News Desk, Jakarta – Despite the mounting logistical and environmental challenges, the leadership of the Nusantara Capital City (IKN) Authority has expressed optimism that construction for the core administrative center of the new capital in East Kalimantan would be completed in the first half of 2024.
The newly inaugurated head of the IKN Authority, Bambang Susantono, told a media gathering on Tuesday that with guaranteed funding from the state budget at least for the next two years and with land clearance problems already settled, construction in zone 1A, where vital government buildings will be built, could commence immediately.
"We are aware that this will be a massive undertaking, but we're optimistic that all government buildings, from the State Palace and ministerial complex to the House [of Representatives] compound, will be ready by 2024," Bambang said.
Bambang, a former Asian Development Bank (ADB) official, also said the deadline for the completion of all construction projects in zone 1A would be the general elections date of Feb. 14, 2024.
He added that funding for the construction would rely solely on the state budget and the government would rely on funding from private sectors for supporting facilities.
"We will allow investors to build schools, hospitals, shopping malls to support the presence of government workers who will move in once the administrative center is ready [...] We want to make the new capital a livable environment for all," Bambang said.
Bambang's statement came less than a month after President Joko "Jokowi" Widodo symbolically kicked off construction for the country's new capital in Sepaku district, North Penajem Paser, East Kalimantan.
President Jokowi decided to press ahead with the relocation plan despite a number of setbacks, including the pulling out of investors who had pledged to chip in, such as Japan's Softbank Group.
The Japanese company was reportedly ready to invest US$30 billion to $40 billion in the new capital, a huge portion of the initial development cost.
Building the basic infrastructure of the capital would cost an estimated Rp 466 trillion ($32.6 billion). The government plans to pay one-fifth of that bill from the state budget, leaving the remaining four-fifths dependent on private investments.
The IKN has pledged to make the new capital an environmentally friendly city where residents can live side by side with nature.
Bambang, however, acknowledged that given the microclimate situation in the coming years, new buildings in the area would rely on a significant amount of air-conditioning.
"But right now, we are planting millions of new trees so that in the future, the area would be cooler than it is now," he said, adding that the IKN Authority was planting 15 million trees per year.
The IKN head also said that all modes of public transportation in the new capital would have a small carbon footprint and would likely all be electric.
The design for the new State Palace will include a five-lane highway in front of the compound, a new feature that would allow for a cultural or military parade, he said.
In a statement published on the IKN website, the authority said the "president of Indonesia will celebrate the 79th anniversary of the Republic of Indonesia's independence at the IKN site on Aug. 17, 2024".
Meanwhile, IKN Authority deputy head Donny Rahajoe, a former executive of property giant Sinar Mas, said that in the next 19 months, a new agency would carry out a massive construction project never before attempted in the country's history.
"Even the most well-funded property developers managed only to build on 100 hectares of land per year. With the IKN, we will have to build on 500 ha per year," Donny told the same gathering on Tuesday.
Despite the logistical challenges, Donny said he was convinced that the IKN Authority could accomplish the task.
"The biggest problem for private developers is mostly land clearance. At the site of the new capital, we don't have that problem," he said.
Donny said the completion of the government complex and its supporting facilities would be key to attracting both new residents and investors to the new capital city.
"As someone from the real estate industry, I'd like to use the analogy that this new government center is what we call a show building, and this is what will draw attention, [to the new capital]," Donny said.
Following the completion of the government center, the IKN will then move to the second stage of the project starting in 2025, when it starts the construction of business-oriented buildings.
Separately, Finance Minister Sri Mulyani Indrawati said the government would earmark up to Rp 30 trillion next year to finance the new capital project.
"For next year, we will set aside between Rp 27 trillion and Rp 30 trillion for the spending in connection with the construction of the new capital," Sri Mulyani told a press briefing.
She said the money from the state budget would be spent on building basic infrastructures like roads, as well as health, education and security facilities.