Moch. Fiqih Prawira Adjie, Jakarta – The government has postponed the plan to construct Indonesia's new capital city in East Kalimantan as the country switched its priorities to mitigating the coronavirus pandemic, an official has said.
National Development Planning Agency (Bappenas) head Suharso Monoarfa confirmed with The Jakarta Post on Wednesday that the capital relocation plan had been suspended for the time being, since the pandemic had forced the government to shift its policies.
Suharso previously announced the postponement of the multibillion dollar project during a meeting on Tuesday with House of Representatives Commission XI overseeing finance and banking affairs.
"To this day, the program of relocating the nation's capital is still on hold," Suharso told lawmakers in the meeting.
Although the construction plan was suspended, Suharso said the government would continue with the planning stages for the new capital, which will be built in North Penajam Paser and Kutai Kartanegara regencies, including those related to infrastructure development in buffer cities of East Kalimantan's provincial capital, Samarinda, and port city Balikpapan.
In the initial plan announced last year, Public Works and Housing Minister Basuki Hadimuljono said the government would begin construction of the new capital that would replace Jakarta in 2021.
President Joko "Jokowi" Widodo previously said the relocation and construction of the new capital city – planned to be a smart metropolis that supported the growth of innovation and green industries – would cost around Rp 466 trillion (US$31 billion).
According to the Finance Ministry, the state budget would cover Rp 89.4 trillion, 19.2 percent of the cost while Rp 253.4 trillion, 54.4 percent, would be financed through government cooperation with businesses. The remaining Rp 123.2 trillion, 26.4 percent of the cost, would be gained through private financing.
During the meeting with the House on Tuesday, Suharso also proposed a Rp 1.77 trillion budget for Bappenas next year, an increase of Rp 260.8 billion from the previously approved Rp 1.5 trillion in the 2021 budget.
Out of the additional budget, Rp 240 billion would be used to fund the agency's priority programs, such as the data portal initiative referred to as Satu Data Indonesia (One Data Indonesia) and continuing the sustainable development goals programs.