Jakarta. Senior Researcher Tauhid Ahmad from the Institute for Development of Economics and Finance (Indef) estimates that developing Indonesia's future capital, Nusantara, into a smart city will require between Rp 300 trillion ($18.7 billion) and Rp 400 trillion. The cost of smart city projects is significantly higher than that of conventional infrastructure.

“Smart cities, for instance, use electric vehicles, which are more expensive than traditional ones. This necessitates a larger budget,” Tauhid Ahmad explained during an interview with Investor Daily TV (IDTV) on Wednesday.

Despite energy efficiencies from renewable sources, Tauhid highlighted that the cost of new technologies and their maintenance remains high. He believes the current Rp 71.8 trillion budget allocated by the government for Nusantara’s development from 2022-2024 is inadequate.

“With just Rp 71 trillion, even with additional funds, the budget is still insufficient. A smart city requires much more than the current allocation,” he noted.

To address this shortfall, Tauhid proposed involving state-owned enterprises (SOEs), regional-owned enterprises (ROEs), and the private sector. SOEs and ROEs could contribute Rp 123 trillion, while private sector investment could reach around Rp 250 trillion.

“SOEs can focus on building infrastructure in Nusantara, while the private sector, though involved, has not yet made substantial investments. Much of the current physical infrastructure is still government-funded,” he added.

The Public Works and Housing (PUPR) Ministry spokesperson, Endra Atmawidjaja, revealed that total private investment, mostly from domestic direct investment, in Nusantara has reached Rp 52.8 trillion.

“This amount covers investments across various sectors such as hotels, restaurants, sports facilities, education, hospitals, and other commercial activities including wholesale and warehousing,” Endra told IDTV.

Endra also mentioned that the government plans to conduct its seventh groundbreaking ceremony next week, involving companies like BCA and Intiland, among others.  “We are also exploring technology transfers. For instance, several countries have shown interest in areas such as autonomous rail transit (ART) and energy development. Recently, we signed an MOU with Dubai International Financial Center Authority to further these collaborations,” Endra added.

Public Works and Housing Minister and Acting Head of Nusantara Authority (OIKN) Basuki Hadimuljono reported that preparations for the Independence Day ceremony at the new capital are progressing well, with water and electricity already installed.

President Joko “Jokowi” Widodo plans to celebrate Independence Day in Nusantara on August 17.

This weekend, the Transportation Ministry will trial the ART in Nusantara. Last week, the Nusantara Authority, in collaboration with Hyundai Motors and the Korea Aerospace Research Institute (KARI), successfully conducted a test flight of an unmanned sky taxi. The sky taxi reached a height of 50 meters during its test at APT Pranoto Airport Hangar in Samarinda, East Kalimantan.

Additionally, two access roads from Balikpapan and Sepinggan to Nusantara are ready, although the airport in Nusantara is still under construction. State guests will use these routes for now.

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