McKinsey tapped to help design new capital city of Indonesia

05 March 2020 Consultancy.asia

Consulting and engineering firms McKinsey & Company, AECOM and Nikken Sekkei have been selected to help develop Indonesia’s new capital city in East Kalimantan.

Global management consulting king McKinsey & Company is on a roll in Indonesia, most recently tapped alongside Boston Consulting Group to help overhaul more than a hundred state-owned enterprises with combined revenues of above $170 billion. That assignment followed on from a three-month contract last year to assess the proposed relocation of the capital from Jakarta to the island of Borneo.

Now, McKinsey will also help design the new city, according to reports. Selected alongside engineering giant AECOM and Japanese architectural and planning firm Nikken Sekkei, the American consultancy will assist Indonesia’s National Development Planning Agency to draw up the masterplan for the modern capital – which it’s intended will feature the latest in urban design and ‘smart-city’ technology.

The new contracts were revealed by Maritime Affairs and Investment Minister Luhut Binsar Pandjaitan following a meeting between President Widodo and former British Prime Minister Tony Blair together with SoftBank’s Masayoshi Son. The high-profile pair form part of a special advisory committee for the relocation project, alongside Abu Dhabi crown prince Mohammad bin Zayed al Nahyan.

Indonesia new capital

“[The consulting firms] have experience designing large cities,” Luhut told the local media, which further reported that Blair expressed his enthusiasm for the environmentally-minded approach to the project and its economic potential. “It’s going to be a place where people want to come, live and to work, [and] also a capital city that is able to offer a whole new dimension to the Indonesian economy,” he stated.

“The President’s vision for this capital city is one in which the city itself is going to be attractive,” continued Blair, who was appointed alongside the fellow committee members to sure up investor confidence. “I think the project is enormously exciting. It’s going to be a project that doesn’t just mean creating a new capital city, but a capital city that is going to be very special in the way that it’s developed.”  

According to earlier reports, one fifth of the ~$34 billion development – expected to start construction next year with relocation to begin in 2024 – will be financed by the state, with international investors including Softbank to float the remainder. Investment management giant BlackRock has apparently expressed interest in joining, along with the U.S. International Development Finance Corporation.