Indonesia to Invest 50 Trillion Won in Smart City Construction
LG CNS Participates in Basic Design... Group-Level Business Involvement Expected
President Kim Young-seop (second from left), CEO of LG CNS, and Bambang Susantono (third from left), Minister of the Indonesian New Capital Authority, pose for a commemorative photo after signing an MOU for cooperation on the design of the Nusantara Smart City, the new administrative capital, in Bali, Indonesia, on the 14th. (Photo by LG CNS)
[Asia Economy Reporter Seungjin Lee] LG CNS is participating in the design of Indonesia's new administrative capital, Nusantara Smart City.
LG CNS announced on the 15th that it signed a Memorandum of Understanding (MOU) for smart city cooperation with Indonesia's New Capital Authority. The signing ceremony held in Bali was attended by Kim Young-seop, CEO of LG CNS, and Bambang Susantono, Minister of the New Capital Authority, among others.
The New Capital Authority is a government agency overseeing the Nusantara Smart City project, Indonesia's new administrative capital. Last month, LG CNS became the first domestic company to sign a written MOU with the New Capital Authority.
LG CNS Participates in Indonesia Smart City Design... Anticipates Joint Business Participation with LG Group
Both parties formalized their cooperation during the global business forum 'B20 Summit' held in Indonesia. The B20 Summit is a business meeting held prior to the G20 (Group of 20 major economies) summit.
Through this agreement, LG CNS will participate in the 'smart service concept design' of Nusantara. The New Capital Authority is responsible for the basic design including land use planning, traffic signal systems, and housing construction in Nusantara. LG CNS plans to develop smart services by integrating digital transformation (DX) technologies such as artificial intelligence (AI), data, cloud, and digital twin based on the New Capital Authority's basic design.
This smart city project will proceed in three stages: ▲ design, procurement, and construction (EPC) ▲ operation and maintenance (O&M), following LG CNS's smart service concept design.
The MOU signing also raises expectations for LG Group's joint participation in Indonesia's smart city projects. LG CNS plans to maximize business synergy by combining the capabilities of LG Group affiliates such as LG Electronics, LG Energy Solution, and LG Uplus.
Following this agreement, LG CNS will also sign MOUs with 'PT.PP', Indonesia's state-owned construction and investment company, and 'PT.HIN', a subsidiary of Indonesia's airport corporation. The three companies plan to jointly promote a smart city pilot project in the Sanur area of Bali.
The First Overseas Export Case of a Mega Smart City
LG CNS has been preparing to participate in the new capital project since December last year. As part of the Economic Innovation Partnership Program (EIPP) conducted by the Ministry of Economy and Finance, LG CNS provided consulting for the introduction of an intelligent transportation system and electric vehicle-centered public transportation system in Nusantara. EIPP is a government-to-government (G2G) mid- to long-term policy advisory program launched in 2020 to expand opportunities for Korean companies to participate in large overseas infrastructure projects.
Since 2006, LG CNS has led Indonesia's e-government initiatives by undertaking large national projects such as the National Crime Information System, National Fiscal Information System, and National Tax Administration System for the Indonesian National Police Agency.
The reason LG CNS was chosen as a partner by the New Capital Authority lies in the Sejong Smart City. Since digital technology is core to smart cities, DX capabilities that cover the entire process from city design to construction and operation are crucial. Indonesia is benchmarking Sejong City for its new capital project.
An LG CNS official explained, "LG CNS is participating in the 3.2 trillion KRW scale ‘Sejong Smart City National Pilot City’ and the approximately 5.4 trillion KRW scale ‘Busan Eco Delta Smart City National Pilot City.’ The Indonesian government is known to have shown great interest in LG CNS's DX capabilities as a leading domestic smart city project operator in Sejong and Busan."
LG CNS is also considering forming a win-win alliance with top large, medium, and small companies in key smart city sectors such as finance, construction, mobility, renewable energy, and telecommunications for the upcoming Indonesia smart city project.
Indonesia is advancing a national project to relocate the administrative capital from Jakarta on Java Island to Nusantara on Borneo Island through the New Capital Authority. By 2045, approximately 35 billion USD (about 50 trillion KRW) will be invested to build a smart city four times the size of Seoul (2,560 km²) in the middle of the Borneo jungle.
Kim Young-seop, CEO of LG CNS, emphasized, "Based on LG CNS's DX technology and smart city project capabilities, we will create an export case of a mega smart city business model and leap forward as a global leading smart city company."
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