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Indonesia to relocate capital from Jakarta to Borneo island

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JAKARTA Indonesia plans to move its capital to Borneo island from Jakarta, President Joko Widodo said yesterday.

He said it was urgent that relocation plans commence, although the capital would not be physically relocated until 2024.

The new capital, which does not yet have a name, would be located in Borneo's East Kalimantan province, near the existing Samarinda City and the port city of Balikpapan, important for coal and oil shipments.

"It is a strategic location at the centre of Indonesia, close to a growing urban area," Mr Joko told a news conference at the Jakarta state palace.

He said moving the capital would cost 466 trillion rupiah (S$45 billion), of which the state would fund 19 per cent, with the rest from public-private partnerships and private investment. The price tag includes new government offices and homes for about 1.5 million civil servants.

The President had earlier this month proposed to Parliament that the country's administrative centre be moved to Kalimantan, the Indonesian side of Borneo island, a region known for rainforests, coal mines, orangutans and home to just over 16 million people.

Environmentalist groups, however, have expressed fears that building a new capital amid swaths of forests in Borneo could imperil the habitats of endangered wildlife.

The jungle island is home to endangered species, including orangutans, sun bears and long-nosed monkeys.


Jakarta is one of the world's most densely populated cities, home to more than 10 million people and three times that number when counting those who live in surrounding towns.

The city is prone to floods and is sinking due to subsidence, caused by millions of residents using up groundwater.

Mr Joko said the burden on Jakarta and Java island was already too heavy, with the island home to 54 per cent of the 260 million population and generating 58 per cent of Indonesia's gross domestic product.

The government will submit a bill, and the result of a feasibility study, to Parliament soon to obtain approval for the new capital, Mr Joko said.

Planning Minister Bambang Brodjonegoro said land acquisition would start in next year.