Indonesia proposes 30% budget top-up for construction of new capital

Indonesia’s Public Works Ministry on Monday proposed additional funding of about 12.7 trillion rupiah ($807.68 million) over the next two years to speed up construction of the country’s new capital on the island of Borneo.

If approved by the Finance Ministry, the Public Works Ministry will see a 30 percent increase in its planned construction budget for the new seat of government, to about 55.7 trillion rupees, which will be called Nusantara.

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However, the Cochin Chamber of Commerce and Industry has urged the Center to bear the entire cost of the project.

Earlier, the government had planned to spend Rs 43 trillion over the period 2022-2024 as part of the $32 billion project.

The government has said it will finance only about one-fifth of the total cost and investors will bankroll the rest.

extra money

Minister Basuki Hadimuljono told a parliamentary hearing that additional funds were needed to speed up infrastructure development in the core government sector, including toll roads and housing for civil servants.

“After we came back to the market in August, there were a lot of investors wanting. So we got orders [from President Joko Widodo] not only to accelerate development in the region [the new presidential palace and ministerial offices] But also of other areas,” he said.

Basuki said the construction of supporting infrastructure in the main government sector would begin in January as the president plans to invite investors to visit the new capital in the second quarter of next year.

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In a palace statement on Monday, President Widodo ordered relevant authorities to open other investment sites in the main government area to meet the high demand from investors.