Jayanty Nada Shofa, Jakarta – The government spending on the ambitious capital relocation project has reached Rp 5.5 trillion ($336 million) as of May, according to Finance Minister Sri Mulyani.

The government has only used up 13.7 percent of this year's new capital budget, which amounts to Rp 40 trillion. About Rp 3.4 trillion of the already spent money went to infrastructure works – including the state palace complex – as Indonesia rushes to meet the deadline of hosting the Independence Day ceremony at the new capital of Nusantara this August. The government plans to put no more than Rp 36.7 trillion for Nusantara's infrastructure needs throughout this year.

"Hopefully, the new capital will be ready by the time we celebrate Independence Day on Aug. 17... We have also spent [the new capital money] on housing for civil servants and law enforcement officers, as well as tollway, hospital, VVIP airport, among others," Sri Mulyani told a press briefing on Thursday.

The government already recorded Rp 2 trillion in non-infrastructure expenditure for this project so far this year. The money went into the relocation planning and the operational activities of the city's authority body, to name a few. Government data shows Indonesia has spent approximately 60 percent of what it had allocated for the project's non-infrastructure needs this year.

The annual government spending for the project reached Rp 5.5 trillion in 2022, and it eventually soared to Rp 27 trillion in 2023. This year, Indonesia is planning to spend no more than 40 trillion on the project as the country tries to attract investors –both from home and abroad– into the new capital.

The project made headlines earlier this month after the city's authority body head Bambang Susantono resigned from his post. Investment Minister Bahlil Lahadalia said at the time his resignation had not affected investors' interests. Public Works Minister Basuki Hadimuljono is now the acting Nusantara body head. Bambang later got assigned a new diplomatic role in which he would help Indonesia secure international partnerships related to the city's construction.

According to media reports, Basuki recently admitted that the project had yet to attract actual foreign investments, although many had expressed interest in taking part in the project. The foreign investors are reportedly seeking an internal rate of return of beyond 12 percent.

As the independence day nears, all eyes are on the new capital and whether it will be capable of hosting the long-awaited ceremony. President Joko "Jokowi" Widodo –alongside his successor Prabowo Subianto – is set to attend the ceremony in Nusantara. Vice President Ma'ruf Amin and his future successor Gibran Rakabuming Raka will celebrate Independence Day in Jakarta.Diana Kusumastuti, a senior official at the Public Works Ministry, recently said that both the interiors and exteriors of the Nusantara Palace were ready to accommodate the upcoming ceremony. Jokowi should also be able to start working from Nusantara by next month, according to Diana.

Source: https://jakartaglobe.id/business/govt-spending-on-new-capital-hits-336-million-as-of-endma