Jakarta - Indonesia’ Ministry of Public Works and Housing (PUPR) has started Phase 1 of the development of its new National Capital City (IKN) Nusantara located on East Kalimantan by signing a 19-package contract worth 5.3 trillion IDR (356 million USD) for 2022.

Nusantara - the new capital city of Indonesia. (Photo: futuresoutheastasia.com)

Secretary General of the Ministry of PUPR Mohammad Zainal Fatah said his ministry plans to develop basic infrastructure at IKN Nusantara from 2022 – 2024 with a total budget of 43.73 trillion IDR.

The 19 packages include six in irrigation and flood works worth 42.8 billion IDR; eight toll roads costing 4.59 trillion IDR; four resettlement areas estimated at 111.9 trillion IDR; and a housing project costing 667 billion IDR.

A contract for another 4 trillion IDR work package is expected to be inked on September 5.

Indonesian President Widodo first announced the plan to relocate the capital from Java, the country’s most populated island, in April 2019.

Months later, Widodo announced the districts of Penajam Paser and Kutai Kertanegara in East Kalimantan province to be the site of the new capital city.

With an area of about 127,000 sq.km, East Kalimantan is home to more than 3.7 million people.

The new capital will serve as the centre of government, while Jakarta, the current capital city, which is home to more than 10 million people, will remain the business and economic hub of Indonesia, Southeast Asia's biggest economy.