Indonesia's new capital city project put on hold

JAKARTA • The government has postponed the plan to build Indonesia's new capital city in East Kalimantan as the country switched its priorities to mitigating the coronavirus pandemic, an official has said.

National Development Planning Agency (Bappenas) chief Suharso Monoarfa confirmed with The Jakarta Post on Wednesday that the capital relocation plan had been suspended for the time being, since the pandemic had forced the government to shift its policies.

Mr Suharso previously announced the postponement of the multibillion-dollar project during a meeting on Tuesday with House of Representatives Commission XI overseeing finance and banking affairs.

"To this day, the programme of relocating the nation's capital is still on hold," Mr Suharso told lawmakers in the meeting.

Although the construction plan was suspended, Mr Suharso said the government would continue with the planning stages for the new capital, which will be built in North Penajam Paser and Kutai Kartanegara regencies.

The planning includes work related to infrastructure development in buffer cities of East Kalimantan's provincial capital, Samarinda, and port city Balikpapan.

In the initial plan announced last year, Public Works and Housing Minister Basuki Hadimuljono said the government would begin construction of the new capital that would replace Jakarta next year.

President Joko Widodo previously said the relocation and construction of the new capital city - planned to be a smart metropolis that supported the growth of innovation and green industries - would cost around 466 trillion rupiah (S$43 billion).

According to the Finance Ministry, the state budget would cover 19.2 per cent of the cost, while 54.4 per cent of the cost would be financed through government cooperation with businesses.

The remaining 26.4 per cent of the cost would be gained through private financing.

THE JAKARTA POST/ASIA NEWS NETWORK

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A version of this article appeared in the print edition of The Straits Times on September 11, 2020, with the headline 'Indonesia's new capital city project put on hold'. Print Edition | Subscribe