Indonesia’s New Capital Project: Nusantara

JAKARTA (Reuters) – Indonesia’s new President Prabowo Subianto plans to spend 48.8 trillion rupiah ($2.99 billion) through 2029 to build the new capital city Nusantara, targeting government relocation by 2028, as reported by the project’s chief on Tuesday.

Construction of the $32-billion Nusantara in Borneo’s jungle, a legacy of former President Joko Widodo, began in 2022 after delays from the pandemic.

Widodo aimed to move the capital 1,200 km (745 miles) from Jakarta in Java island, known for its congestion and sinking issues. However, analysts predict that Prabowo may not pursue the project with the same ambition, raising concerns of it becoming a white elephant.

Widodo had already allocated 75.8 trillion rupiah for the project between 2022 and 2024, according to finance ministry data.

Nusantara authority chief Basuki Hadimuljono informed reporters that the next construction phase will emphasize housing and office buildings for parliament and judiciary, as most executive branch offices are already operational.

The government continues to seek private investment for city development, with Malaysian company Citadel Group and others set to start their 6.5 trillion rupiah investment in hotel, housing, and office projects soon.

($1 = 16,330.0000 rupiah)