Indonesia’s investment on a mega project to relocate its capital city has been put on hold, as the country shifts focus to spend on containing the coronavirus outbreak, but may resume next year.
The $33 billion project to relocate the capital of Southeast Asia’s largest economy out of the main Java island to the island of Borneo has yet to be approved by the parliament.
However, the government had already allotted some funds for land acquisition this year. The public-works ministry, which is responsible for the project, has reallocated most of its spending, including the portion allocated for infrastructure projects, for the COVID-19 outbreak response.
However, Indonesia’s planning ministry is going ahead with a tender for the masterplan of the new city, which is yet to be named and will be built in a remote area in East Kalimantan province, close to the port city of Balikpapan.
The original timeline for the project is for the government to seek parliamentary approval this year and begin basic construction. Civil servants are expected to pack up and start moving by 2024.
Covid-19 pandemic caused to shift state spending to make room for a greater allocation on healthcare and welfare amid an outbreak, which has so far infected 7,775 people and caused 647 deaths in Indonesia.
Jakarta, the current capital, is now home to 10 million people and is prone to floods, traffic gridlock and faces the risk of earthquakes. Among other reasons, the East Kalimantan site was selected since it is a well-known part of the archipelago that is least prone to natural disasters.