More Indonesian businesses are announcing initiatives to invest in the country’s ambitious multibillion-dollar capital relocation project as the start of next year’s scheduled move gets closer, even while interest from foreign companies remains tepid over concerns a new president to be elected in February could curtail the plan.

Indonesian President Joko “Jokowi” Widodo, who must step down after the presidential election, has preparations in place for some government functions to be transferred to the new capital, Nusantara, next August.

The country is still developing basic infrastructure in the remote site on Borneo and foreign investors are cautious, but Indonesian companies — some state-owned — are expressing more enthusiasm as they see business opportunities.

In early August, Salyadi Saputra, the director of strategy, portfolio and business development for the state oil and gas giant Pertamina, said the company sees opportunities in Nusantara, officially known as the Capital City of Nusantara (Ibu Kota Nusantara).

“The integrated area development in IKN using the smart city forest concept aligns with Pertamina’s commitment to conduct business with the Environmental, Social & Governance (ESG) implementation across all business lines and operations,” Salyadi said in a statement.

Envisioned as a “green and smart global city,” the megaproject is central to Widodo’s vision of pushing Indonesia into the ranks of developed nations and fulfilling the country’s pledge of net-zero carbon emissions by 2060.

Pertamina plans to develop a hospital and clinics through a subsidiary, Pertamina Bina Medika-IHC, with the hospital to be built on 50 hectares of land. The group will also start operating a hotel resort next year through the subsidiary Patra Jasa and open a vocational university through Universitas Pertamina. 

Pertamina’s airline unit, Pelita Air Service, will offer a flight connection hub in Balikpapan, the closest city to Nusantara, commencing by the end of this year, the company said. In March, it began offering flights connecting Jakarta and Balikpapan.

Meanwhile, the private Ciputra Group, one of Indonesia’s largest property developers, in July said it will build an integrated area consisting of housing, hotels, a botanical garden and golf courses. Another developer, publicly traded Pakuwon Jati, announced in July that it will build a shopping mall to be integrated with apartments and hotels in Nusantara.

“We have built properties in many big cities in Indonesia,” Pakuwon Jati President Director Alexander Stefanus Ridwan Suhendra said in an Instagram post. “Now is the time to start development at IKN.”

In the first round of relocation moves, the government plans to transfer 1,800 civil servants to Nusantara beginning next July.

To capture that demand, hospital operator Medikaloka Hermina has committed to building a 100-bed facility in Nusantara that “will be finalized in 2024,” the company’s president director, Hasmoro, said during an investor event in October last year. Meanwhile, state-owned courier and logistics company Pos Indonesia said in July that it plans to build a courier and logistics hub in Nusantara.

The investment interest by domestic companies comes as Widodo works to reassure investors that the project is on track.

After his reelection in 2019, Widodo announced plans to move the capital, citing overcrowding and pollution in Jakarta, as well as the need for a growth engine in the eastern half of the far-flung island nation.

But foreign investors are mostly hesitant amid concerns that Indonesia’s next president might scrap the project.

As of July, the government said Indonesia had received about 300 letters of intent from companies, of which about 30 are taking steps toward investing. Foreign companies from China, South Korea, Singapore and Japan have expressed interest in taking part. So far, though, no concrete big pledges have materialized.

“Japanese companies are still taking a wait-and-see position until the next presidential election,” a Japanese government official said, although “some companies are showing interest to join the project.”

American Chamber of Commerce in Indonesia members had a meeting with Bambang Susantono, chairman of the Nusantara National Capital Authority in May. According to a statement after the meeting, participants expressed curiosity about the financial standing of the project as well as the impact of the year-ahead political calendar on its progress.

Of the 466 trillion rupiah ($30 billion) in expected construction costs, plans call for 80% to be funded by outside sources such as the private sector and rich countries’ governments.

To protect his legacy project, Widodo has tried to make sure through the establishment of a legal framework that the project will go ahead even after he leaves office. Still, wariness remains. One Japanese expert with high level contacts in Indonesia said that even if the next president carries on with the relocation, he might change the budget allotment or even minimize the project.

Meanwhile, Piter Abdullah, executive director at the Jakarta-based Segara Research Institute, said such large-scale projects are “promising” for companies and there should be interest regardless of whether they are domestic or foreign.

“But they have to wait first,” he told Nikkei Asia, “to make sure that this project will be sustain[ed] after [the] election.”