Erwida Maulia, Jakarta – Indonesian President Joko Widodo on Monday announced the location of Indonesia's next new capital in East Kalimantan Province.
The new capital location will straddle two districts: Penajam Paser Utara and Kutai Kartanegara in East Kalimantan province. It is one of the three sites that the government had earlier said it was considering near Balikpapan and Samarinda, the province's two largest cities, which are a two-hour flight from Jakarta. It is in a forested area owned by the government, so there will be no difficulties acquiring privately owned land. Earthquakes, flooding and volcanic eruptions are less common.
Balikpapan is home to oil refiners and a port, making it the island's economic center. Samarinda is the provincial capital. Compared with other cities, much of the necessary infrastructure is already in place. Both cities have an international airport, and they could be connected to the rest of the island via highways and railways.
Widodo earlier said he wants the new capital to be a green, smart city, meaning he wants it wired with the latest information and communications technology. The aim is also to keep the city compact, so it does not harm surrounding tropical rainforests.
Widodo made formal his bid to build the new capital during a parliamentary speech on Aug. 16, when he urged lawmakers and the rest of the nation to support the capital move.
Meanwhile, the nation is still divided over whether the costly relocation is necessary. Backers share the president's concerns over Jakarta's worsening traffic congestion, air pollution, subsidence and high property prices – as well as the need to jump-start the economy in the less developed eastern parts of the country.
Critics, however, question the feasibility of such a massive project – citing concerns over rising debt and its vulnerability to corruption, which often afflicts lucrative public projects in Indonesia.
Officials at the National Development Planning Ministry, or Bappenas, earlier said the government wants to finalize deliberations in parliament and regulatory framework for the capital relocation by the end of this year. It wants to build basic infrastructure in 2020-21, and government offices and other facilities in 2023-24, with the move slated to start in 2024 – the year Widodo will end his second five-year term in office.
While many government agencies will relocate, the central bank and other economic agencies are set to stay in Jakarta.
Bappenas said the move will cost an estimated 466 trillion rupiah ($32.7 billion), with the government intending to cover less than 10% of that and encouraging public-private partnerships to cover the bulk of the development costs. The plan will see about 1 million people move from Jakarta to the new capital, making construction of basic facilities such as housing and schools a challenge.
[Nikkei staff writer Bobby Nugroho contributed to this story.]