Indonesia plans to move its capital from Jakarta to Nusantara and hold its Independence Day celebration there on Aug 17 next year, but it’s battling challenges from slow construction, illegal mining to lack of investments.
A huge bird with spread wings inspired by Indonesia’s emblem – the mythological bird Garuda – is supposed to be the design of the country’s presidential palace in its planned new capital Nusantara.
However, the Garuda has not taken shape nor flight yet, even as Thursday (Aug 17) marks exactly the start of a one-year countdown to the government’s move to the new city in 2024.
Instead, a four-storey wingless palace, the highest building so far in the 256,000ha Nusantara – roughly four times bigger than Jakarta and three times bigger than Singapore – remains under construction and is only about 20 per cent ready.
As a result of the time pressure, thousands of construction labourers are working around the clock to finish the structure and a few other buildings.
During a recent CNA visit, dozens of trucks carrying goods could be seen making their way on newly cemented roads to several construction sites in Nusantara, which is located in the middle of Kalimantan’s lush forests.
The dust-covered tree leaves in the forest are a testament to hectic construction efforts in the country’s future capital, which is dubbed a green and smart city.
While there are concerns that the proposed move on Aug 17 next year may not be on track and plans to mark the country’s Independence Day at the Garuda-inspired palace could be scuppered, local officials are striking a confident note.
“Aug 17, 2024, the president and a few invitees will celebrate (Indonesia’s independence day) there,” said Mr Bambang Susantono, head of Nusantara Capital Authority, at an event in Jakarta on Aug 10.
“We really want to show that Nusantara will incorporate people, nature and culture. So it will be smart, green and inclusive.”
FIVE-STAGE CONSTRUCTION PLAN
With an estimated cost of US$32 billion, Nusantara, which is deemed necessary in order to save sinking and congested Jakarta as well as to enhance development in Kalimantan and eastern Indonesia, will be constructed in five stages.
The first phase, comprising the palace’s construction, a few ministries and basic infrastructures such as roads and housing, is scheduled for completion by 2024.
The last stage of Nusantara’s construction is scheduled to be ready by the country’s centennial in 2045, where it will be connected with surrounding cities such as Balikpapan and Samarinda.
According to the Ministry of Public Works and Housing, the builder of the new capital, the first phase is just about 38 per cent ready.
“There are many challenges, such as with the supply chain, weather, and others,” Mr Danis Sumadilaga told CNA on Tuesday. He is the head of the task force responsible for Nusantara’s infrastructure development.
The project – often considered President Joko Widodo’s legacy before he steps down next year – also faces other issues.
As CNA saw during its visit, illegal mining is a pervasive issue in resource-rich eastern Kalimantan, and the government is also struggling to get more investments.
ILLEGAL MINING RAMPANT
When Mr Widodo announced in August 2019 that the capital would move from crowded, polluted metropolitan Jakarta on the country’s main island Java to a rural area in eastern Kalimantan, he said it was necessary.
“Why the urgency now? Because we cannot let Jakarta and Java island continue to carry the burden that is getting heavier from population density, severe traffic jams and air and water pollution that need to be tackled,” he said back then.
This month, according to Swiss air quality technology company IQAir, Jakarta topped the list as the world’s most polluted city, consistently ranking among the ten most polluted cities globally since May.
As Jakartans screamed for a solution, President Widodo cited moving the capital to Nusantara as one of the answers.
After all, Nusantara was designed as a green city, and the government claimed over 75 per cent of the government area in the new capital would remain green.
However, contrary to green principles, non-governmental organisation Mining Advocacy Network JATAM, noted there are at least 160 illegal mining sites in East Kalimantan. Almost 70 of them are in Nusantara’s outer area.
These are mostly coal mines deemed damaging to nature. JATAM also noted that there have been more than 40 incidents in the last 12 years where people fell into coal mining pits and died.
“The community will suffer due to the illegal mining. There will be a prolonged crisis starting from floods, landslides, and increasing surface temperature, so there will be many fire hotspots,” said Mr Pradarma Rupang, an advisor with JATAM.
“And people’s economy will also be affected. Some mines are in local people’s estates,” he claimed.
In certain parts of Kalimantan, it is common for locals to own land plots and leave them uncultivated and unattended.
Mr Rupang added: “The miners mine in people’s territory, which they intrude without the owners’ knowledge … so illegal mining harms the country economically and environmentally”.
