Indonesia picks area on Borneo island as new capital  

Indonesia plans to move its capital to Borneo island from Jakarta, a crowded, polluted city on the north coast of Java island which is slowly sinking, the president said on Monday.

The island of Borneo is home to some of the world’s biggest coal reserves and orangutan habitats.

The new administrative headquarters will be located between North Penajam Paser and Kutai Kartanegara in East Kalimantan, Jokowi, as the president is commonly known, told reporters in Jakarta on Monday. The relocation of the capital, some 1,400 kilometers away from Jakarta, will help spread economic activity outside the nation’s most-populous island of Java, the president said.

President Joko Widodo said it was urgent that relocation plans commence, although the capital would not physically begin to be relocated until 2024.

With more than 15,000 people per square kilometer in Jakarta-- twice the density of Singapore -- there’s little space to build more without rehousing thousands of families. To make matters worse, two-fifths of the city is below sea level and parts of it are sinking at 20 centimeters a year.

“We cannot continue to burden Jakarta and Java any more in terms of population density, congestion, pollution and water resources,” Jokowi said. “Jakarta will remain as the center of business, trade and services” and the government is finalizing a 571 trillion rupiah ($40 billion) plan for the city’s development, he said.

The cost of moving the capital is estimated at 466 trillion rupiah if it involved development of 40,000 hectares of land for an estimated 1.5 million residents, according to Planning Ministry estimates. The cost could be whittled down to 323 trillion rupiah if only part of the state apparatus was shifted to an area of 30,000 hectares, it said in April.

The area chosen for the new capital and yet to be named is free from risks of natural disasters and is close to cities such as Balikpapan and Samarinda, Jokowi said. The government controls about 180,000 hectares of land in the area, he said.