Indonesia may soon have a new capital in East Kalimantan. (Antara Photo/Wahyu Putro A.)

Gov't Narrows Down Location for $34b New Capital in East Kalimantan

AUGUST 22, 2019

Jakarta. The government has narrowed down the location for Indonesia's new capital to a city in the province of East Kalimantan, Agrarian Affairs and Spatial Planning Minister and the head of the National Land Agency Sofyan Djalil said on Thursday. 

"The new capital will be in East Kalimantan, but the specific location hasn't been decided," Sofyan told reporters after a meeting at the Coordinating Ministry for Economic Affairs' headquarters in Jakarta.

Sofyan said the government will free up 3,000 hectares of land for a new administrative center as soon as a formal announcement is made by President Joko "Jokowi" Widodo. 

"The total area could be expanded to 200,000 to 300,000 hectares. We want to build a new capital with many beautiful parks so people can live healthily and enjoy the clean air. We want it to be an attractive city to live in," Sofyan said.

The president had asked for the House of Representatives' approval to move the capital to Kalimantan last week. The government estimated the project would cost a total of Rp 486 trillion ($34 billion), but private investors are expected to cover most of the cost. 

National Development Planning Minister Bambang Brodjonegoro said the government could only set aside Rp 94 trillion from the state budget to acquire land and build basic service infrastructure, a new state palace, military and police headquarters and city parks.

He said a public-private partnership scheme is expected to attract Rp 265 trillion from the private sector and state-owned construction firms. The money will be used to build new offices for the executive, legislative and judicial branches of government, education and health facilities, museums, correctional institutions and other government infrastructures. 

Investment from the private sector is expected to pull in Rp 127 trillion to be spent on public housing, universities, a technopark, airport upgrades, ports, toll roads, health facilities, shopping malls and a conference hall, Bambang said.