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TEMPO.CO, Jakarta - Rumors of the budget for the Nusantara Capital City (IKN) project being blocked have been widely discussed these days. The issue emerged after the Minister of Public Works (PU) Dody Hanggodo said that no budget had been realized for the new capital city project in 2025.
"The budget (infrastructure budget) has all been blocked," said Dody when met after a meeting with Commission V of the Indonesian House of Representatives at the Senayan Parliament Complex, Thursday, February 6, 2024.
Several parties considered the blocking of the budget for IKN reasonable because it was still early in the year. However, in fact, news of the blocking of the PU Ministry's budget had been conveyed by Dody since November 2024. His ministry's budget, he said, was still being held by Finance Minister Sri Mulyani until there was synchronization of the work program.
"All infrastructure funds are temporarily being withheld by the Minister of Finance according to the President's direction, until we from ministries sit together with the Head of Bappenas (National Development Planning Agency)," said Dody at Bappenas, Monday, November 18, 2024.
So what are the ins and outs of the issue of blocking the IKN budget?
The PU Ministry has been tweeting about the blocked budget since mid-January
The budget halt at the PU Ministry until 2025 has made PU Deputy Minister Diana Kusumastuti speak up. On January 13, she said that the budget issue is still an issue in the infrastructure project plans this year. This is because the state treasurer has not given his blessing regarding the budget that can be disbursed to the PU Ministry.
"The current budget is still blocked, it has not been opened," said Diana when met at the PU Ministry. However, Diana ensured that infrastructure projects had been discussed. "Later (it will be determined) which are priorities and which are not," she said.
President Prabowo instructs budget efficiency
Then, amid the uncertainty of the unblocking of the PU Ministry's budget, President Prabowo Subianto instructed budget efficiency by issuing Presidential Instruction Number 1 of 2025. Through the Presidential Instruction, the President requested savings of Rp306.6 trillion consisting of efficiency of the ministry/institutional spending budget of Rp256.1 trillion and efficiency of the transfer budget to regions of Rp50.5 trillion.
PU Ministry budget cut
Along with the instruction, the PU Ministry budget was cut by Rp81.38 trillion, leaving Rp29.57 trillion. Previously, the PU Ministry's budget ceiling this year was set at Rp110.95 trillion. This budget cut has been approved by Commission V of the Indonesian House of Representatives in a meeting on Thursday, February 7, 2025.
PU Ministry optimistic that IKN development will continue
As a result of the budget cuts, the PU Ministry will coordinate further with the IKN Authority regarding the continuation of infrastructure development projects. Even so, the Director General of Cipta Karya of the PU Ministry, Dewi Chomistriana, is optimistic that the construction of the IKN can still be continued. This is because the IKN Authority—whose initial budget was set at Rp6.3 trillion—received an additional budget of Rp8.1 trillion.
"Hopefully (the project) can be continued together with the IKN Authority," said Dewi when met at the DPR RI Complex on Thursday, February 6, 2025.
PU Minister says there is no 2025 budget for IKN
After a meeting with Commission V of the DPR RI at the Senayan Parliament Complex, Thursday, February 6, 2024, Dody said that there was no budget that had been realized for the construction of the IKN. Currently, he is also still taking care of the finalization of the PU Ministry's budget which was cut to Rp29.57 trillion due to the efficiency instructions from President Prabowo.
"The progress is to buy lunch, Mr. Minister."
PU Ministry to propose budget unblocking
Because budget efficiency has been approved by Commission V of the DPR, Dody said he would immediately submit a request to unblock the budget to Finance Minister Sri Mulyani. After that, Dody will think about the programs that need to be executed.
"We hope (after) this is approved, there will be a special letter for us to unblock. Then there is another recomposition, which ones can be manipulated to then be able to support the wider community," said Dody at the DPR RI Complex, Thursday, February 6, 2025.
The blocking of the IKN budget is said not to be due to efficiency
Secretary General of the PU Ministry Mohammad Zainal Fatah stated that the IKN development budget was not blocked due to Presidential Instruction Number 1 of 2025 concerning Spending Efficiency in the Implementation of the APBN and APBD.
"It's different," said Zainal when asked about the context of the blocking of the IKN budget, at the PU Ministry on Friday, February 7, 2025.
Early year policy, budget blocking is normal
Zainal explained that budget blocking is a policy of the Minister of Finance regarding budget use at the beginning of the year. For example, the budget that is opened is the budget for operations. While other budgets, such as for development projects, are still being held.
"That's normal. It's always like that at the beginning of the year," said Zainal.
Palace confirms that the IKN budget is still blocked
Head of the Presidential Communications Office Hasan Nasbi confirmed that the budget for the development of the IKN is still blocked by the Ministry of Finance. He explained that blocking does not mean that there is no budget for the development of the IKN. The budget for the IKN has just not been opened. The IKN development budget is currently still with the Ministry of Public Works and the IKN Authority.
"The budget has not been opened. "So the budget is in the IKN Authority and the PU Ministry," said Hasan at the PCO Office, Kwarnas Building, Gambir, Central Jakarta, Friday, February 7, 2025
Prabowo is committed to continuing the development of the IKN
Hasan said that President Prabowo is committed to continuing the development of the IKN for the next five years. The budget has also been prepared. "A budget of Rp48 trillion is committed for the next 5 years," said Hasan. During that time, the government is targeting the core area of the government center, the judicial building area, and the legislative building to be completed.
"The rest will be encouraged to be built by the private sector," he said.
The General Chairperson of the Golkar Party, Bahlil Lahadalia, also said something similar. He said that Prabowo is still targeting the development of the IKN to continue. The government continues to push for the completion of development and the transfer of state officials to the IKN in 2028.
"As far as we know, the IKN is still the president's target," said Bahlil in a press conference at the Golkar Central Leadership Council office, West Jakarta, Saturday, February 8, 2025.
Jokowi's Response
The 7th President Joko Widodo or Jokowi did not say much when asked for his opinion regarding the IKN budget blocked by President Prabowo. According to Jokowi, budget cuts and blocking are the government's authority.
"Ask the Head of the IKN Authority, ask the government," said Jokowi when met by reporters after receiving the arrival of Nigerian politician Peter Obi at Jokowi's residence in Sumber Village, Banjarsari District, Solo, Central Java, Friday, February 7, 2025.
Hendrik Yaputra, Septia Ryanthie, M. Raihan Muzzaki, and Riri Rahayu contributed to this article.
Editor’s Choice: Palace Confirms Budget for IKN Development Is Blocked
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