Rumors about the budget for the Ibu Kota Nusantara (IKN) project being blocked have sparked widespread debate in recent days. Speculation circulating on social media suggests that construction of Indonesia’s new capital city might come to a halt due to financial constraints. Some even claim that President Prabowo Subianto has canceled the multi-trillion-rupiah project. But how accurate are these claims?
The controversy began after Minister of Public Works (PU) Dody Hanggodo revealed that no budget had been allocated for IKN in 2025. He explained that the ministry’s total budget had been slashed to IDR 29.57 trillion following an efficiency directive from President Prabowo.
“All infrastructure budgets have been blocked,” Dody said after attending a meeting with Commission V of the House of Representatives (DPR) at the Senayan Parliamentary Complex on February 6, 2024. “The progress is only enough to buy lunch for the minister.”
This budgetary decision follows Presidential Instruction (Inpres) No. 1 of 2025, which enforces spending efficiency in both the national and regional budgets. As a result, the Public Works Ministry’s total budget has been significantly reduced, leaving many to question the impact on IKN’s construction.
OIKN Responds: IKN Development Continues
Amid growing speculation, the IKN Authority (OIKN) stepped forward to clarify the situation. Speaking to the media on February 6, 2025, IKN spokesperson Troy Pantouw emphasized that the development of Nusantara remains on track and follows President Prabowo’s directives.
“The claim that Prabowo has halted IKN development is not true. As per the President’s instructions, the focus remains on completing the legislative and judicial office buildings along with their supporting infrastructure,” Troy stated.
He further explained that during a closed-door meeting between President Prabowo and OIKN Head Basuki Hadimuljono on January 21, the President reaffirmed his commitment to making Nusantara Indonesia’s political capital. He approved a five-year budget of IDR 48.8 trillion to ensure the project’s progress.
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This commitment was reinforced in a limited cabinet meeting on February 3, 2025, when Basuki announced that Prabowo had agreed to increase the IKN budget for this year. OIKN has been instructed to formally request the Minister of Finance to adjust the budget to the approved figures—IDR 6.3 trillion plus an additional IDR 8.1 trillion.
Stage Two of IKN Project Development Moves Forward
Despite concerns over budget constraints, the IKN Authority confirmed that construction has entered its second phase, covering the 2025–2029 period. This phase is crucial in preparing the infrastructure needed to establish Nusantara as Indonesia’s political capital by 2028.
Danis Hidayat Sumadilaga, Acting Deputy for Infrastructure at OIKN, reaffirmed that the project remains on course. “Development has now moved into Stage II, with efforts concentrated on preparing key infrastructure for the capital’s long-term vision,” he explained.
OIKN’s Director of Environment and Disaster Management, Onesimus Patiung, also emphasized that the budget efficiency measures taken by President Prabowo would not derail the project.
“The government is optimizing its budget to prioritize key targets. However, this does not mean IKN’s development will stop,” Onesimus stated.
He confirmed that construction of IKN’s three key components—the executive, judicial, and legislative complexes—remains active. The IDR 48 trillion budget for the second phase of development is still intact and will be utilized over the next five years.
“We continue working with a minimal budget,” he affirmed.
Despite initial concerns, the IKN project has not been abandoned. While budget adjustments have created uncertainty, government officials have reassured that the construction of Indonesia’s new capital city is progressing as planned. With continued support from President Prabowo and the necessary financial allocations in place, Nusantara remains on track to become Indonesia’s political center in the coming years.
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