JAKARTA: SoftBank Group Corp founder Masayoshi Son will no longer be an investor in Indonesia’s US$34bil (RM142.5bil) project to build the new capital in Borneo as the country turns its focus on Middle Eastern and Chinese investors.

       “There’s no more story on Masayoshi, he’s out,” according to Coordinating Minister for Investment and Maritime Affairs Luhut Panjaitan in an interview.

       He didn’t say why talks have ended. A Tokyo-based spokesperson at SoftBank Group was not available to comment.

       Back in January 2020, Panjaitan named Son as a member of the steering committee overseeing the city’s construction, along with Abu Dhabi Crown Prince Mohammed Bin Zayed Al Nahyan and former British Prime Minister Tony Blair.

       It wouldn’t be the first time Son has backpedalled from costly government-led initiatives. SoftBank and Saudi Arabia signed a memorandum of understanding in 2018 for a US$200bil (RM838bil) solar power development – far larger than any comparable project at the time – that ultimately stalled.

       The country that’s home to the world’s largest archipelago is building the new city from scratch on a piece of land in East Kalimantan province, some 1,400km northeast of the current capital Jakarta, in Java.

       The government has received commitment of around US$20bil (RM84bil) from Abu Dhabi to help fund initial infrastructure developments and plans to offer more projects to other investors in the near future, Panjaitan said.

       Overseas investors, including from Saudi Arabia and one from Abu Dhabi that’s partnering with Chinese funds, have expressed interest, and they will invest via Indonesia Investment Authority, the state wealth fund known as INA, according to Panjaitan.

       The plan is to offer projects by blocks, such as education block, hospital block, and for other non-government buildings. About five to six state-owned companies, such as PP Persero and PT Total Bangun Persada, may take part in the constructions, he said.

       As much as US$5bil (RM21bil) of state budget funds will be used to finance the development of mostly government buildings, said Panjaitan.

       Finance Minister Sri Mulyani Indrawati said in January that the government’s portion of funding for the new capital will come from either the economic recovery fund, a stimulus spending aimed at rebuilding mostly the sectors hit by the pandemic, or the budget allocated under the public works ministry.

       President Joko Widodo wants to move the administration before the end of his final term in 2024. In January, parliament passed the law governing the new capital, giving the legal basis for the project to proceed. — Bloomberg