Indonesia's House of Representatives on Tuesday adopted a bill that will see the government relocate the nation's capital from congested Jakarta on Java Island to Borneo, the world's third largest island.
The capital, to be named Nusantara meaning archipelago, will be moved possibly in 2024 to a location in East Kalimantan Province in eastern Borneo, over 1,200 kilometers away from Jakarta.
The new capital will sit on about 256,000 hectares of land, according to the legislation. While most central government bodies will move there, Jakarta will remain as the center of business, trade, finance and services.
When announcing the plan to relocate the capital in 2019, President Joko Widodo said the transfer was needed to ease the burden on Jakarta, which suffers chronic pollution, traffic congestion and other woes, and on Java Island as a whole, where more than half of all Indonesians live.
The country has a population of about 270 million.
The shift is also aimed at closing the development gap between Java and other islands as the main island currently accounts for 58 percent of the country's total gross domestic product, the president said.
"The location is very strategic...and has low risks of natural disasters," National Development Planning Minister Suharso Monoarfa told a hearing on the Borneo new capital site.
All but the Muslim-based Prosperous Justice Party approved the bill for the capital city relocation. The party was against the plan, saying the money would be better used in fighting the coronavirus pandemic.
The building of the new capital is set to cost around 466 trillion rupiah ($33 billion). It will be financed by the state budget, a partnership scheme between the government and private sectors and direct investment.