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Nusantara, Indonesia’s new $35 billion capital, may not go as planned

Indonesia’s plans to build a new capital from scratch have been derailed by the unexpected resignation of the two top officials overseeing the project.

Bambang Susantono and his deputy Dhony Rahajoe have both left their positions within the Nusantara Capital Authority Monday, media outlets including Reuters reported.

State Secretary Pratikno said President Joko Widodo received Susantono’s resignation, Asia News Network reported.

They are expected to be temporarily replaced by two ministers from Widodo’s government until permanent appointments are made.

Widodo said on Instagram that I was working on Nusantara would take place “according to the shared vision,” the South China Morning Post reported.

However, these resignations could be a setback for the new city being built on the east coast of Borneo.

Indonesia’s capital and largest city, Jakarta, is facing flooding risks due to rising sea levels, so Widodo’s administration decided to build a new city.

Nusantara will cost around $35 billion and will not be completed until 2045. However, around 6,000 civil servants are expected to move there in time for the new president’s inauguration in October.

The Indonesian government has recruited high-profile figures, including former British Prime Minister Tony Blair and Abu Dhabi Crown Prince Mohammed bin Zayed Al Nahyan, to promote the project.

He has also enlisted the help of influencers, with Widodo taking dozens of social media stars on tour last year in a bid to address concerns about deforestation.

Concerns are also growing over how Nusantara will be financed. The Indonesian government has only committed to covering about 20% of the cost and is struggling to find other sources of cash. In March 2022, the Japanese company SoftBank gave up investing in the project.

Neither Susantono nor Rahajoe immediately responded to requests for comment from Reuters or Business Insider.

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