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Jokowi says Indonesia's new capital city is on track despite project leadership resignations

Straits Times - June 4, 2024

Hariz Baharudin and Linda Yulisman, Jakarta – President Joko Widodo has travelled to East Kalimantan and reassured the public that Indonesia's planned new capital there is on track.

This comes just a day after the bombshell announcement that the leaders of the body overseeing the project had resigned.

On June 4, speaking at an event in the city of Balikpapan, the closest port of call to upcoming capital Nusantara, Mr Widodo stressed how the new city is still "in the development process" and that it would be the "greenest capital in the world".

He noted that as much as Nusantara will be filled with buildings, it will also be filled with green spaces, and that the city will be designed to include city parks as well.

"The dream city of the future... is a... smart city, a creative city, which is liveable," he said.

His comments in Balikpapan, a two-hour drive to Nusantara, came after news broke on June 3 about the resignations of the head and deputy head of the new capital project.

In an Instagram post later that day, Mr Widodo said that the development of Nusantara will not stop.

"The development of IKN will continue according to the shared vision that has been established," he said, using the initials of the city's full name – Ibu Kota Nusantara.

On June 3, Indonesia's presidential office announced that Mr Widodo had accepted the resignations of Mr Bambang Susantono, a former official at the Asian Development Bank who was heading the project, and his deputy Dhony Rahajoe, an architect and former real estate developer.

State Secretary Pratikno, who goes by one name, said that Mr Bambang has been assigned a new job to assist Mr Widodo in "strengthening international cooperation" to build the new city.

No details, including whether Mr Bambang will be part of a council or a ministry, have been given so far.

Mr Widodo has appointed Public Works and Housing Minister Basuki Hadimuljono as the acting head of the Nusantara Authority and Vice-Minister of Agrarian and Spatial Planning Raja Juli Antoni as his deputy.

The President so far has not given any reasons for the departure of Mr Bambang and Mr Dhony, which has raised questions about the status of the US$32 billion (S$43 billion) project.

He is expected to make the journey to Nusantara on June 4 to inaugurate several projects, including schools.

Celebrations for Indonesia's Independence Day on Aug 17 are also being planned there for the first time.

Mr Widodo's pet project to relocate the country's capital, first unveiled in 2019, has been beset by various troubles, including a lack of private investment and problems with land acquisition.

His government had expected to fund more than half of the estimated costs from private investors and public-private partnerships.

As at mid-November 2023, private investors had pledged a total of US$2.6 billion to the project, mostly via letters of intent.

Mr Bhima Yudhistira, the executive director of think-tank Centre of Economic and Law Studies, said that land ownership is among the biggest hurdles to attract investment.

"The overlapping land permits for land used for the development of Nusantara, land owned by the local communities, and forests remain the greatest concerns for investors," he told The Straits Times.

As much as 2,086ha of land designated for the new capital, including areas to build toll roads, is still occupied by local residents.

In March, the Nusantara Capital Authority notified 200 residents in North Penajam Paser Regency of its plan to evict them, which drew strong opposition from rights groups.

Following his appointment as acting head of the authority, Mr Basuki said he would soon address the issue "by prioritising the interests of the people".

He explained that the local residents would be offered financial compensation for their land, and they could opt to accept the payment or refuse it and continue occupying the land.

Indonesia's impending change of leadership also raises concerns about the project's continuity, observers said.

Mr Widodo will step down in October after serving two terms as president and hand over the reins to Mr Prabowo Subianto.

Dr Riris Katharina, a senior researcher at the National Research and Innovation Agency, said that the resignations of Mr Bambang and Mr Dhony signalled a possible change of direction for Nusantara's development under Mr Prabowo's new administration.

Mr Prabowo has said it will take 25 to 30 years to complete the project, which may require an expenditure of US$1 billion a year.

"This sends a signal that there's no need to force the development of Nusantara quickly. It puts the brakes on the rush to build Nusantara," Dr Riris told ST.

Dr Riris also noted that the new deputy head of the project, Dr Raja Juli, is also the secretary-general of the Indonesian Solidarity Party, which is led by Mr Widodo's youngest son Kaesang Pangarep.

She said this demonstrated Mr Widodo's efforts to appoint his own supporters to ensure the project stays on track while he is still president.

"President Jokowi does not want to lose face with the resignation of the authority's leaders," she said.

The appointment of Mr Basuki – who has a good track record in building infrastructure – as the project's new acting head is aimed at resolving outstanding issues left by Mr Bambang, such as land acquisition and the establishment of a special regional government, she added.

Source: https://www.straitstimes.com/asia/se-asia/jokowi-says-indonesia-s-new-capital-city-is-on-track-despite-project-leadership-resignation