April 18, 2016 / 12:03 PM / 2 years ago

Indonesia to suspend land reclamation in north Jakarta

JAKARTA (Reuters) - Indonesia’s government will temporarily halt all land reclamation in north Jakarta until regulatory and environmental conditions are met, a senior cabinet minister said on Monday.

A mega project involving 17 artificial islands off the northern coasts of the Indonesian capital has been dogged by bureaucratic wrangling, a bribery probe by the nation’s anti-corruption agency and opposition from environmentalists.

The central government and the Jakarta governor had previously clashed over who has the authority to issue permits for the project. Some fishermen also staged a protest over the weekend, claiming the project was reducing their catch.

Construction will now be suspended and a joint committee will be formed to look into the issues, Rizal Ramli, Indonesia’s coordinating minister for maritime affairs, told reporters.

“In analyzing, discussing and resolving this problem, we cannot be too emotional,” he said, flanked by Jakarta Governor Basuki Tjahaja Purnama and Indonesian Environment Minister Siti Nurbaya at a joint press conference.

The decision could delay Indonesian property developer PT Agung Podomoro Land’s multi-billion-dollar project called Pluit City, which was set to comprise apartments, offices and shopping malls on parts of the artificial land.

Earlier this month, Agung Podomoro executive Ariesman Widjaja was named a suspect by Indonesia’s Corruption Eradication Commision (KPK) for allegedly bribing a member of the Jakarta provincial assembly to influence the regulation for the land reclamation.

As of Monday’s close, Agung Podomoro shares were down around 13 percent since the KPK’s announcement.

Agung Podomoro is assessing the government’s decision to suspend the reclamation, Corporate Secretary Justini Omas said. “We will be cooperative and we will obey all the government’s policies when doing business, including reclamation,” Omas said.

A presidential spokesman declined to comment on the reclamation project, deferring questions to the ministries.

Reporting by Eveline Danubrata; Additional reporting by Bernadette Christina Munthe, Cindy Silviana and Jakarta bureau; Editing by Keith Weir and Tom Hogue

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