Indonesia Government Escalates Hotel Sultan Dispute

Royalty Payment Demand

The Indonesian government has intensified its legal battle against PT Indobuildco, the company operating Hotel Sultan in Jakarta's Gelora Bung Karno (GBK) area, by demanding a $45.3 million royalty payment. This development comes after the expiration of the company's Hak Guna Bangunan (HGB) lease in 2023. Minister of Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN) Nusron Wahid confirmed that the HGB, held by PT Indobuildco, owned by Pontjo Sutowo, has expired, rendering the company's continued operation illegal.

Legal Basis and Implications

According to Indonesian property law, when an HGB expires, the management of the area should revert to the holder of the Hak Pengelolaan Lahan (HPL), which is the Ministry of State Secretariat (Kemensetneg). Nusron Wahid emphasized that since the HGB was not renewed, PT Indobuildco's continued occupancy is unauthorized. The government's demand for $45.3 million in royalties reflects the revenue that should have been paid during the period of unauthorized operation.

Government's Legal Strategy

The government's decision to pursue legal action and demand significant royalty payments indicates a firm stance on resolving long-standing disputes involving state assets. This case highlights the government's commitment to protecting its interests and ensuring compliance with land use regulations. The outcome of this case could set a precedent for similar disputes involving state land and expired HGBs.