Asia’s new $50 billion capital city is open. Shame it’s not finished

Promising flying taxis, luxury hotels and a huge palace in the shape of a bird, Nusantara is set to be Asia’s newest megacity.

Hantu is a catch-all name for all manner of Indonesian spirits or ghosts considered mythical, invisible or some combination thereof. Specific variations include the Hantu Beruk, an ape demon, Hantu Rimba, a deep-forest demon and the worrisome Hantu Raya, the grave demon. Now, perhaps we might add to the list “Hantu Nusantara”.

The main government site and Presidential Palace in Nusantara.Credit: Getty Images

Nusantara is the name for Indonesia’s built-from-scratch new national capital, which is rising in fits and starts – mostly fits – in the rainforest of East Kalimantan, the Indonesian portion of the island of Borneo. The grand plans had called for a gala opening on the nation’s independence day on August 17, when tens of thousands of bureaucrats were meant to be taking up their duties in gleaming new ministerial buildings.

Instead, Nusantara is a mostly mythical promise of a national capital, a series of construction scars in the jungle, where the most concrete fact beyond the foundations taking shape are the missed deadlines and ruined careers (the project’s top managers were sacked – sorry, “resigned” – in June).

Abandoning Jakarta

Indonesia’s first city and capital Jakarta is plagued with water problems: it has too much sewage, not enough drinkable water, it’s breathtakingly overcrowded and you can’t get from here to there whether you walk, ride, bike or drive.

Jakarta’s traffic is notorious.Credit: Bloomberg

The infrastructure for the central government is more befitting of decades past, not the fourth most populous country in the world (280 million people) with a booming economy and a fast-growing middle class.

Enter Joko Widodo, popularly known as Jokowi, the country’s popular two-term president, in power since 2014. Looking about his sinking capital (credit rising seas and a fast-falling water table), Jokowi’s sinking feelings were understandable. Rather than pour more money into the literal hole that is Jakarta, he decreed that the nation would build a new capital from scratch before he left office this year.

A site chosen

Choosing where to relocate the capital was a complex and somewhat opaque process. One sensible requirement narrowed the choices considerably: the chosen site should not be prone to tsunamis, earthquakes and volcanic eruptions, catastrophes which much of Indonesia is at risk of. Kalimantan emerged as a contender and then the choice settled on a backwater in the province of East Kalimantan.

Home to little beyond a few palm-oil plantations, the area is about 30 kilometres north-west of Balikpapan, a coastal city of about 600,000 known for cheap hotels, decent beaches and about the only vibrant nightlife in Borneo.

The legislation to create Nusantara was only signed in late 2021, so the goal of building a new national capital and city by mid-2024, complete with ministries, shopping centres, schools, housing, roads and much more for tens of thousands of bureaucrats and families may have been… well, on the ambitious side.

Scars in the jungle

Today more than 100,000 workers report for duty every morning as construction proceeds. Several YouTube channels provide daily drone video updates on progress. Roads are being carved through the previously untouched jungle and satellite views show a tangle of white scars where there had recently just been a carpet of green.

Buildings under construction.Credit: Bloomberg

Nusantara boosters are quick to tout its green credentials, citing its planned use of solar power and vast schemes for “reforestation”, which is ironic given that the area was once all forest. The new toll road that will connect to the bright lights of Balikpapan is being carved through some of the most ecologically diverse rainforest and mangroves in Indonesia, home to orangutans and the tropical sun bear.

The new capital also plans to boast flying taxis capable of transporting up to five people by air.

The most progress has been made on the vast presidential palace, which is designed to resemble Garuda, the Hindu deity who is king of birds and used across Indonesia, including as the moniker of the national airline.

Jokowi spent his first night in the (mostly finished) palace in July and showed reporters its views overlooking the building sites. He declared the water and electricity to be “working”, although he’s said to have privately groused about the speed of the internet. He also was cagey about just how many nights he was spending in the palace.

Joko Widodo spent his first night in the new Presidential Palace in July.Credit: AP

Crucially for Nusantara, Jokowi now says that delivering the presidential decree that will officially transfer the seat of government from Jakarta will be left to his successor, Prabowo Subianto, who has ominously – for the cause of the new capital – said his first priority will be ensuring that the basic nutritional needs of the nation are met.

Paying the bill

Nusantara’s cost is estimated at somewhere around $US33-40 billion ($49-$59 billion). The government says it will only provide 20 per cent of that, with the rest coming from private sources and industry. While corporations have been quick to pledge support, few have coughed up any money.

Such reticence extends to the sorts of public amenities one would expect for a proud new capital, such as hotels. Should you decide to drop by this vast building site, your options would be limited. Booking.com – which usually offers many choices across the thousands of islands of the Indonesian archipelago – shows just one guesthouse open in the area, a sparsely furnished $12-a-night option.

A five-star Swissotel – the Swissotel Hantu? – which apparently opened last month, pops up in some listings, but the accompanying photos are computer graphics; no one answers when you email them and the hotel doesn’t appear on the Swissotel website (though the hotel appears to have an Indonesian-language only site)

The only images available of Swissotel Nusantara appear to be computer-generated.

In 2023, the world’s largest hotel company, Marriott International, announced plans for three hotels clumped together in an as-yet-unbuilt shopping centre. However, construction is not set to begin until later in 2025, with completion sometime in 2029 – not exactly lickety split.

For now, visiting Nusantara is best left to fans of vast civil engineering projects and those hoping to spot a hantu in the wild. Otherwise, head elsewhere in Kalimantan for extraordinary natural beauty and treasures such as orangutans. Just don’t say you’re looking for white elephants.

A capital from scratch

Indonesia is not the first country to try building a national capital city from scratch. Sadly, the track record of such projects hasn’t been great.

Naypyidaw
Myanmar’s former capital of Yangon was replaced by this greenfield site in 2012. Miles from anywhere, its claims to fame include a Russian scheme to build a huge subway that was scuttled when it was realised that there was no one to ride it, and a locally famous online aerobics coach who unwittingly captured a military coup on her daily stream in 2021.

New Administrative Capital
The Egyptian city intended to replace Cairo has yet to be given a name. Located 28 miles east of the current capital, this new seat of government has been under construction since 2015 and takes up roughly 270 sq miles of land. There are widespread reports that few of the residents are happy in their new (nameless) home.

Brasilia
Meant to usher Brazil into the future in 1960, the nation’s capital is far from other major cities and was built with the expectation that no one would walk (they’d all drive instead). The results are dramatic – and soulless – vistas only an architect could love. Commutes of over two hours a day each way are common.

Canberra
Strategically located between Australia’s two top cities of Sydney and Melbourne, Canberra is a splendid example of a planned city as designed by the brilliant American architect Marion Mahony Griffin (assisted by her husband Walter). Its cultural institutions are renowned but, still, as is common for many created capitals, its rep is bland.

Washington DC
Pejoratively referred to by many as “The Swamp”, up until 1800 today’s city at the heart of America’s east-coast elite really was a swamp. Desperate to find a capital that the fractious original 13 states could agree upon, Congress promised to forgive the debts of states from the Revolutionary War if they’d donate land for a capital. Soon, Maryland and Virginia unloaded swampy bogs on the Potomac River, which was an easy ride for folks like George Washington and Thomas Jefferson. And, conveniently, both were still slave states, so Washington DC could initially be built by an enslaved workforce.

The Telegraph, London