Another $1bn allocated for Indonesia’s new capital

Indonesian president Joko Widodo visiting the location of Nusantara (President’s Secretariat/Muchlis Jr/Public Domain)
Indonesia’s parliamentary budget committee approved an extra $1bn last week to hasten work on the country’s planned new capital city, “Nusantara”, in East Kalimantan province on Borneo island, Reuters reports.

The plan for the new city built on virgin land amid rainforests relies on private investment for around 80% of its projected $32bn cost.

No investment deal has been signed yet, according to Reuters, despite the Indonesian government’s heavy promotion of the scheme, including huge tax breaks for investors (see further reading).

Budget committee chair Said Abdullah said the latest cash release would help ensure the country’s president can move into the new presidential palace in June next year, as planned.

That is unlikely to be Joko Widodo, Indonesia’s current president who has championed the new capital scheme, because Indonesian law prevents him serving more than two terms. A general election is scheduled for February 2024.

The government released $1.47bn earlier this year to keep the project going.

It wants to have the capital’s main administrative offices including the presidential palace and ministerial buildings completed by mid-2024, with at least 16,000 civil servants, military, and police moving in from then.

In April this year, the body delivering the city project, Nusantara National Capital Authority, said progress on government offices and the presidential palace stood at 5.8% and 8%, respectively.

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