China, US among Countries Offering to Help Indonesia Build New Capital

joko-borneo.jpg A motorcade transporting Indonesia President Joko “Jokowi” Widodo and other officials travels in Indonesia’s East Kalimantan province on Borneo island, where the government plans to construct a new capital city, Dec. 17, 2019.
Indonesian Presidential Palace handout/AFP

Indonesian officials are welcoming offers from China, Japan and the United States to help build the Southeast Asian nation’s “smart and green” new national capital on Borneo island, a project expected to begin later this year.

The involvement of foreign consultants, including those from the three countries, is needed to attract investors to the project, said Danis Hidayat Sumadilaga, director general of human settlements at the Ministry of Public Works.

“There have been offers from Japan, China and the United States. We welcome all of them,” Danis told BenarNews, an RFA-affiliated online news service.

Foreign involvement could “enrich the existing design so that it becomes more attractive,” he added.

China is seeking a role in designing urban landscapes and water management, while the U.S. wants to help build infrastructure such as roads and bridges, Danis said. Meanwhile, Japan has expressed interest in building the future city’s transportation and energy system.

Danis said the Coordinating Ministry for Maritime and Investment Affairs was vetting the proposals from the three countries. While he did not name companies that would participate in the project, he said they had been involved in infrastructure projects in Indonesia and had good track records.

Adam Boehler, the chief executive officer of U.S. Development Finance Corp. (DFC), is to visit Jakarta this week and could discuss investment opportunities in the infrastructure sector, according to an official at the American embassy who declined to be identified or release additional information.

In a statement, the embassy said Boehler was scheduled to meet regional business leaders and senior government officials during his visit to Asia, which includes stops in Japan and Vietnam. The DFC is an independent government agency that provides financing for development projects.

Officials at the Chinese and Japanese embassies could not immediately be reached for comment.

In 2019, Indonesian President Joko “Jokowi” Widodo announced that the country would move its capital from traffic-choked and crowded Jakarta to a location on Borneo, citing lower risks of natural disasters such as earthquakes, tsunamis and volcanic eruptions as among considerations.

Government officials hope to start moving the capital to an area in East Kalimantan province in 2024, the last year of Jokowi’s second and final term in office. Basic infrastructure construction such as roads, dams and irrigation could begin in the second half of 2020, officials said.

‘Looking for smart ideas’

The new city is expected to cost 466 trillion rupiah ($33.5 billion) to build with part of the funding coming from public and private partnerships.

Last month, the Public Workers Ministry announced three winners of a contest to design the new environmentally sustainable capital.

“We are looking for smart ideas,” said Suharso Monoarfa, the head of the National Development Planning Board (Bappenas).

Bappenas gave the designers six months, starting this month, to prepare the masterplan with the help of foreign and local consultants picked by the government, Suharso told BenarNews.

The Coordinating Minister for Maritime Affairs and Investment, Luhut Binsar Pandjaitan, said he had picked consultants from China and Japan to assist with the initial design work, national news agency Antara reported. He said experts from other countries might join the project later.

Luhut said Japanese investment giant SoftBank Group had offered to invest $100 billion in the new capital and its chief executive Masayoshi Son was scheduled to visit Jakarta on Friday.

“It’s too good to be true, but it’s ongoing and we are working on it. I told him that we are asking for only $25 billion and that’s more than enough for the next five years,” Luhut told Antara this week.

In addition to the SoftBank pledge, the United Arab Emirates said it planned to contribute to an Indonesian sovereign wealth fund to finance infrastructure projects in the new capital, Jakarta’s ambassador to UAE told, an Indonesian news portal.

Jakarta, with a population of 10 million people – or 30 million including its satellite cities – is grappling with frequent flooding and traffic congestion. As much as 36 percent of Indonesia’s current capital could be underwater by 2050 mainly because of mass extraction of groundwater, according to a study by the Bandung Institute of Technology.

Still, some environmental activists have criticized the planned move to Borneo, warning that building a new city in the middle of a forest could harm the environment, including endangered species such as orangutan.

Reported by BenarNews, an RFA-affiliated online news service.


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