Indonesia’s ambitious plan to move its capital from the crowded, sinking metropolis of Jakarta to Nusantara in East Kalimantan is entering a pivotal phase, with preparations for new legislative and judicial zones now complete and construction set to begin before the year’s end. Yet, as the bulldozers prepare to roll, questions about funding, infrastructure readiness, and the sheer scale of the move are fueling debate among officials and experts alike.
According to ANTARA, the Nusantara Capital Authority (OIKN) confirmed on August 16, 2025, that groundwork for the legislative and judicial zones within the core government area—known as Kawasan Inti Pusat Pemerintahan (KIPP)—has been finalized. Head of the OIKN, Basuki Hadimuljono, told journalists during a site visit to North Penajam Paser District, “Construction will start between the end of October and early November this year.” This next stage, he emphasized, is crucial: “We should not focus only on executive institutions, because operational legislative and judicial bodies are just as important.”
The KIPP already boasts the presidential palace and ministerial offices, construction of which began in 2022. The upcoming zones will house Indonesia’s House of Representatives (DPR), the People’s Consultative Assembly (MPR), and the Regional Representatives Council (DPD) in the eastern section, while the western side will be reserved for the Supreme Court (MA) and other judicial bodies. Basuki explained that these facilities are essential for the official transfer of government functions from Jakarta—a move designed to relieve the capital’s chronic congestion and environmental woes.
Financing remains a central concern. The Ministry of Public Works has allocated 8.1 trillion rupiah (about USD 520 million) for the legislative and judicial zones, with 2.9 trillion rupiah already earmarked for road access and contracts awarded this month. Construction is projected to take 660 days—just under two years—if all goes according to plan.
But the budget for Nusantara is shrinking, not growing. According to Tempo, Finance Minister Sri Mulyani Indrawati revealed on August 15, 2025, that the capital’s budget for 2026 will be just 6.3 trillion rupiah—less than half of the 13 trillion rupiah allocated in 2025, and a fraction of the 43.4 trillion rupiah set aside in 2024 under the previous administration. The 2025 budget included 5.4 trillion rupiah for road paving and construction in the KIPP area, alongside the 8.1 trillion rupiah for the new legislative and judicial buildings.
Why the dramatic drop? The answer lies partly in shifting priorities under President Prabowo Subianto, who inherited the project from his predecessor, Joko Widodo (Jokowi). While Prabowo has signaled his intent to continue building Nusantara, he has also called for greater efficiency and a close eye on costs. “For IKN, it’s Rp6.3 trillion [in 2026], if I’m not mistaken. I will check it again later,” Sri Mulyani said at a press conference on the 2026 State Budget Plan, as reported by Tempo.
Yet, officials are sounding alarms over whether the reduced funding will be enough to realize the vision for Nusantara—or even maintain what’s already been built. Basuki Hadimuljono estimated on July 8, 2025, that maintenance costs for Nusantara would be between 200 and 300 billion rupiah. However, a Tempo report from August 10, 2025, suggested that actual maintenance costs could be considerably higher, citing unnamed officials who warned that the government might be underestimating the true expenses.
Infrastructure readiness, especially transportation, is another sticking point. Bambang Haryo Soekartono, a member of the Gerindra Party’s expert council and Commission VII of the DPR, has been particularly vocal. “The government needs to promptly evaluate and decide on the best course of action so that the people are not sacrificed for the interests of IKN’s development,” he stated on August 10, 2025, according to Tempo. Bambang calculated that if 2 million people were to travel to Nusantara, round-trip plane tickets alone would cost 6 trillion rupiah, with accommodation adding another 2 trillion rupiah daily—totaling a staggering 8 trillion rupiah per day or 2.92 trillion rupiah per year.
Bambang also highlighted the limits of Indonesia’s transport capacity. The country has about 450 aircraft, each with a capacity of 200 passengers, allowing for 360,000 passengers per day—far short of the estimated 2 million needed. The Sultan Aji Balikpapan Airport, the main gateway to Nusantara, can handle only 30 aircraft or 45,000 passengers daily. Nusantara’s own airport, still under development, is expected to accommodate just 600 passengers a day. “Where will the passengers be accommodated, and what mode of transportation will they use? This needs to be thoroughly studied,” Bambang warned. He contrasted this with Jakarta, which boasts a wide array of transport options, from trains and buses to private cars and even bicycles.
Despite these challenges, the government appears determined to push ahead. During the second term of former President Jokowi, the project gained significant momentum—so much so that the August 17, 2025, Independence Day ceremony was held at the new presidential palace in Nusantara. But the final, formal transfer of the capital remains in limbo. As of July 25, 2025, President Prabowo Subianto had not yet signed the Presidential Decree required to make Nusantara the official seat of government. State Secretary Minister Prasetyo Hadi explained, “Facilities and infrastructure, these are the requirements that we feel must be in place before deciding or the president signs the decree for the capital city relocation.”
Prasetyo estimated that all necessary facilities and infrastructure could be completed within three years, and the OIKN is currently focused on developing infrastructure to support the legislative, executive, and judicial branches. The government’s cautious approach underscores the magnitude of the task: not just building a city from scratch, but ensuring it can function as a modern, accessible seat of power for a nation of more than 270 million people.
For now, the Nusantara project stands at a crossroads. On one side, there’s the promise of a new, sustainable capital designed to relieve the burdens of Jakarta and symbolize Indonesia’s future. On the other, there are real concerns about cost, capacity, and the readiness of critical infrastructure. As construction on the legislative and judicial zones begins, all eyes will be on Nusantara to see if Indonesia can deliver on its bold vision—or if the road ahead will be even bumpier than anticipated.