Indonesia gets the majority of its electricity from fossil fuels, with coal generating most of it. East Kalimantan is a major coal producer, and the mining there is primarily dominated by coal mining. CNA saw a few illegal mining in the outer part of Nusantara in forests. A few of them were even in nature conservation areas.
The government is aware of this, with Mr Achmad Jaka Santos Adiwijaya, secretary of the new capital Nusantara, saying they will tackle the problem.
“If a business license is still valid, but deemed not in accordance with the development of Nusantara, then when the license expires, it will not be extended,” he said.
“If there are illegal activities, law enforcement will be carried by the Nusantara authority and law enforcement.”
Nevertheless, Mr Piatur Pangaribuan, a law lecturer at Balikpapan University and a practising lawyer handling corruption cases, said it is not a small problem.
Illegal mining has existed there for at least 15 years, and it has been hard to curb as the practice often involves people with power, a view Mr Rupang also shared.
Mr Pangaribuan said: “There needs to be a synergy (between various institutions). And the national police chief and the supreme court must put a local police chief who has guts, or the problem will never be resolved.”
STILL LOOKING FOR INVESTORS
Another matter the authority is currently trying to tackle is securing investments since it is still using the state budget to build the first phase.
During an event to promote Nusantara to university students in Samarinda, head of Nusantara Capital Authority Mr Susantono was unwilling to share the amount of investments they have secured.
“Please wait for two weeks, until after independence day. Then we will reveal it because there will be a few updates.
“There will be a few companies which, god willing, will invest,” Mr Susantono said on Aug 7.
When asked how many countries have shown interest in investing, he said: “A lot, but they need time … And we are also preparing the land, and they are looking at it.
“God willing, this month, we will see not only the acceleration of construction work that uses the state budget but also construction work using private investment.”
Earlier this year, Malaysian Prime Minister Anwar Ibrahim visited Indonesia on his first official visit, during which he promised to make a more positive and aggressive effort in the development of Nusantara as it would also benefit the Malaysian states of Sabah and Sarawak.
But Mr Adiwijaya, the secretary of Nusantara, told CNA that as of early August, no country had inked a deal to show their commitment to investing in the future city.
However, he said there had been some non-disclosure agreements (NDAs) inked, such as between the Nusantara Authority and Singapore’s JOE Green Pte Ltd and State Power Investment Corporation (SPIC).
“We can’t really say it’s 100 per cent commitment, but when people sign NDAs and conduct feasibility studies, it means the commitment is already advanced.
“Investing is not like selling fried snacks in front of a minimarket. They must see the land’s size, contour, and techniques to build a building foundation. This is a long process,” he said.
Earlier In June, Jokowi had promoted Nusantara during Singapore’s Ecosperity week. He assured business people that whoever will lead Indonesia in the future will focus on turning Indonesia into a powerhouse and giant of Asia.
“So everything will be fine, no need to worry, your investment in Indonesia will continue to be safe,” he stated.
Jakarta-based economist Bhima Yudhistira from the Center of Economic and Law Studies said the political uncertainty is among the reasons behind the lack of investments.
He said it is not normal that there are only NDAs and letters of intent inked at this stage with one year to go before the planned move.
“So far, investors are hesitant that the Nusantara project will go ahead because the law about Nusantara is currently being revised, and there will also be elections, so there are uncertainties about policies.
“If the next president wants to build it, but it will be a palace to just rest, what then? So there are uncertainties. And this is a long-term investment, so the risk is high,” he said.
Despite the challenges, some are optimistic and enthusiastic about the new capital.
Jakarta local Mdm Herawati, who was visiting Nusantara with her daughter-in-law living in Balikpapan located about a 1.5-hour drive away, said she was excited to see the development of the proposed capital.
“We always monitor the development from the news, but we are curious and want to see first hand, and this was my aim to go to Balikpapan here,” said Mdm Herati, speaking to CNA at point zero, a geodesy site in Nusantara open to the public during weekends.
“Based on the construction work and that the labourers work day and night, I think they will have it ready on time,” said Mdm Herawati, who goes by one name.
Meanwhile, her daughter-in-law Susanti is fascinated by the development.
“I think it will be done on time because we can already see the building, which will be the future palace.”
Source: CNA, 17 Aug 2023