The National Development Planning Agency (Bappenas) has estimated that it would cost at least Rp 1 trillion ($74 million) to relocate the Indonesian capital outside Java. (Antara Photo/Yulius Satria Wijaya)

New Indonesian Capital Could Cost North of $70m


JANUARY 05, 2018

Jakarta. The National Development Planning Agency, or Bappenas, has estimated that it would cost at least Rp 1 trillion ($74 million) to relocate the Indonesian capital outside Java.

This indicative figure differs significantly from the previous administration's Rp 100 trillion plan to move the capital to Jonggol in West Java, about 40 kilometers southeast of Jakarta.

National Development Planning Minister Bambang Brodjonegoro said the government can keep the cost at the minimum because it plans to build the new capital on state-owned land.

The administration is also rallying the private sector to chip in on the development of a new capital city.

"We have made a budget estimation. It would certainly cost more than Rp 1 trillion," Bambang told reporters.

Bappenas submitted the initial result of its study to President Joko "Jokowi" Widodo on Thursday, presenting three options to replace the gridlocked and flood-prone Jakarta as the capital. The potential locations are Central Kalimantan, West Kalimantan and East Kalimantan.

The areas were chosen based on the availability of land, low risks of natural disasters and existing infrastructure.

Bambang said Jokowi has yet to decide on the location, but that Bappenas would follow up the study with a more technical assessment, including soil conditions and ease of access for construction teams.

The minister said relocation of the capital would require the government's commitment and political support to see the process through in a timely manner.

"There is one country that took up to 10 years to move its capital. Others needed five years, or two to three years. In this context, its depend on speed and commitment," Bambang said.

However, Bhima Yudhistira Adinegara, an economist at the Institute for Development of Economics and Finance (Indef), warned that the plan could swell the state budget deficit and government debt, which currently stands at more than Rp 3,800 trillion.

"Regardless of the plan to move the capital out of Java, the government should be more realistic to see the condition of the state treasury," Bhima said.