A general view shows the presidential palace during celebrations marking Indonesia's 79th Independence Day in the future capital Nusantara in East Kalimantan, on August 17, 2024. — AFP/VNA Photo

JAKARTA — The Public Works Ministry has announced that the government will lift a temporary freeze on funding for national strategic projects, including those earmarked for the development of the future capital city Nusantara in East Kalimantan.

Public Works Minister Dody Hanggodo characterised the plan, floated by President Prabowo Subianto’s administration, as part of “unfinished budget politics dynamics”.

“It [the spending freeze] does not exclusively involve [the future new capital]. We are familiar with budget politics, right?” he said in Jakarta on Friday, as reported by Kompas.

He went on to say that the discussions and settlement process with House of Representatives Commission V, which oversees infrastructure and transportation, as well as with the Finance Ministry were progressing well.

With the assurance that there will be no budget freeze, the development of key strategic projects in Nusantara, such as the Tripraja Axis and the legislative and judicial areas, are expected to proceed according to schedule.

The government remains optimistic that the newly built city will officially become Indonesia’s political capital by 2028.

Dody said the government would expedite processes and budget disbursement to ensure that the capital city’s development would proceed as planned.

Deputy Public Works Minister Diana Kusumastuti and several directors general are scheduled to visit the under-construction city.

“The deputy minister and several directors general will visit [Nusantara] to identify what [processes] could be accelerated,” Dody said, as reported by Kompas.

In January, President Prabowo ordered sweeping budget cuts for all ministries and government agencies, aiming to accumulate Rp 306 trillion (US$18.15 billion) to fund his administration’s costly priority programs, particularly the free nutritious meals program for 82.9 million school children, pregnant women and other beneficiaries. The government has allocated Rp 71 trillion to the programme for the 2025 fiscal year.

The Public Works Ministry, which is also responsible for Nusantara’s development, saw its budget slashed from more than Rp 110 trillion to just over Rp 29 trillion.

Meanwhile, the new government set aside around Rp 48 trillion for Nusantara’s development until the end of Prabowo’s term in 2029, marking a decline from the Rp 75 trillion budget allocation between 2022 and 2024 in Jokowi’s administration.

Divided into several stages of development until 2045, the future capital city will require an estimated Rp 466 trillion to build, of which only about 20 percent, or Rp 93 trillion, is expected to come from the state coffers, leaving the lion’s share to the private sector.

As of late 2024, private investment amounted to Rp 58.4 trillion, Rp 51 trillion of which was domestic investment, falling short of the Rp 100 trillion target set for the year. — THE JAKARTA POST/ANN