Public Works and Public Housing (PUPR) Minister Basuki Hadimuljono said that his team would sign contracts for five infrastructure construction projects in the planned capital city of Nusantara in the foreseeable future. He had reported the plan to President Joko “Jokowi” Widodo and said that the contract’s budget was already on the list of budget utilization.
“The ministry received an additional budget of US$ 341.7 million (IDR 5.1 trillion) for the development of basic infrastructure in the new capital Nusantara this year,” said Hadimuljono, adding that the additional budget would be allocated to the ministry’s directorate generals involved in the project.
On September 5, 2022, the public works ministry signed contracts for 19 project packages in Jakarta, kicking off Phase 1 of the basic infrastructure development of Nusantara new capital (IKN), East Kalimantan. This year’s Phase 1 package, which includes 19 project packages, is valued at IDR 5.3 trillion.
“The PUPR Ministry has drawn up plans of basic infrastructure development in Nusantara for the 2022-2024 period with a total budget of IDR 43.73 trillion. In 2022, the budget allocated for the new capital development is IDR 5.3 trillion,” PUPR Ministry Secretary General Mohammad Zainal Fatah said.
After the Directorate General of Construction Development completed the auction process, 19 work packages were signed symbolically: Six packages worth IDR 42.8 billion by the Directorate General of Water Resources, eight packages worth IDR 4.59 trillion by the Directorate General of Highways, four packages worth IDR 111.9 billion by the Directorate General of Human Settlements, and one package worth IDR 567 billion by the Directorate General of Housing.
Six packages totaling IDR 42.8 billion for irrigation and flood works; eight toll highways totaling IDR 4.59 trillion; four resettlement sites totaling IDR 111.9 trillion; and a housing project totaling IDR 667 billion are among the 19 packages.
Property observer from Indonesia Property Watch, Ali Tranghanda, said that the construction of Nusantara in East Kalimantan would increase property prices in Jakarta.
“Will this desolate Jakarta? Not really. It can only be like that if, for example, there is a policy of central bank, finance and stock exchange all having to move to the new capital,” he said on August 26, 2022.
However, as long as the stock exchange and the national financial center remain in Jakarta, the city will be regarded as Indonesia’s business center. However, Tranghanda warned of possible sub-urbanization as a result of the relocation of the capital city.
Nusantara authority will educate 1,535 persons from a total of 9,300 workforce applicants for the first phase of infrastructure construction in Indonesia’s new capital over the course of six days.
“The total workforce candidates that would be trained for the infrastructure development in the new capital is 9,300 people,” said IKN authority deputy chairman Dhony Rahajoe during the opening of Construction Workforce Training and Certification for IKN Infrastructure Development Preparation in Sepaku, on August 27, 2022. He stated that the new capital development wanted to realize and continue Indonesian Founding Father Sukarno’s concept to move the capital city.
Indonesia is seeking Saudi Arabian funding in relocating its capital city, a mammoth US$ 32-billion project that Jakarta’s ambassador to Jeddah said was consistent with the Kingdom’s Vision 2030 agenda.
The Southeast Asian country intends to relocate its capital from the sinking, congested Jakarta to a place some 2,000 kilometers distant in East Kalimantan, with the new metropolis dubbed “Nusantara,” which means “archipelago” in old Javanese.
The government adopted a new law in January to press forward with the relocation plan, opening the path for construction to begin. According to officials, the project would take decades and will help spread wealth throughout Indonesia, as Java is home to around 60% of the country’s population and more than half of economic activities.
