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

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

This aerial picture taken on Aug 31, 2022 shows vehicles stuck in a traffic jam (bottom right) during the afternoon rush hour in Jakarta. (AFP)
This aerial picture taken on Aug 31, 2022 shows vehicles stuck in a traffic jam (bottom right) during the afternoon rush hour in Jakarta. (AFP)

JAKARTA: Indonesia's public works ministry on Monday proposed around 12.7 trillion rupiah ($807.68 million) in extra funds over the next two years to speed up construction of the country's new capital city on Borneo island.

If approved by the finance ministry, the public works ministry will see a 30% rise to around 55.7 trillion rupiah in its planned construction budget for the new seat of government, which will be called Nusantara.

Previously, the government planned to spend 43 trillion rupiah in the 2022-2024 period as part of the $32 billion project.

The government has said it will only finance about a fifth of the total cost and that investors would bankroll the rest.

Minister Basuki Hadimuljono said in a parliamentary hearing that additional funding is needed to speed up infrastructure development in the core government area, which includes toll roads and housing for civil servants.

"After sounding out the market back in August, lots of investors wanted in. That's why we got orders [from President Joko Widodo] to speed up development not only in the area of [the new presidential palace and ministerial offices] but also of other areas," he said.

Basuki said construction on the supporting infrastructure in the core government area will start in January as the president plans to invite investors to visit the new capital in the second quarter of next year.

In a palace statement on Monday, President Widodo ordered related authorities to open up other investment spots in the core government area to cater to high demand from investors.


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