Borneo Forest Emerges Frontrunner to Replace Jakarta as Capital
Borneo Forest Emerges Frontrunner to Replace Jakarta as Capital
(Bloomberg) -- A national forest on the island of Borneo has emerged as the frontrunner to be the location of Indonesia’s new capital as the government eyes billions of dollars in potential savings over land acquisition costs.
With 68,000 hectares of government land readily available, Bukit Soeharto in East Kalimantan is now a favorite on President Joko Widodo’s shortlist of sites, according to Governor Isran Noor. With easy access to two international airports, it also meets the main criteria for the new capital set by the president, including being largely free from risk of natural disasters such as earthquakes or floods, Noor said.
"I have talked to the president and he’s said ‘it’s 90% going to be East Kalimantan.’ It’s in the middle of Indonesia and already has all the infrastructure in the vicinity,” Noor said in an interview Wednesday. “East Kalimantan is a strong candidate for the new capital as we fulfill almost every criteria,” he said.
Jokowi, as Widodo is known, is set to announce his pick later this month, less than four months after unveiling a plan to relocate the administrative headquarters from the overcrowded and congested Jakarta. With the president saying his shortlist includes three sites on the island of Borneo, known in Indonesia as Kalimantan, speculation has mounted days over the exact location amid estimates the move could cost as much as $33 billion over a decade.
Escaping Gridlock
While moving Indonesia’s administrative center has been discussed periodically for decades, there is now a sense of urgency as Jakarta fast approaches total gridlock. The greater Jakarta area is already home to 30 million people, with the traffic congestion estimated to cost 100 trillion rupiah ($7 billion) a year in lost productivity.
The president may announce his choice during an annual address at a joint session of the parliament on Aug. 16, Noor said. Locations in Central and South Kalimantan are also in the reckoning, Planning Minister Bambang Brodjonegoro said Tuesday.
Jokowi has cited Malaysia, South Korea, Brazil and Australia as examples of where a nation’s development had been a factor in deciding the location of the capital. With the relocation, the president also aims to ensure a wider distribution of wealth beyond island of Java, which currently makes up more than 50% of the national economy and is home to almost 60% of the population.
The cost of moving the capital is estimated at 466 trillion rupiah if it involved development of 40,000 hectares of land for an estimated 1.5 million residents, according Planning Ministry estimates. The cost could be whittled down to 323 trillion rupiah if only part of the state apparatus was shifted to an area of 30,000 hectares, it said in April.
Noor said land was available to the east and west of the Bukit Soeharto national park, also home to an orangutan conservation center, and that only about 30% of the park would be used for the new city. He said East Kalimantan would score high with city planners as it falls outside the Ring of Fire, an area in the Pacific Ocean basin that’s prone to earthquakes and volcanic eruptions, and is also free from ethnic strife.
The provincial government is committed to conserving the natural forest areas, Noor said, adding authorities may have to cut down some trees but will try to minimize damage.
The tropical rain-forests in Kalimantan are home to orangutans, sun bears, clouded leopards, porcupines, gibbons, anteaters, sambar deers and Bukit Soeharto national park has emerged as a center for the rehabilitation of plants such as acacia, sengon and macaranga.
The government plans to begin construction of the new city from 2021 and may start relocating some offices from 2024, according to Brodjonegoro. The project will be financed by the government as well as through private-public partnerships.
--With assistance from Hannah Dormido.
To contact the reporter on this story: Arys Aditya in Jakarta at aaditya5@bloomberg.net
To contact the editors responsible for this story: Thomas Kutty Abraham at tabraham4@bloomberg.net, Karlis Salna
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