Minister of National Development Planning/Head of Bappenas Suharso Monoarfa said the budget for the early-stage construction of the Ibu Kota Nusantara (IKN) or the new capital city of the Archipelago, East Kalimantan, will reach IDR 23 trillion next year. He said the funds came from the state budget which was included in the budget of ministries/agencies. The ministries/institutions that he refers to include the Ministry of Public Works, the Investment Ministry of Investment Coordinating Board, the Ministry of Environment and Forestry (KLHK), to the National Police. "The total is around IDR 23 trillion. The largest is indeed in the Ministry of PUPR, around IDR 20.8 trillion," said Suharso in a Press Conference on the Financial Note and the 2023 State Budget Bill, Tuesday (16/8). He explained that this budget allocation was in accordance with the projections that had been prepared. In the projection, 20% of the IKN development budget is supported by the state budget, while the rest is expected from the private sector. Suharso said that so far more than 10 private companies have signed contracts to invest in IKN.
Meanwhile, for foreign companies only three companies. "For domestic investors alone, there are around 10, from outside maybe around 3 investors," he said. On the same occasion, Minister of Public Works, Basuki Hadimuljono said the focus of IKN development in 2022 and 2023 was on the central government core area (KIPP). For example, the presidential and vice-presidential office areas, sanitation, national roads, to the Balikpapan-IKN toll road. The construction will begin at the end of August 2022. "Everything has been tendered, maybe now the rebuttal period, Inshallah, by the end of this month, the contract has been signed and will be implemented soon," said Basuki. He is also optimistic that the first phase of construction can be completed in 2024. The government itself divides IKN development into three stages. First, the completion is the construction of core infrastructure, among others, the Presidential Palace, the MPR/DPR Building, government offices, the TNI-Polri headquarters. The second phase will be carried out from 2025 to 2035, and the third phase in 2035 to 2045. Previously, President Joko Widodo (Jokowi) explained that the government would encourage private investment in developing IKN in East Kalimantan. At least 80 percent of IKN development will be supported by the private sector. "The Central Government Core Area (in IKN) was indeed built by the state budget, but the remaining 80% of private investment was invited to participate," said Jokowi at the MPR RI Annual Session. It was mentioned that the government would use more than 50% of APBN funds to build IKN. However, Finance Minister Sri Mulyani immediately denied the news shortly after it became a hot issue in the community in January 2022. The government projects that the total funds needed to build IKN are around IDR 466 trillion-IDR 486 trillion. Based on the initial plan, the APBN will cover 19% or around IDR 88.54 trillion-IDR 92.34 trillion. In addition, the government will also utilize funds from private investment, state-owned corporation, to the government and business entity cooperation scheme (PPP) in building IKN.
