Indonesian Government plans to move Indonesia out of Java. The news has broken through the Internet, in early 2019, days after the country latest general election. Since then it has garnered an equal amount of support and derisions on social media. Experts predict Indonesia capital city relocation may cost $33 billion.
The issue discussed by many, if not all, previous presidents. During Indonesia independence-day celebration, the president announced that the capital city will move to Borneo Island. Meanwhile, today, the president announces Indonesia new capital city will be in Penajam Paser Utara, East Borneo.
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Bambang Brodjonegoro, the country’s National Development Planning Minister, says that the new capital city should be in the middle of Indonesia archipelago. Besides, he also mentions that the new capital city will be relatively saved from natural disaster and have plenty of free lands for the government to acquire easily.
The Budget
The minister agrees that the Indonesia capital city relocation may cost Rp 466 trillion ($33 billion). He later also mentions that the money will come from various source. It ranges from the state budget, state-owned enterprises, a public-private partnership to the private sector.
For the details, the state budget money will be used to build new government offices and a new parliament building. State-owned enterprises will work together to build key infrastructure and public facilities.
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Meanwhile, other infrastructure and public facilities will use public-private partnership schemes. Presidential property and commercial facility projects will use private financing.
Besides, private businesses can also secure concessions from the government to buy land or properties in the new capital. Thus, in the end, it can also generate income for the state.
The scale of land requires to build the new capital will depend on how many civil servants will make the exodus from Jakarta. If every one of them moves to the new capital, the government will need to free up at least 40,000 hectares of land. But if only some of them make the great migration, they will need only 30,000 hectares.
