August 27, 2025 | 12:34 pm
TEMPO.CO, Jakarta - The Ministry of Public Works and Public Housing (PU) announced that it would no longer undertake new construction projects in Indonesia's new capital, Nusantara Capital City (IKN). The ministry will instead focus on completing the construction that was previously targeted in multi-year contract (MYC) projects at IKN. Among the projects are the construction of the Vice President's Palace and several roads in the core area that remain unfinished.
Deputy Minister of PU Diana Kusumastuti stated that some projects at IKN have been redirected because the IKN Authority has been tasked with carrying out the second phase of development in the area. Previously, the development of IKN was part of the Ministry's performance program. "New packages of (construction) will be carried out by OIKN," said Diana when confirmed by Tempo on Tuesday, August 26, 2026.
However, Diana mentioned that the ministry is still responsible for completing the ongoing MYC projects at IKN. The budget to complete the construction has already been allocated in the 2026 budget. "The MYC projects at IKN will continue, and the necessary budget has been allocated in the budget allocation," she said.
A similar statement was also made by the Head of the IKN Authority, Basuki Hadimuljono. Basuki stated that they obtained a confirmation of budget allocation from President Prabowo amounting to Rp4.8 trillion for the implementation of the second phase of development at IKN. Construction is planned to continue until 2028.
Basuki mentioned that Prabowo has asked him to focus on developing the legislative and judiciary areas, as well as their supporting infrastructure. He also proposed an additional fund of Rp16.13 trillion from the State Revenue and Expenditure Budget (APBN). This proposal was made to support the continuation of the multi-year contract (MYC) projects and the construction of new infrastructure in the Core Area of the Government Center of IKN. As a result, the total budget of OIKN in 2026 will be Rp21.18 trillion.
Previously, Deputy Chair of the House of Commission XI, Mohamad Hekal, was certain that the development of IKN would continue, despite it not being the main priority of President Prabowo's administration. The development policy will be more focused on the eight priority programs that Prabowo has conveyed in his speech.
"It continues to progress (the development of IKN). It may just not be as fast as it was promoted before," said Hekal when met in Tabanan Regency, Bali, on Thursday, August 21, 2025.
The eight priority programs include food security, energy security, the Free Nutritious Meal (MBG) program, quality education, quality health, strengthening people's economy through the Red and White Village Cooperative, universal defense, and accelerating global investment and trade.
Therefore, Hekal stated that although it is not the main priority, the development of the IKN will not stop. "Well, the other programs will not be terminated, but will still be funded. We are just prioritizing the eight (priority programs) for now," he said.
In the Draft State Revenue and Expenditure Budget (RAPBN) 2026, the government allocated Rp6.3 trillion for the development of IKN. Finance Minister Sri Mulyani Indrawati conveyed this figure during the press conference for the Financial Note 2026.
"Rp6.3 trillion for IKN. If I'm not mistaken. If I'm wrong, I'll correct it later," said Sri Mulyani as quoted from the Press Conference for RAPBN and Financial Note 2026, in Jakarta, on Saturday, August 16, 2025.
According to Book II of the Financial Note for RAPBN 2026, the budget allocation for IKN is Rp6.26 trillion. The Strategic Area Development Program receives Rp5.71 trillion, while the Management Support Program receives Rp553 billion.
Hendrik Yaputra and Riri Rahayu contributed to the writing of this article
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