The development of IKN Nusantara Has Consumed Rp72.1T from the State Budget

Jokowi Envisions Nusantara Capital as Large-Scale Concert Hub and Digital Nomad Haven
Jokowi Envisions Nusantara Capital as Large-Scale Concert Hub and Digital Nomad Haven (photo: setpres)

The development of Indonesia’s New Capital City (IKN Nusantara) has been a significant financial endeavor, drawing from the national coffers to the tune of Rp72.1 trillion since 2022. Sri Mulyani Indrawati, the Minister of Finance, shared these insights, breaking down the expenditure over the years.

In 2022, expenditures reached Rp5.5 trillion, followed by Rp27 trillion in 2023, and a substantial allocation of Rp39.6 trillion this year. Overall, the state budget disbursed for IKN Nusantara totaled Rp72.1 trillion, indicating a considerable commitment to this monumental project.

A substantial portion of this budget, amounting to Rp2 trillion or 65% of the total, was allocated for non-infrastructure spending. Minister Sri Mulyani elaborated on this aspect, highlighting various planning, coordination, and preparation activities related to the relocation of IKN.

However, the realization of funds for IKN’s development tells a different story. Out of the allocated Rp39.6 trillion, only Rp4.3 trillion has been realized so far, representing a mere 10.9% utilization of the budget set aside for this purpose.

Breaking down the realized expenditure, Minister Sri Mulyani revealed that Rp2.3 trillion was allocated specifically for infrastructure development, out of a total infrastructure budget of Rp36.5 trillion. This means that only 6.4% of the infrastructure budget has been utilized in the first quarter of the year.

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Despite the modest realization figures, progress in physical development has been noted, with a 13.5% completion rate observed. Various construction projects, including buildings in the presidential palace area, coordinating ministry buildings, and infrastructure such as toll roads, bridges, hospitals, and airports, are underway.

Moreover, the allocated funds are also being utilized for promotional activities, policy recommendations, mapping, security measures, and operational expenses related to IKN. These efforts underscore the comprehensive approach taken to ensure the successful realization of Indonesia’s New Capital City.

Looking ahead, Minister Basuki Hadimuljono of the Ministry of Public Works and Public Housing disclosed plans for ministerial relocation, with completion expected by June 2024. He also mentioned the intention to relocate alongside other key ministers, including the Ministers of Transportation and Health.

However, uncertainties remain regarding the relocation of the Minister of Finance, Sri Mulyani Indrawati, to the new capital in East Kalimantan. With preparations and construction progressing steadily, the nation eagerly anticipates the realization of this ambitious endeavor.