New Capital City Bill Discussion Finished, Submission to DPR to Follow

TEMPO.CO, Jakarta - Deputy for Regional Development of the Ministry of National Development Planning (Bappenas) Rudy S. Prawiradinata said that the Bill concerning the State Capital City (IKN) has been finalized. The legal framework for the development of Indonesia's new capital city in East Kalimantan will soon be submitted to the House of Representatives (DPR).

"The IKN Law has been discussed between ministries and institutions," said Rudy to Tempo on Wednesday, August 25, 2021.

The IKN Bill has been included in the 2021 National Legislation Program (Prolegnas). At the end of the first semester of 2021, the DPR has not yet received a presidential letter or a presidential decree concerning the new capital city, therefore the legislative discussion concerning the matter has not been started. At that time, the government argued that they still require an actual field study to develop a law.

Discussions on the development of the new capital city have been postponed due to the Covid-19 pandemic. The budget for the development of the capital city is also has not been listed in the 2021 State Budget and 2022 State Budget.

However, recently President Joko "Jokowi" Widodo ensured that the development of the new capital city would continue. Jokowi has reviewed infrastructure projects tp provide access to the new capital city during his visit to Samarinda on August 24, 2021.

Rudy stated that although the development of the new state capital is not listed in the state budget, it does not mean that it will not be funded with the state budhet. "The state budget is still in process," said Rudy.

Based on the 2020-2024 medium-term development plan (RPJMN), the IKN project requires IDR 466.98 trillion. Referring to the development plan, the APBN will fund 19 percent of the total required budget. Meanwhile, the remaining 81 percent will be sourced from investors.

Rudy said that the government has several funding schemes for the development of the new capital city. In addition to the state budget, the government relies on the assets of state-owned enterprises, investors or the pure private sector, and the government's cooperation with business entities.

The government, said Rudy, will provide broad and open opportunities to all potential investors. "Currently, the concept of a cooperation structure is being drafted in accordance with the acceptance of investment risk from investors and financial institutions," Rudi explained.

FRANSISCA CHRISTY ROSANA | MAUDEY K. SETYAKUSUMA