Indonesian President Joko Widodo announced the construction of a new capital city in the East Kalimantan province in an effort to decongest the country's capital, Jakarta, and deal with income disparity, Bloomberg News reported.
"We cannot continue to burden Jakarta and Java any more in terms of population density, congestion, pollution and water resources," Widodo reportedly said. "Jakarta will remain as the center of business, trade and services."
The development of the new capital city is expected to start by the end of 2020 while the capital's relocation will commence in stages starting 2024, the report said, citing Planning Minister Bambang Brodjonegoro.
Indonesia's Planning Ministry estimates the cost of relocating its capital at 466 trillion Indonesian rupiah, assuming the development of land spread over 40,000 hectares for approximately 1.5 million people, the report noted.
Some 180,000 hectares of land in the site picked for the new capital are state-controlled, Widodo reportedly said, adding that private-public partnerships and the government would finance the initiative.
As of Aug. 23, US$1 was equivalent to 14,210 Indonesian rupiah.
