(Bloomberg) -- Indonesian President Joko Widodo’s ambitious plan to build a new capital gathered momentum with SoftBank Group Corp. founder Masayoshi Son and former British Prime Minister Tony Blair holding discussions on the contours of the $34 billion project.
Son and Blair said they are looking forward to contributing to building a green, smart and modern capital for Southeast Asia’s largest economy. The two, along with Abu Dhabi Crown Prince Mohammed Bin Zayed Al Nahyan, are members of an advisory panel formed by Widodo to steer the capital construction.
The structure of funding for the capital will be decided once the regulation and designs are in place, Son told reporters in Jakarta after a meeting with the president. While SoftBank is close to finalizing its investment commitment, BlackRock Inc. has shown interest in investing, Coordinating Minister for Maritime Affairs and Investment Luhut Pandjaitan said.
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Jokowi, as Widodo is known, urged ministers this week to expedite mapping of the project to determine the role of the private sector in financing the construction of the yet-to-be named capital on Borneo island. The government aims to start the construction of basic infrastructure later this year.
The government has picked Nikken Sekkei Ltd., a Japanese consultant, and U.S. engineering firm Aecom to assist with the architecture and design of the new capital, Pandjaitan told reporters. It has previously hired McKinsey & Co. to prepare a master plan.
The new capital has already drawn interest of investors from China, the Middle East and the U.S., according to officials. Jokowi is counting on private and state-owned entities to bear about 80% of the cost of building the capital. Authorities will move the capital in phases from 2024, with the new city eventually becoming home to as many as 6-7 million people.
Indonesia has identified about 256,000 hectares of land for the new capital on the island of Borneo -- about four times the size of Jakarta. Regular flooding in the Jakarta metropolitan area, home to almost 30 million people, and the need to spread economic growth beyond the main Java island have prompted Jokowi to fast-track the capital relocation.
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