Indonesian President Joko Widodo has picked East Kalimantan as the location for Indonesia's new capital in order to relieve the strain on Jakarta.
"Jakarta has received overwhelming burdens as the centre of administration, business, finance, trade and services, as well as (housing) the country's largest airport and seaport," Mr Joko, popularly called Jokowi at home, told a media briefing yesterday.
The burden on Java Island, where Jakarta is, has been mounting, as it is home to 150 million people, or 54 per cent of Indonesia's population, and accounts for 58 per cent of its gross domestic product, Mr Joko said.
Shifting the capital outside Java would help make future economic development more equitable, he added.
But first, Parliament will have to pass a law to greenlight the President's plan, which could cost billions of dollars and take shape over the next few years.
Under the relocation plan, Jakarta will be the commercial capital of South-east Asia's largest economy, while a new city will become Indonesia's administrative capital - akin to the roles played by Kuala Lumpur and Putrajaya respectively in Malaysia.
The Indonesian government had previously shortlisted two regions on the island of Borneo for the new capital: East Kalimantan and Central Kalimantan.
East Kalimantan is the largest province by land size after Papua and Central Kalimantan, and has vast eastern coastal areas.
These take up parts of its two largest cities, Balikpapan - which is a two-hour flight from Jakarta - and Samarinda, which faces the deep-sea Makassar Strait.
The new capital will be located between two regencies in the province - Penajam Paser Utara and Kutai Kartanegara - which also face the Makassar Strait.
Why East Kalimantan
Two regencies - Penajam Paser Utara and Kutai Kartanegara - in East Kalimantan have been chosen as the site for Indonesia's new administrative centre. Several reasons were cited for the choice.
They are sheltered from natural disasters such as earthquakes and landslides. Most other parts of Indonesia experience frequent seismic and volcanic activity due to its location on the Pacific "Ring of Fire", where tectonic plates collide.
2 STRATEGIC LOCATION
They are situated relatively at the centre of the sprawling archipelago and close to the well-developed cities of Samarinda and Balikpapan.
3 ADEQUATE INFRASTRUCTURE
East Kalimantan boasts an international airport in Balikpapan and a domestic one in the neighbouring city of Samarinda, a cargo seaport, six dams and a toll road linking Balikpapan and Samarinda which should be ready this year.
4 AVAILABLE LAND
The districts have adequate government-owned land - up to 180,000ha - on which the capital can be built.
East Kalimantan has low poverty levels, a good education base and a small population that could be receptive to newcomers. It is home to a mix of ethnicities.
The province has an international airport in Balikpapan and a domestic one in the neighbouring city of Samarinda, as well as a cargo seaport and six dams.
Also, a toll road linking Balikpapan and Samarinda is expected to be ready this year.
Jakarta has served as the administrative, financial and trade centre of Indonesia since 1949.
However, the city has suffered from traffic congestion, overcrowding, widespread pollution and regular flooding for decades.
Jakarta is also sinking by 10cm a year, and its water table is falling as its residents have dug deep wells to draw out raw water.
Mr Al Muzzammil Yusuf, an MP from the opposition Prosperous Justice Party, told The Straits Times last week that the government would have to conduct a thorough study on why it is important to move the capital.
He added that the government has to come up with draft legislation for the move before Parliament can schedule when to start deliberating on the issue.
He wanted input sought on the issue from academics, experts and non-governmental organisations.
Economist Ahmad Heri Firdaus, who works with the Jakarta-based Institute for Development of Economics and Finance, agreed, telling Radio Elshinta that he has not seen any thorough study on the subject from the government.
"We must be careful. There would be a lot of constraints and Indonesia has other priority agenda to boost the economy that are not less important," he said, warning that building a new capital would be a costly exercise as well.
Mr Joko had earlier tasked National Development Planning Minister Bambang Brodjonegoro with carrying out the study on moving the capital.
The agency has not made the details of the study public.
Public Works and Housing Minister Basuki Hadimuljono yesterday said the government would complete the design work and masterplan in the middle of next year, around the same time that it plans to finish drafting a Bill to put before Parliament.
The move to shift the capital is expected to cost 466 trillion rupiah (S$45.4 billion).
Once the proposed Bill is ratified into law by Parliament, no future leader can scrap the move without parliamentary sanction.
"Construction should take three to four years, which includes dams, water sanitation, roads and buildings. God willing, by 2023 to 2024, we will start to move there," Mr Basuki said.
Planning Minister Bambang added that the new administrative capital would initially occupy 40,000ha of land.
The protected forests in the area would not be touched, he stressed, as they would function as green belts for the new city, which is yet to be named.