Uncertainty looms over the future of Indonesia’s new capital after chief resigns
The abrupt departure stirs speculation that unattainable goals have been set for the Nusantara project
THE future of Indonesia’s ambitious new capital city project, Nusantara, has been thrust into the limelight following the unexpected resignation of Bambang Susantono, the head of the Nusantara Capital City Authority.
His departure, announced on Monday (Jun 3), has stirred widespread surprise and speculation among observers, particularly given the critical juncture at which the project is.
“His resignation raises significant concerns for investors, prompting questions about whether it is linked to unattainable targets before August,” Tauhid Ahmad, senior economist of Jakartabased think tank Institute For Development of Economics and Finance (Indef) told The Business Times.
Outgoing President Joko Widodo had set an ambitious goal of completing Nusantara’s initial phase by early August, with aims to host his final Independence Day ceremony at the new capital.
The government is also prepared to relocate 12,000 civil servants to the city by September this year.
As at March, the initial phase of construction was 74 per cent complete, said the Nusantara authority. Ongoing work on the presidential palace and other essential infrastructure is expected to be completed within the next two months.
Meanwhile, in response to Susantono’s abrupt resignation, Widodo has appointed Minister of Public Works and Public Housing Basuki Hadimuljono as acting head of the Nusantara Capital City Authority. Deputy Minister of Agrarian and Spatial Planning Raja Juli Antoni has been appointed as his deputy.
This move is seen as an effort to maintain the project’s momentum for the relocation process and investment purposes.
On his official Instagram account, Widodo reassured the public that development will continue. He underscored his commitment by travelling to Balikpapan in East Kalimantan to oversee the progress.
On Tuesday, Widodo inaugurated a dam worth 836 billion rupiah (S$69.3 million) in Sepaku that is intended to serve as a crucial component of the water infrastructure supporting Nusantara, Kompas reported.
Indef’s Ahmad said that it would be highly challenging to cancel the Nusantara project, due to its formal legalisation. Revoking its legal standing would come with significant obstacles.
“The trajectory of Nusantara’s future now hinges on the approach of president-elect Prabowo (Subianto). He has to persuade both the public and investors that the government should really relocate to Nusantara after his inauguration in October,” he said.
Sitting on some 256,000 hectares of land on Borneo island, Nusantara is roughly four times the size of Jakarta and about three-anda-half times larger than Singapore.
The project is estimated to cost 466 trillion rupiah, which the government hopes can be funded largely by private investors. It is slated to be fully completed in 2045.
Established by Widodo in 2022, the Nusantara Capital City Authority is a government body tasked with the direct management and promotion of investments in the new capital. Its responsibilities include the formulation of investment policies aimed at fostering economic growth in the region.
The project has received a total investment of 47.5 trillion rupiah, with private investments – including from local conglomerates – accounting for 35.9 trillion rupiah.
Singapore investors have expressed the most interest so far, followed by those from Japan, China and Malaysia, based on data from the Nusantara authority.