Indonesia's President Prabowo to spend $3 bln on new capital city through 2029

Indonesia's new President Prabowo Subianto plans to spend 48.8 trillion rupiah ($2.99 billion) through 2029 to build the new capital city "Nusantara", with a target of relocating the government there by 2028, the project's chief said on Tuesday.

Construction of the $32-billion Nusantara in the jungle of Borneo island, a legacy project first started by former president Joko Widodo, began in 2022 after years of delay due to the pandemic.

Widodo wanted to move the capital 1,200 km (745 miles) away from congested and sinking Jakarta in Java island, but analysts have predicted Prabowo would not be as ambitious as his predecessor for what could be a white elephant project.

Widodo spent 75.8 trillion rupiah between 2022 and 2024 on the project, data from finance ministry shows.

Nusantara authority chief Basuki Hadimuljono told reporters the next phase of construction would be focused on housing and office buildings for parliament and the judiciary as most offices for the executive branch of government were ready.

The government would still work to attract private investment to help build the city, he said, adding that Malaysian company Citadel Group and other investors will soon break ground for their hotel, housing and office building investment worth total 6.5 trillion rupiah.