The new capital city must have a low potential for social conflict, and its people are willing to accept outsiders. It must also meet the perimeter requirements of defense and security by being far from the border with other countries.
Based on these criteria, the remaining choices were Central Kalimantan, East Kalimantan, and South Kalimantan. The government has not yet determined the exact location of the new capital city, but Bappenas’ study shows that East Kalimantan has many advantages and few weaknesses.
“Yes, East Kalimantan. That’s right. But the specific location, I don't know yet,” Agrarian and Spatial Planning Minister Sofyan Djalil said at the Office of the Coordinating Economic Ministry in Jakarta, Thursday (8/22). According to him, three thousand hectares of land is being prepared for the first phase of construction from the total land area of 200-300 thousand hectares.
Cost of Relocating the Nation's Capital City
Bappenas’ study also shows two cost scenarios for the new capital city construction, which are based on the estimated number of the State Civil Apparatus (ASN) to be relocated from Jakarta.
The first scenario is to move 1.5 million state civil apparatus and their family members. This scenario requires 40 thousand hectares of land with an investment requirement of Rp 466 trillion. The second scenario is to move 870 thousand state civil apparatus and their family members. This scenario needs 30 thousand hectares of land with an investment requirement of Rp 323 trillion.
The government will likely choose the second scenario. Head of the State Civil Service Agency (BKN) Bima Haria Wibisana stated that not all state civil apparatus in the ministry would be relocated to the new capital city. “Those who move have nothing to do with public services,” he said.
President Jokowi ensured the relocation of the capital city to Kalimantan would not take up a large portion of the state budget. “We encourage the participation of the private sector, SOEs, and the public-private partnership [PPP/KPBU] scheme,” Jokowi said in his annual state of the nation address to elaborate the 2020 state budget plan (RAPBN) during the parliamentary plenary session last week.
In the Bappenas’ study, the state budget funds are said to have only reached 74.44 trillion of the total cost of Rp 466 trillion. The funds would be used for the construction of state palaces and strategic buildings for the National Army and Police, green open space, and land acquisition.
The remaining Rp 265.24 trillion could be obtained from the PPP project, while Rp 127.38 trillion may come from the private sector through the utilization cooperation scheme. Apart from those costs, SOEs would finance infrastructure development, such as airports, ports, and toll roads.
The National Development Planning Minister/Bappenas Head Bambang Brodjonegoro said the funds needed from the state budget reached Rp 93.5 trillion. “At least, about 19.2 of the total funds needed,” he said as a keynote speaker at the even of Youth Talks: Let’s Move the Capital City on Tuesday (8/20).
Bambang said the PPP scheme has a large portion in funding the relocation of the center of the government, which equals 54.6 percent of the total funding. Meanwhile, the private sector will bear the remaining 26.2 percent of the relocation funds.
According to him, a swap scheme is another funding source option. It is done in the form of the sale of assets in several locations in Jakarta. He estimated the potential sale of assets in Medan Merdeka, Kuningan, Sudirman, and Thamrin would generate Rp 150 trillion.
Capital City Relocation Phase
- 2017-2019: Preparation and initial study, social and economic population, land, design, and location determination. The study comes from Bappenas, the Agrarian Affairs and Spatial Planning Ministry, and the Public Works and Public Housing Ministry.
- 2020: Preparation of regulations and institutions, the city masterplan, and regional technical planning.
- 2021: Provision of land, preparation of regional design, and initial construction of the new capital city.
- 2022-2024: Development of the core area of the government and some areas of the nation’s capital city.
- 2024: Initial relocation of the capital city.