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INDONESIA: National Capital Set for 1,400 km Relocation by 2024

The government has confirmed plan to relocate the country capital to a new purpose-built site. This will see all government agencies, except for the central bank and a number of related economic departments, transferred 1,400 km of the northeast of the current capital to an 180,000-hectare site in the East Kalimantan Province. The move is scheduled to be completed in 2024, with work on the required infrastructure set to begin next year. Jakarta – a two-hour flight from the new seat of government – will continue to function as the country’s commercial capital.

According to official sources, the move has partly been triggered by environmental concerns and by the increasing problem of over-population in Jakarta. It is also seen as a means of boosting the economic development some of the country’s outlying regions.

The move, though, has courted much controversy, with many unhappy about its high costs and the high incidence of corruption likely to be facilitated. Looking to counter such concerns, the government has maintained that only 19% of the US$32.8 billion costs will be met from state coffers, with the remainder coming from Public Private Partnership (PPP) programmes, investments by state-owned enterprises and private sector funding.

To date, no official name for the new national capital has been announced.

Content provided by Picture: HKTDC Research
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