By Bernadette Christina
JAKARTA, Jan 17 (Reuters) - SoftBank has offered to invest
up to $40 billion in the new capital city Indonesia plans to
build on Borneo island, a minister said on Friday, though the
Japanese tech conglomerate said no figure had been suggested
yet.
Indonesian President Joko Widodo announced in August plans to
move the administrative capital to East Kalimantan province, on
Borneo, to relieve Jakarta from "a heavy burden" due to
overcrowding and pollution.
Indonesia has previously put the cost of moving the capital
at $33 billion, but Luhut Pandjaitan, Indonesia's coordinating
minister for maritime affairs and investment, said Softbank
Group Corp had offered up to $40 billion.
"So we'll negotiate over the structure (of the investment).
It could amount to $30-40 billion," he told reporters.
A spokeswoman for SoftBank said the group had not suggested
specific numbers, echoing comments by CEO and founder Masayoshi
Son last week.
"We're not dicussing the specific numbers yet, but a new
smart city, newest technology, clean city, with a lot of AI
(artifical intelligence), that's what I'm interested in
supporting,” Son said during a visit to Jakarta last week.
Pandjaitan said he would discuss the potential investment
further with Son further on Monday at the World Economic Forum
gathering in the Swiss resort of Davos and that President Joko
Widodo will likely decide on the agreement in February.
Widodo said on Thursday that a planned sovereign wealth fund
to finance infrastructure projects in Southeast Asia’s biggest
economy will raise at least $20 billion once established, though
Pandjaitan said it was still under discussion whether investment
would be channeled through the sovereign wealth fund.
Widodo discussed plans to establish the fund with Abu
Dhabi’s Crown Prince Sheikh Mohammed Bin Zayed al-Nahyan last
weekend during an official visit to the United Arab Emirates.
Sovereign wealth funds are typically used by countries to
direct funds from resource wealth such as oil, though Indonesia
also plans to invite foreign investment into its fund.
To help attract investment, Indonesia has asked Abu Dhabi’s
crown prince, former British Prime Minister Tony Blair and
Softbank's Son to advise on plans to move the capital, ministers
have said.
Planning minister Suharso Monoarfa said this week that
Softbank was interested in providing self-driving vehicles for
the capital.
In June, the self-driving car joint venture of SoftBank and
Toyota Motor said it plans to begin operating in
Southeast Asia this year.
(Additional reporting by Fransiska Nangoy and Sam Nussey in
Tokyo; Writing by Stanley Widianto; Editing by Ed Davies and
Simon Cameron-Moore)