Indonesia Launches Third Phase of New Capital Development

Jun 2024

Indonesia has launched the third phase of the Nusantara Capital City (IKN) project, which includes 25 project packages such as the construction of the National Police and Ministry of Defense offices. Danis Sumadilaga, Head of the IKN Infrastructure Development Task Force, announced a physical progress of 5.4% for phase three at the Ministry of Public Works and Housing on May 17, 2024.

The budget allocated for phase III development totals IDR 22 trillion, equivalent to approximately USD 1.5 billion. Overall, the three phases of the project are expected to cost IDR 74 trillion, roughly USD 5.1 billion, covering 96 project packages. Phase one, with a budget of IDR 24.8 trillion (USD 1.7 billion), includes projects like the State Palace, slated for completion by August in time for Indonesia’s Independence Day ceremony. Phase two, valued at IDR 27.6 trillion (USD 1.9 billion), has achieved completion rates of 82.5 percent and 31.3 percent, respectively.

Danis emphasized that future funding for IKN will increasingly come from investments to reduce dependence on the State Budget. Indonesian Investment Minister Bahlil Lahadalia acknowledged that thus far, the new capital Nusantara or IKN project has not obtained foreign investment. The Government stated that various issues, such as land clearance and environmental, social, and governance (ESG) issues, need to be addressed to attract more investments.

(Source: Tempo)

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