by Dames Alexander Sinaga

JAKARTA, March 18 (Xinhua) -- Indonesia's commitment to building a new capital with a concept of a green and smart global city on the island of Borneo has drawn global attention, as foreign investors from a number of countries have expressed interest to participate in the multi-billion-dollar mega project.

On Thursday, Indonesian President Joko Widodo visited neighboring country Singapore and met with Singaporean Prime Minister Lee Hsien Loong for an annual leaders' retreat. During his visit, the president saw 20 companies from the island nation showing their interest in investing in Nusantara.

The estimated cost of all projects, as already announced by the government, requires funds of at least 466 trillion Indonesian rupiahs (about 32 billion U.S. dollars). The state only covers about one-fifth of the investment cost, while around 80 percent of the total investment value is sought from public-private partnerships or investments.

Indonesia is currently carrying out the first phase of the project development with funds provided by the state. The first stage started last year after being delayed due to the COVID-19 pandemic hitting the country and it is scheduled to be completed in 2024.

Announced in 2019, Nusantara, which is an Indonesian term for "archipelago", is President Widodo's flagship project. He stressed that the new capital will create a new epicenter of economic development outside of the island of Java.

Widodo is expecting the celebration of the year of independence to be held in Nusantara in 2024. In that year, Indonesia will also hold a presidential race as Widodo ends his second and final five-year term in office.

The government has recently launched an incentives program to attract investors in developments of Nusantara. According to head of the Nusantara Authority Bambang Susantono, those investing at least 10 billion rupiahs (about 647,000 U.S. dollars) in some sectors will be free from corporate tax for 10 up to 30 years.

Infrastructure and public services are sectors that will be given the longest tax holiday, which is up until 2035.

Meanwhile, foreign businesses relocating their head offices to Nusantara and financial centers in that area will be given tax cuts. Moreover, the government will also give an incentive of 95-year land-use permits for investors.

The regulation, which was signed by Widodo last week, grants land-use permits to investors for 95 years in one cycle and can be extended in the second cycle for another 95 years. In total, the investors can hold the permits for up to 190 years.

Susantono also said that the government will officially declare Nusantara as the new capital next year.