Indonesia to Relocate Its Capital City

03 Sep 2019   |   Infrastructure

Indonesia has taken a big step in its history following the plan to relocate the capital city from metropolitan Jakarta to a jungle-covered area located on the island of Borneo. The grand scheme to move the capital was announced by President Joko Widodo in August 2019 through national TV broadcast.

President Joko Widodo and his cabinet have chosen a part of Kutai Kartanegara regency and North Penajam Paser regency in East Kalimantan province as the new strategic site for Indonesia’s yet to be named new capital. The new site is selected as it is located in a not yet developed area and the geographical center of the Indonesian archipelago. The proposed location for the capital city is also situated near Balikpapan and Samarinda, two of the most populous urban cities and financial centers of Indonesian Borneo.

The relocation plan was initiated by the Indonesian government as an initiative to reduce the burden of the current capital city of Jakarta. Currently, around 30 million people reside in the Greater Jakarta area, making Jakarta one of the most populated cities in the world. On top of that, Jakarta also presents vulnerabilities toward environmental issues as well as natural disasters, such as severe flooding and sinking due to groundwater over-extraction, air pollution crisis, and earthquakes, among others. Jakarta’s current state has prompted the government to find a more stable center for nearly all of the government’s operations.

The new capital city will be built on 180,000 hectares of a government-owned area. Bambang Brodjonegoro, Minister of National Development Planning, mentioned that the development of the new capital will be concentrated on 40,000 hectares area in Bukit Soeharto. He also added that half of the allotted 180,000 hectares area will be green space and the development will not disturb the protected rainforest area. The government intends to build the new capital as a green city, which preserves the surrounding tropical ecosystem.

Basuki Hadimuljono, Minister of Public Works, expected that the design for the new capital will be completed by the end of this year, while the construction of fundamental infrastructures, such as dams, water lines, and roads will only begin in 2020. Without any interference, the development of the new capital is expected to complete within three to four years. The government has set a target to already run the office in the new capital by 2024, the last year of Joko Widodo’s second term in office.

Bambang Brodjonegoro said that the mega project to relocate the capital city will cost an estimated USD 32.7 billion. The government will only cover 19% of the total cost to relocate the capital, while the other 81% will mainly come from partnerships with private sectors. Direct investments from the private sector and state-owned companies are to be expected to fund this mega project. Public-private partnerships will also play a huge role in financing the relocation. It is estimated that around one million people, mainly civil officers, will shift from the current capital of Jakarta to the new capital city.