Doubts over Indonesia’s new capital plans


Indonesia’s plan to build a new capital from scratch on Borneo island, which has already taken a backseat during the coronavirus pandemic, is in additional doubt as the government has not approved a budget for the $40-billion project yet which is also being opposed by parts of the local population.

The original plan was to start construction next year and begin first relocations from Jakarta in 2024. However, there are growing doubts that the government will be able to stick to the schedule as the focus is now on stemming the coronavirus pandemic and set aside almost $50 billion to cushion the blow to the economy. According to the office of President Joko Widodo, no budget for the new capital project has been disbursed until now.

Donny Gahral Adian, a senior adviser in the President’s office, confirmed to The Sydney Morning Herald that the ambitious plan for the new capital would be delayed by the coronavirus pandemic.

“We know that the Covid-19 mitigation needs a lot of financial support and we must reallocate and refocus the budget for it,” he said, but insisted that some work on the project was underway even though there would be an “evaluation” and “rescheduling” in the implementation of the single project stages.

Budget reallocation due to coronavirus pandemic

“Not all works has stopped, the National Planning and Development Agency and related ministries are still working on the legal framework of the project,” Adian said, adding that “the government will only handle 19 per cent of the whole budget, while the rest will be handled by the private sector. But as we know, the private sector is now experiencing difficulties due to the pandemic.”

Voices from the private sector said that most potential investors, particularly from the construction and infrastructure industries, said that they would prefer the new capital project to be postponed.

Among others, Sanny Iskandar, the deputy chairman of the Indonesian Chamber of Commerce, said the organisation wanted the government to take “a highly cautious approach” to the new capital and “at a minimum,” it should be delayed.

Moreover, some locals who live at the isolated proposed site in East Kalimantan province between the cities of Balikpapan and Samarinda are openly opposing the project and say they would prefer it to be cancelled altogether.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

Indonesia’s plan to build a new capital from scratch on Borneo island, which has already taken a backseat during the coronavirus pandemic, is in additional doubt as the government has not approved a budget for the $40-billion project yet which is also being opposed by parts of the local population. The original plan was to start construction next year and begin first relocations from Jakarta in 2024. However, there are growing doubts that the government will be able to stick to the schedule as the focus is now on stemming the coronavirus pandemic and set aside almost $50 billion to...


Indonesia’s plan to build a new capital from scratch on Borneo island, which has already taken a backseat during the coronavirus pandemic, is in additional doubt as the government has not approved a budget for the $40-billion project yet which is also being opposed by parts of the local population.

The original plan was to start construction next year and begin first relocations from Jakarta in 2024. However, there are growing doubts that the government will be able to stick to the schedule as the focus is now on stemming the coronavirus pandemic and set aside almost $50 billion to cushion the blow to the economy. According to the office of President Joko Widodo, no budget for the new capital project has been disbursed until now.

Donny Gahral Adian, a senior adviser in the President’s office, confirmed to The Sydney Morning Herald that the ambitious plan for the new capital would be delayed by the coronavirus pandemic.

“We know that the Covid-19 mitigation needs a lot of financial support and we must reallocate and refocus the budget for it,” he said, but insisted that some work on the project was underway even though there would be an “evaluation” and “rescheduling” in the implementation of the single project stages.

Budget reallocation due to coronavirus pandemic

“Not all works has stopped, the National Planning and Development Agency and related ministries are still working on the legal framework of the project,” Adian said, adding that “the government will only handle 19 per cent of the whole budget, while the rest will be handled by the private sector. But as we know, the private sector is now experiencing difficulties due to the pandemic.”

Voices from the private sector said that most potential investors, particularly from the construction and infrastructure industries, said that they would prefer the new capital project to be postponed.

Among others, Sanny Iskandar, the deputy chairman of the Indonesian Chamber of Commerce, said the organisation wanted the government to take “a highly cautious approach” to the new capital and “at a minimum,” it should be delayed.

Moreover, some locals who live at the isolated proposed site in East Kalimantan province between the cities of Balikpapan and Samarinda are openly opposing the project and say they would prefer it to be cancelled altogether.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

NO COMMENTS

Leave a Reply