Jokowi Scouts Sites as Indonesia Capital Move Gathers Pace

(Bloomberg) -- Indonesian President Joko Widodo arrived in Borneo island to survey possible locations for a new capital, fast-tracking a plan to move the administrative headquarters out of over-crowded and congested Jakarta.

Widodo, known as Jokowi, arrived at Balikpapan city in East Kalimantan on Tuesday and visited Bukit Soeharto, one of the locations being considered for the capital, his office said in a statement. The president is scheduled to visit Palangkaraya in Central Kalimantan province and review another possible site for the capital on Wednesday, it said.

Jokowi last week revived the decades-old plan to set up a new capital as the population in Jakarta and its suburbs continues to swell, having hit about 30 million people. Already one one of the world's most congested cities, the coastal metropolis is also sinking by as much as 6 inches every year and is hit by frequent flooding.

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While the selection of the site for a new administrative capital may be several months away, town planners and political analysts have been pointing to Palangkaraya, the capital of Central Kalimantan. The city of about 260,000, which is relatively free from natural disasters and located near the centre of the vast archipelago, has been mooted as an option for a new capital since the 1960s.

Serious Intention

In a meeting with heads of state agencies on Monday, Jokowi said the government was serious about moving the capital by zeroing in on three alternatives. The area of the shortlisted sites ranged from 80,000 hectares to 300,000 hectares, he said.

Bukit Soeharto was among the locations under government's consideration for the past year and a half, Jokowi said, adding its proximity to airports in Balikpapan and Samarinda and toll roads will be supportive.

“The most important thing is Indonesia as a big country wants to have an administrative center that is separated from economic, business, trading and services center,” Jokowi said. “We want to move ahead as an advanced country.”

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Building a new capital may take between five to 10 years and cost as much as $33 billion, according to Planning Minister Bambang Brodjonegoro. With the capital moving out of Java island, Jokowi expects to ensure economic development of its far-flung regions. The government estimates the greater Jakarta area loses 100 trillion rupiah ($7 billion) a year in lost productivity because of its endemic traffic congestion.

The government will devise a special arrangement to finance the setting up of the new capital to avoid any strain on the state budget, Jokowi said. Availability of clean drinking water will be a major consideration in picking the new site, the president said.

To contact the reporter on this story: Tassia Sipahutar in Jakarta at ssipahutar@bloomberg.net

To contact the editors responsible for this story: Thomas Kutty Abraham at tabraham4@bloomberg.net, Karlis Salna

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