New capital city: Prabowo adjusts budget for IKN Nusantara

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.

Bisnis Indonesia - Ibu kota baru: Prabowo sesuaikan anggaran IKN Nusantara

25 October 2024

By Alifian Asmaaysi and Dany Saputra

Bisnis, Jakarta – The administration of President Prabowo Subianto and Vice President Gibran Rakabuming Raka is committed to ensuring the continuity of the Nusantara Capital City (IKN) megaproject, albeit with several adjustments.

Coordinating Minister for Infrastructure and Regional Development, Agus Harimurti Yudhoyono, stated that the IKN project would continue, but with reduced development intensity.

“I reiterate that IKN must be adjusted every 5 years, in accordance with its development priority roadmap,” he explained in Jakarta on Wednesday (23/10).

Agus mentioned that the administration of President Prabowo would adjust the budget allocation for the IKN project. However, he was reluctant to specify the budget allocation.

This indicates that the government’s budget allocation for IKN will be less than it was during the administration of President Joko Widodo (Jokowi). The IKN project was initiated by Indonesia's 7th President.

Agus also emphasised that President Prabowo has requested ministries and institutions to use the state budget more efficiently.

He mentioned that infrastructure development during President Prabowo's administration would not excessively absorb the state budget (APBN).

“So, I affirm that it will continue. However, it will be adjusted, particularly in terms of its budget. We do not yet know how much will be allocated to continue projects in IKN. We will monitor it closely,” he affirmed.

At the first plenary cabinet meeting at the Presidential Palace in Jakarta on Wednesday (23/10), President Prabowo requested the Minister of National Development Planning (PPN)/Head of the National Development Planning Agency (Bappenas) to ensure this aspect.

"There are several directives from me. The PPN Minister must ensure that the programmes and activities of all ministries and institutions have significant, measurable contributions and work in synergy with each other. Study all projects. No more landmark projects," Prabowo stated to all ministers and heads within the Red and White Cabinet.

In his first speech at the MPR Building on Sunday (20/10), Prabowo also stated that the programmes of all ministries and institutions must focus on a specific policy: to realise self-sufficiency in food and energy.

On the other hand, Public Works Deputy Minister Diana Kusumastuti stated that President Prabowo's administration is committed to completing the development of IKN.

“We will continue what has been started and ensure their completion. New projects will be discussed with the IKN Authority,” he stated.

On a separate occasion, Basuki Hadimuljono was proposed to remain the Head of the IKN Authority. This proposal was put forward by the former Acting Deputy Head of the IKN Authority, Raja Juli Antoni, who is currently the Minister of Forestry within the Red and White Cabinet.

“The person who holds the highest authority to decide is President Prabowo Subianto. However, before the transition process was carried out, President Joko Widodo has expressed his input and hope that Mr. Basuki will continue as the Head of the IKN Authority,” he stated.

However, he affirmed that the decision regarding the Head of the IKN Authority is the prerogative right and authority of the President.

“This includes appointing the person who will replace myself as the Acting Deputy Head of the IKN Authority. I hope the IKN Authority can resume its activities as soon as possible,” he continued.

Autonomous tram

Meanwhile, the 7th Indonesian President, Jokowi, has entrusted several ministers, the Chief of the Indonesian National Police, and the IKN Authority with matters related to the future of the autonomous tram in IKN.

Two days before stepping down, Jokowi issued Presidential Instruction No. 2/2024 on Support for the Acceleration of the Implementation of Trial and Proof of Concept of the Autonomous Tram in Nusantara Capital City.

Several state officials who were instructed to support the IKN autonomous tram project include the Transportation Minister, the Public Works and Housing (PUPR) Minister, the

Finance Minister, the Communication and Informatics Minister, the Head of the IKN Authority, and the Chief of the Indonesian National Police.

These state officials were instructed to take coordinated and integrated steps in accordance with their tasks, functions, and authorities. Their responsibilities include providing support for the trial and proof of concept, carrying out operations, and implementing technical planning, development, and facility maintenance.

Specifically, the Transportation Minister was instructed to prepare technical conditions and planning to support the proof of concept, focusing on the technical feasibility of constructing and operating the autonomous tram. Additionally, the minister is to conduct tests and certifications on the facilities and infrastructure of the autonomous tram.

Next, the PUPR Minister was assigned to draft the technical design planning for the construction of the virtual track on the road and to provide infrastructure support in the form of road hardening and shelters.

Then, the Finance Minister was assigned to provide support in facilitating the import and export of the autonomous trams to and from the customs area within IKN.

The Communication and Informatics Minister was instructed to provide support in the form of permits to establish special telecommunications for the trial and proof of concept of the autonomous tram in IKN, as well as to ensure the availability of the necessary frequency for telecommunications during the trial and proof of concept.

Next, the Head of the IKN Authority was assigned to oversee the trial and proof of concept of the autonomous tram, taking into account the technical considerations provided by the minister responsible for transportation.

The Head of the IKN Authority was assigned to evaluate and assess the feasibility of the trial and proof of concept of the autonomous tram. Additionally, they are to provide recommendations, dispensations, and considerations regarding the utilisation of the road space, as well as the ownership and supervision of the autonomous tram route.
 

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