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Capital idea: Indonesia ponders seat of government outside Jakarta

Millions of Jakarta residents are once more wondering what their lives might be like in the future as the Indonesian government has revived an old debate about relocating the capital.

The main argument in favour of a new site is the prospect of getting away from Jakarta's notorious traffic congestion. It has become worse lately as major infrastructure projects now under way -- including mass rapid transport, light rail transit and underpasses -- are making commutes even longer.

The prospect of fewer people and less traffic, should the capital be relocated, could increase property values even if Jakarta is no longer the seat of government, since it would remain the economic and business centre in the country.

"In the long run, it would be good for the value of properties in Jakarta. Values would not be affected by the capital relocation, because the city would be more orderly and more pleasant, with less population and less traffic," said Anton Sitorus, head of research at the property management firm Savills Indonesia.

Besides traffic, land subsidence has always been a concern in low-lying Jakarta, where flooding during the rainy season often brings activity to a standstill. Some parts of the city are now below sea level while the population continues to grow.

Jakarta is home to roughly 10 million people occupying an area of 625 square kilometres, with a population density of 14,600 people per square kilometre in the city proper. It is surrounded by satellite cities in the neighbouring provinces of Banten and West Java. Each city has at least one million people and many of those residents work in the capital, enduring hours-long commutes.

Ideally, Jakarta can accommodate only about 5 million people as it was never designed to be a capital and lacks the capacity to effectively serve as one, according to Yayat Supriyatna, an urban planning expert from Trisakti University in Jakarta.

Craig Williams, the managing director of Savills Indonesia, believes it is time the government seriously studied the relocation idea.

"It is worth considering again. Jakarta is a major city that has infrastructure challenges. It doesn't meet the demands of a major city and the downside is that it has an impact on gross domestic product and productivity since people can't do business properly," he said.

President Joko Widodo said in July that the government was studying cities in three provinces but he stopped short of naming names.

Bambang Brodjonegoro, head of the National Development Planning Agency (Bappenas), which is conducting the study, said one possibility was Palangkaraya, the provincial capital of Central Kalimantan. Public Works and Public Housing Minister Basuki Hadimuljono has said the three provinces being considered are Central, East and South Kalimantan.

Landlocked Palangkaraya has been mentioned before as a contender. One of Bambang's predecessors at the planning agency, Andrinof Chaniago, floated the idea in 2010 in his capacity as a political analyst from the School of Social and Political Sciences at Universitas Indonesia.

One argument in favour of the island of Kalimantan is that it is located in the middle of the sprawling Indonesian archipelago. As well, it is not part of the chain of islands included in the seismically active Pacific Ring of Fire, and therefore less prone to natural disasters.

Palangkaraya is home to about 260,000 people spread over 2,600 sq km, for a very low population density of just 100 people per sq km. Balikpapan has 615,000 people in 508.4 sq km and a density of 1,211 per sq km. Pontianak, the capital of West Kalimantan, has 607,438 people in 108 sq km with a density of 5,635 people per sq km. Another major city in Kalimantan is Banjarmasin, the capital of South Kalimantan province, which has 675,440 people and covers 98.5 sq km.

Mr Anton of Savills said Kalimantan's central position offered good connectivity to many points across Indonesia and Asia.

"But that is on condition that all infrastructure issues are addressed," he said, adding that the lower density of cities in Kalimantan meant there was plenty of vacant land ready to be assessed for feasibility.

But the latest capital relocation plan hit a roadblock in July when lawmakers in charge of state budgeting rejected a proposal from Bappenas for 7 billion rupiah (US$5.2 million) for the feasibility study.

Mr Bambang said, however, that his agency would make do with the existing budget to carry out the study.

Nizar Zahro, a lawmaker with Gerindra (Great Indonesia Movement), the largest opposition party, said the proposal to move the capital was not logical and had no basis in law. So far, he said, the government had not submitted a draft bill on capital relocation for legislators to deliberate.

Other lawmakers say there are many more productive uses for public funds given that the country still faces pressure from foreign debt, massive infrastructure financing and other more pressing social economic issues.

"It is better for the government to concentrate on the smaller details such as providing jobs to the people and ensuring their welfare, instead of considering whether to relocate the capital," Deputy House Speaker Fadli Zon said.

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