Indonesia plans to begin work on $33bn capital in 2021

Indonesian president Joko Widodo announced on Monday, 26 August, that construction work would begin on transferring the country’s administrative capital from Jakarta, in western Java, to Borneo within two years.

Jakarta, which has a population of about 10 million, is facing insurmountable problems: constant traffic congestion, dangerous air quality, a lack of parks and cultural centres – and the possibility that one quarter of it may be under water by 2025.

Under the plan, Indonesia’s new capital will be built on a greenfield site in the province of East Kalimantan where the government owns about 18,000ha of land. The project is expected to cost in the region of $33bn, of which 19% will come from the state budget with the remainder from private investors and public-private partnerships.

President Widodo told reporters: "The government has conducted in-depth studies and we have intensified the studies in the past three years. The results shows that the most ideal location for the new capital is part of North Penajam Paser Regency and part of Kutai Kartanegara Regency in East Kalimantan."

He added that Jakarta would remain the country’s financial and commercial centre.

Among the attractions of Borneo are its relative immunity from earthquakes and volcanic activity, its natural beauty and the fact that it is near the centre of the Indonesian archipelago.

The aim is to begin moving ministries to their new homes in 2024.

Image: The Sudirman Central Business District (Muhammad Rasyid Prabowo/CC BY 2.0)

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