Indonesia picks area on Borneo for new capital, with relocation estimated to cost US$33 billion

Indonesia will build a new capital city on the island of Borneo, home to some of the world’s biggest coal reserves and orangutan habitats, as President Joko Widodo seeks to ease pressure on congested and sinking Jakarta.

The new administrative headquarters will be built between North Penajam Paser and Kutai Kartanegara in East Kalimantan, Widodo – known widely as Jokowi – told reporters in Jakarta on Monday.

The relocation of the capital, some 1,400km away from Jakarta, will help spread economic activity outside the nation’s most populous island of Java, the president has said. Costs have been estimated to run as high as 466 trillion rupiah (US$32.8 billion).