New chapter of IKN development
This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.
Investor Daily - Babak baru pembangunan IKN
17 April 2025
By Heru Febrianto
Jakarta, ID — The development of Nusantara Capital City (IKN) in North Penajam Paser Regency, East Kalimantan, has entered a new chapter. The Nusantara Capital City Authority (OIKN) has announced that the IKN Phase II development, with a budget allocation of Rp48.8 trillion, has commenced.
The Head of the Nusantara Capital City Authority (OIKN), Basuki Hadimuljono, stated that the IKN Phase II development for the 2025-2029 period has begun, in an effort to establish Nusantara as the political capital.
"The IKN Phase II development process has now started. The tender process, management handover, and subsequent work implementation will commence shortly," Basuki said in his statement as quoted in Jakarta on Wednesday (16/4/2025).
As previously known, President of Indonesia Prabowo Subianto, during a limited meeting discussing IKN developments in late January 2025, approved a budget allocation of Rp48.8 trillion to continue IKN development during the 2025-2029 period.
This allocation from the State Budget (APBN) will be used to complete several infrastructure developments in IKN. These include completing the legislative and judicial complexes, supporting ecosystems, and opening access to IKN Planning Area 2.
This substantial budget will also be used to maintain and manage existing IKN infrastructure and facilities, as maintenance is crucial for keeping assets in good condition.
In addition to the Rp48.8 trillion allocation, OIKN also has programmes funded through Public-Private Partnerships (PPP) valued at Rp60.93 trillion, which will be used to construct 97 apartment towers and 129 landed houses.
Furthermore, there are six PPP projects for constructing roads and multi-utility tunnels (MUT) spanning 138.6 kilometres in the Central Government Core Area (KIPP), which are currently partially under construction, and one PPP project for a solar power plant.
IKN development continues
In continuing IKN development, on Tuesday (15/4), OIKN held an Infrastructure Development Coordination and Evaluation Meeting with the Public Works Ministry, Housing and Settlements Ministry, consultants, and construction service providers.
The meeting took place in the Multipurpose Room of the Coordinating Ministry Office 3 at KIPP Nusantara, aiming to enhance synergy and strengthen coordination among stakeholders, including evaluating all infrastructure work packages that have been completed, are ongoing, or are about to commence.
During the occasion, Basuki emphasised the importance of maintaining development momentum amidst national policy dynamics. "We want to maintain strong spirit. We need to rejuvenate the infrastructure development spirit in IKN," he stated.
Furthermore, Basuki conveyed that future development work would be completed through ministerial governance. He also emphasised IKN Authority's commitment, along with all stakeholders, to continue IKN development.
"I believe there is no reason not to continue development. President Prabowo has also stated that IKN development and budgeting are included in the National Strategic Projects (PSN)," he affirmed.
Therefore, Basuki emphasised the importance of maintaining development momentum amidst national policy dynamics, ensuring his agency continues to foster strong spirit among all relevant parties for infrastructure development in IKN.
Meanwhile, urban infrastructure expert Yayat Supriatna said President Prabowo's administration continues to show goodwill by providing hope for continued IKN development. According to Yayat, he has been optimistic from the start that IKN would continue as it carries the concept of capital city relocation that has been planned since former president Soekarno's era.
"I have been optimistic from the start that this project would continue, despite numerous dynamics. However, the process is not immediate due to global economic conditions affecting the nation, which results in budget efficiency," he told Investor Daily.
He added that funding support beyond the State Budget must also be realised. "Most importantly, to ensure certainty, there must be a signal from the President to sign the bill for civil servant relocation to IKN, as this also provides certainty for investors beyond state-owned enterprises," he concluded.
Refuting stagnation claims
Previously, East Kalimantan Governor Rudy Mas'ud refuted circulating claims about the stagnation of IKN development. According to Rudy, his agency has conducted direct inspections and confirmed that construction continues to progress.
"It is not true that IKN is stagnating. Yesterday, on the seventh day of Eid, I quietly visited the site and found that construction is still progressing. I was even impressed by visitors' enthusiasm to witness the development of IKN firsthand," Rudy said, as quoted by Antara.
Rudy explained that tourist interest in the Central Government Core Area (KIPP) of IKN remains high. According to IKN Authority data, the number of IKN visitors from 27 March 2025 to 5 April 2025 exceeded 64,000 people. This figure increased significantly after Eid al-Fitr, peaking on Thursday, 3 April 2025, with 14,104 visitors in a single day.
IKN Authority’s Deputy for Development Control, Thomas Umbu Pati Tena Bolodadi, explained that visitor numbers continued to rise after Eid al-Fitr and reached their peak.
"Statistically, on 1 April, we had 8,219 visitors, increasing to 12,958 on 2 April, peaking at 14,105 on 3 April, and recording 10,215 visitors yesterday (4 April 2025). Today (5 April 2025), we have already received 12,307 visitors," Thomas stated separately.
According to Thomas, the Central Government Core Area of IKN is open to the public so that people can witness Nusantara's development progress firsthand.
Visitors come from various regions across Indonesia and from overseas, including Brunei, Malaysia, China, Europe, and South Korea. They visit to observe the ongoing IKN development process as part of Indonesia's transformation towards its political capital.
"Visitor numbers are very high, not only from Kalimantan. We have recorded visitors from outside Kalimantan, such as Java, Sulawesi, and various regions, even from Brunei Darussalam, Malaysia, South Korea, and Europe, during the 2025 Eid al-Fitr holiday," Thomas said.
To realise Nusantara as a liveable and loveable city, urban accessibility remains a top priority. This includes the Balang Island Bridge, which serves as the ecosystem’s functional route to Nusantara and is notable as Indonesia's second-longest cable-stayed bridge after the Suramadu Bridge in Surabaya. Additionally, IKN Toll Road Sections 3A, 3B, and 5A are open one-way specifically for Class I vehicles (sedans, jeeps, and minibuses) as an alternative route during Eid and for access to IKN.
Furthermore, healthcare access is available through several medical facilities in IKN, such as Hermina Hospital and Mayapada Hospital Nusantara. Comfortable accommodation options like Swissôtel Nusantara and Hotel Qubika are also operational, offering options for visitors from distant cities to stay overnight or enjoy lunch or dinner.
