Indonesia picks Borneo island as site of new capital

Indonesia's capital city is to be relocated to the province of East Kalimantan on the island of Borneo, President Joko Widodo said on Monday.

The current capital, Jakarta, home to more than 10 million people, sits on swampy land and parts of the city were sinking by as much as 25 cm a year and almost half now sits below sea level, the BBC reported.

No name was given for the capital's planned replacement.

The new city will straddle two relatively undeveloped regions, Kutai Kertanegara and Penajam Paser Utara.

The ambitious project will cost 466 trillion rupiah ($32 billion), according to a government official.

Widodo on August 16 had formally proposed the relocation of the country's capital from Jakarta to the island of Borneo.

In May, he visited several of the possible candidates for the new capital, including Bukit Soeharto, located some 40 km from the provincial capital of East Kalimantan, Balikpapan, Efe news reported.

Nearly 30 million people live in the metropolitan region that forms Jakarta and its satellite cities.

It is one of the most polluted capitals of the world and its traffic jams have led to the state losing millions.

The idea of relocating the capital has been under consideration by the Indonesian government since the first term of Sukarno who led Indonesia between 1945-1976.  IANS