Indonesia: No Budget Allocated for New Capital City Project in 2021

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Despite the economic downturn caused by the Covid-19 pandemic, the government is slated to begin construction of the new capital city in North Penajam Paser regency, East Kalimantan, as scheduled in 2021.

Public Works and Housing Minister Basuki Hadimuljono said on Wednesday as quoted by kompas.com, we are still in the planning phase. We're currently focusing on the basic design of the new capital city and drafting a capital city relocation bill with the House of Representatives. We hope next year we can commence construction of the new capital city.

Basuki explained that the government had cooperated with domestic and foreign investors for the capital city relocation project. The government can't work alone [in this project], so it's important to collaborate with private sectors from other countries. The new capital city would adopt smart city technology and be eco-friendly.

The Public Works and Housing (PUPR) Minister Basuki Hadimuljono ensured that there was no budget for the physical construction of the new capital city in East Kalimantan in 2021. The government was only drafting the relocation plan. The ministry’s task force is still preparing the plan of the new capital relocation. There is no budget for the physical development yet.

According to Basuki, the government did not allocate a budget for the project in 2021, too. For a detailed explanation related to the project, it could be obtained from the National Development Planning Agency (Bappenas). Bappenas is the authority who decides the continuation [of the development project of the new capital.

Previously, National Development Planning Minister or Bappenas Head Suharso Monoarfa asserted that the plan to relocate the capital city to Penajam Paser Utara, East Kalimantan, was suspended.

Suharso said, until now, the program of new capital is still in the hold. However, Bappenas kept supporting the preparation, as well as the master plan and construction of basic infrastructure.