Several projects to be completed in July 2024: Increasing by Rp35.37tn, total IKN budget reaches Rp65tn
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 - Sejumlah proyek rampung Juli 2024: Bertambah Rp35,37 T, total anggaran IKN capai Rp65 T
18 August 2023
By: Amrozi Amenan & Tri Murti
Jakarta - The Public Works and Housing (PUPR) Ministry will receive a budget allocation worth Rp35.37 trillion for the development of Nusantara Capital City (IKN) in East Kalimantan in 2024, so the total budget for the new capital city from 2022 to 2024 reaches around Rp65 trillion. To absorb the budget, PUPR Minister Basuki Hadimuljono is targeting the construction of several projects in IKN to be completed in July 2024.
“They include the presidential office, four coordinating ministry offices, several other ministerial offices, and a courtyard to hold ceremonies. Hopefully, they will be completed in July [2024],” Minister Basuki said during the press conference on the state budget draft (RAPBN) and the financial notes for 2024 at the office of the Directorate General of Taxes of the Finance Ministry in Jakarta on Wednesday (16/8/2023).
Minister Basuki also explained that the construction of housing for state civil apparatuses (ASNs), TNI, and Polri that reach 47 towers would commence in September 2023. Out of the 47 towers, 12 will completed and furnished soon so that they can be inhabited gradually by ASNs assigned to IKN,” Basuki said. Meanwhile, regarding road infrastructure, there are several projects that have commenced construction. “The progress should be at around 30%. The toll road that will shorten travel from Balikpapan to IKN will be partially completed in 2024,” Basuki revealed. He also said that, annually, IKN’s development budget would increase. The budget that was allocated for IKN in 2022 reached Rp5.25 trillion. Then, the budget reaches Rp26.27 trillion in 2023 and will reach Rp35.37 trillion in 2024. “So, the total funds disbursed by Finance Minister Sri Mulyani to develop IKN from 2022 to 2024 reach Rp65 trillion,” Basuki explained.
During the press conference on the financial notes and the RAPBN for 2024, the PUPR Ministry was appointed to complete the remaining infrastructure construction with a budget allocation of Rp146.98 trillion, excluding the presidential instruction on regional roads worth Rp15 trillion and the support for new autonomous regions (DOB) worth Rp11 trillion.
“I am asking us to continuously keep this trust with solid programming and prudent budget implementation governance. I am reaffirming that there is no new construction except for the President’s order and direction. OPOR (Operation, Maintenance, Optimisation, and Rehabilitation) is crucial to ensure that every infrastructure that we have built will benefit the people,” Minister Basuki affirmed on Thursday (17/8/2023).
Minister Basuki also reminded that the construction of the Central Government Core Area (KIPP) and basic infrastructure in IKN in 2023 and 2024 needed to pay attention to three aspects, namely quality, expenditure efficiency, and aesthetics. Moreover, the speed of the infrastructure construction needs to be on time.
“I am asking us to focus to complete these tasks with integrated planning as well as tight implementation and supervision, so the infrastructures and the buildings will be of high quality to maintain the harmony between the environment and nature,” Minister Basuki said.
Meanwhile, Finance Minister Sri Mulyani Indrawati also revealed that the 2024 RAPBN allocated a budget of Rp40.6 trillion for basic infrastructure construction in IKN in 2024. From the total budget, Rp35.7 trillion will be allocated for the PUPR Ministry that will receive Rp147 trillion in total next year.
“The IKN [budget] next year will reach Rp40.6 trillion, including Rp35 trillion for the PUPR [Ministry],” Finance Minister Sri Mulyani Indrawati said during the press conference on the financial notes and the RAPBN for 2024 at the central office of the Directorate General of Taxes of the Finance Ministry in Jakarta on Wednesday (16/8/2023).
The budget will be used to complete priority projects to advance basic infrastructure in IKN, which include government offices and the first stage of housing for ASNs.
According to the Finance Minister, financing for IKN development will continue to 2045 by relying on the non-state budget (APBN) portion.
“So, the priority for 2024 is to relocate. We see that the central [government] and the supports are set to be completed in 2024,” the Finance Minister explained.
Stage 1 completed in 2024
Meanwhile, IKN Infrastructure Development Implementation Task Force Chairperson Danis H. Sumadilaga is targeting stage 1 of the basic infrastructure construction in IKN, which includes the KIPP, to be completed in 2024. The progress of stage 1 of the basic infrastructure construction in IKN has reached 38.1%, and all activities are still on schedule.
“Stage 1 of the basic infrastructure construction in IKN has commenced since 2021, which includes the construction of IKN access toll road stage 1, Sepaku Semoi Dam, the Presidential Palace, and the Presidential Office,” Danis said in his official statement on Thursday (17/8/2023).
According to Danis, the PUPR Ministry has also commenced the second stage of IKN development.
“The second stage includes projects that were signed between April-May 2023, such as coordinating ministry buildings and ASN flats in IKN,” he stated.
Danis said that some basic infrastructure in IKN that will be completed in 2024 were clean water infrastructure and road networks to improve connectivity to IKN.
“For clean water, Sepaku Semoi Dam and Sepaku Intake are being completed. Next, drinking water supply systems are set to be distributed in several areas in IKN in 2024,” Danis said.
Meanwhile, for connectivity, Danis mentioned that he was currently completing the construction of the toll road that goes to the KIPP in IKN. In the first stage, Danis said that the toll road that will be connected to Balikpapan-Samarinda (Balsam) toll road would shorten travel time from Balikpapan to the KIPP in IKN from two hours to only around one hour.
The construction of IKN toll road has currently commenced on three sections, namely section 3A (Karangjoang-KKT Kariangau) spanning 13.4 km, section 3B (KKT Kariangau-Tempadung Interchange) spanning 7.32 km, and section 5A (Tempadung Interchange-Balang Island Bridge) spanning 6.67 km. Regarding the progress, section 3A has reached 12.33%, section 3B has reached 30.11%, and section 5A has reached 37.99%. The three sections are set to be completed in the middle of 2024 around June or July.
Meanwhile, section 6A (Riko-IKN Outer Ring Road Plan) and section 6B (Outer Ring Road Plan-ITCI 3 Interchange) are currently in tender. Meanwhile, section 1 (Sepinggan Airport-Balsam Toll Road) will be tendered in October 2023, and it is set to be signed in December 2023. Section 5B-1 (Balang Island Bridge-VVIP Airport Plan Interchange) and section 5B-2 (VVIP Airport Plan Interchange-Riko) will be tendered in September 2023 to be signed in November 2023.
Section 2 of IKN toll road is a part of Balsam toll road. Meanwhile, section 4 is being prepared to construct the immersed tunnel in an effort to preserve the environment. On section 4, there will be two lanes for animals, so there will be some kind of a short tunnel.
“The immersed tunnel is currently in the design tender process,” Danis said.
According to Danis, IKN development is an opportunity to organise a city according to theories, regulations, and other aspects because the city is developed from scratch. He continued that IKN is designed to be developed until 2045, when Indonesia is expected to be a golden country or an advanced country. IKN development does not only concern physical construction, but also life and work transformation, especially in technology utilisation.
“It is our opportunity to change, so IKN is a facility to change for the better in 2045, the year of the 100th Independence Day anniversary of Indonesia. If we do not start now, then when,” he said.
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