarchies and project overthrows like this are very dangerous because they are prone to maladministration and corruption. Although this project is not directly financed by the state budget, the appointment of projects for the benefit of certain groups can create distortions in the market and hinder healthy competition," Wahyu added.

He stated, when the government provides support or subsidies to private areas that are already developing, there is a risk that this support will strengthen existing economic inequality. In a larger context, the appointment of PIK as PSN is actually unfair, has grown rapidly, supported by tycoons and large companies.

"PSN should focus on development that requires special intervention, such as controlling fishery resources in eastern Indonesia," said Wahyu.

The emergence of allegations of retaliation or exchange of fees for the entry of PIK projects in PSN by some economic observers is understandable when you look at Aguan's track record. The boss of Agung Sedayu Group was involved in the succession of infrastructure project development in the era of President Jokowi's leadership. Finally, Aguan was involved in the construction of Singkawang Airport which was inaugurated by Jokowi on Wednesday, March 20, 2024.

Aguan is also known to be in charge of the Nusantara Consortium in the construction of one of the projects at IKN. For information, the consortium led by Aguan invested IDR 20 trillion to build a mixed used development project in the form of malls, hotels and office areas in IKN.

Not only that, the Nusantara Consortium has again increased the portion of investment in IKN to work on the botanical garden project. If the investment plan is realized, the total investment disbursed by Aguan et al in IKN will reportedly reach Rp40 trillion.