PUPR Allocates $4.5 Billion for Initial Phase of New Capital City Development

infrastructure projects

The Ministry of Public Works and Housing (PUPR) has allocated a budget of $4.5 billion or Rp 62 trillion for the initial stage of construction of the new Indonesian capital city (IKN) from 2022 to 2024.

The allocation will be used for 63 construction projects, with several contracts already absorbing $1.58 billion.

PUPR Director General of Cipta Karya, Diana Kusumastuti, stated that all the allocations for the construction projects come from the government budget.

To continue the IKN megaproject, the government is welcoming investors to participate in the construction through a Public-Private Partnership (KPBU) mechanism.

The IKN Authority (OIKN) will welcome investors to help clarify the preparation steps, construction, relocation, and management of IKN.
Diana said that besides the presence of OIKN, the Indonesian government ensures investment security in the IKN megaproject through strong legal foundations, namely Law Number 3 of 2022 regarding the new Indonesian capital city.

“The first phase of the IKN development will take place from 2022 to 2024, with a focus on the Planning Region I or the Central Government Core Area (KIPP) covering 6,671 hectares. Of this area, 49% (3,271 ha) will be preserved as a forest area,” she said.

During a recent event in Tokyo, Diana, representing the Minister of PUPR, Basuki Hadimuljono, invited Japanese investors and business partners to invest in the IKN project.

She explained that the KIPP planning region is divided into three zones: Zone 1A (Core Government), Zone 1B (Government-Education-Housing), and Zone 1C (Government-Health-Housing). All construction will be carried out using Building Information Modeling (BIM) and Geographic Information System (GIS) technology.

In another hand, the Chairman of the IKN Infrastructure Development Task Force, Danis Hidayat Sumadilaga, also presented details on IKN construction, including design concepts, land use, zoning development, and the provision of basic infrastructure such as roads, clean water, sanitation, waste management, and key government facilities.

Danis added that the development of IKN as an urban ecosystem will truly meet the quality values of an integrated city, including functional, visual, and environmental parameters towards the Smart Forest City IKN.

“The Ministry of PUPR has started building various infrastructures in IKN as evidence of the government’s commitment to building the new capital city,” he said.