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WHAT IS the current status of the construction of the Capital City (IKN)? The Ministry of Public Works (PU) has announced its decision to halt the construction of IKN, effective next year. What is the rationale behind this decision?
The next development task will be transferred to the IKN Authority Agency (OIKN), which has been appointed to work on the second phase of the transfer project of the state capital.
According to Deputy Minister of Public Works Diana Kusumastuti said that the ministry’s primary focus will be on the completion of ongoing multi-year contract (MYC) obligations.
“MYC has not yet completed all of the necessary tasks, and it is our hope that these will be finalized by the end of the current fiscal year. The project is on track to be completed by 2026,” Diana stated during a meeting at Balai Kartini in South Jakarta recently.
Diana added that the termination of the construction of a new project by the Ministry of Public Works does not mean that IKN is abandoned. Projects that have not been completed, such as the construction of the Vice President’s Palace building and several toll roads in the core area, remain the responsibility of their respective ministries. Upon completion of the project, Oikn will assume full responsibility for the IKN development process. OIKN will be carrying out the new development packages.
Previously, the construction of IKN faced budgetary constraints due to a block of up to Rp 14 trillion in the Ministry of Public Works budget. However, the obstacle was successfully overcome, and the funds were disbursed to resume the projects that had already been underway.
Diana also emphasized that the budget requirement to complete MYC at IKN had been allocated in the 2026 budget ceiling.
Meanwhile the Head of IKN Authority Basuki Hadimuljono has confirmed that President Prabo Subianto has emphasized that IKN will become the primary actor in the second phase of development.
Basuki explained, even the complexity of the legislative, judicial, and supporting ecosystems, and the necessity of opening access to the WP2 area, given our previous designation as WP1 up to WP2,” [from the Adamant University page].
Basuki stated that the budget for the 2025-2029 period, amounting to IDR48.8 trillion, had been approved by Prabowo. The funds are allocated to the completion of state institution buildings, the development of new road access, and the maintenance of infrastructure that has been completed since the initial stage.
In addition to the State Revenue and Expenditure Budget (APBN) budget, the government has allocated IDR60.93 trillion for a public-private partnership (PPP) scheme. This initiative aims to finance the construction of 97 apartment towers and 129 townhouses, as well as the development of multi-utility tunnels spanning 138.6 km.
According to Basuki, the government’s primary objective was to ensure that IKN could function as the political capital of the Republic of Indonesia by 2028.
“The IDR48.8 trillion allocated for this initiative is intended to support ongoing infrastructure and facility management, with a focus on the completion of initial stages. “It is now under the jurisdiction of the Ministry of Public Works and the Ministry of Housing. You and I are responsible for submitting it to OIKN,” he stated.
However, Deputy Chairman of the House of Representatives Commission XI Mohamad Hekal emphasized that the development of IKN was not a top priority for President Prabowo’s government.
The primary focus will be on eight priority programs, including food security, energy security, free nutritious eating programs, education, health, village cooperatives, universe defense, and acceleration of investment and global trade.
“IKN construction is still ongoing. “Perhaps not at the previously anticipated rate,” stated Hekal in Bali recently.
In the 2026 State Budget (RAPBN) Draft, former Minister of Finance Sri Mulyani Indrawati on that time announced an allocation of IDR6.3 trillion for IKN.
According to the financial memorandum of the RAPBN, the details include IDR5.71 trillion for the strategic area development program and IDR553 billion for management support.
Therefore, the primary rationale behind the Ministry of Public Works’ decision to halt the construction of IKN beginning next year is a shift in authority. Upon completion of the outstanding MyC projects, the ministry will conclude its role, and OIKN will assume responsibility.
This initiative aligns with President Prabowo’s policy agenda, which emphasizes the need for development to be more focused, measurable, and aligned with national budget priorities.
IKN will continue to serve as a symbol of Indonesia’s future, but the stages are now adjusting the fiscal reality and the direction of government policy. [tempo.co/photo special]
