Parliament Warns of Iran's War Impact Potentially Hindering IKN Development
Jakarta, CNBC Indonesia - Commission II of the House of Representatives (DPR RI) has highlighted the budget for the development of the Nusantara Capital (IKN) amid growing public concerns over the impact of the conflict in the Middle East due to the war between Iran and the United States (US) and Israel.
Commission II Chairman Rifqinizamy Karsayuda explained that the IKN development could be affected by the war in the Middle East, including prices of building materials and fuel. He requested that the IKN Authority undertake several funding innovations to mitigate the war’s impact on the development budget.
“For the IKN Authority, I think the current situation is not easy. Our desire to meet the 2028 target for having a new capital, namely IKN, as per Presidential Regulation Number 79 of 2025, certainly involves very high dynamics. I am also convinced that prices of building materials, construction work, and so on will definitely be impacted by this,” said Rifqinizamy during a working meeting (raker) with the IKN Authority (OIKN), on Monday (30/3/2026).
He admitted to having discussed with several Commission II leaders so that the OIKN could also utilise local resources, such as oil wells and port facilities in the IKN area, to be included in the OIKN’s revenue.
“All oil wells in Kutai Kartanegara Regency are now within the IKN territory. On the sea side, from 3 to 12 miles, the port potential is very high in the Kutai Kartanegara area. Currently, this is managed purely by the Central Government, partly by the Provincial and Regency Governments. If this position can be maximised, we hope that the IKN Authority can create its own revenue,” he explained.
Separately, in response to this, IKN Authority Head Basuki Hadimuljono said that they are also open to options for implementing several efficiencies. According to him, efficiency needs to be carried out by all state institutions, not just by OIKN.
“I think not only in IKN, but also in the DPR, right? So I think that is a general policy,” said Basuki when met by reporters after the working meeting with Commission II of the DPR RI, on Monday (30/3/2026).
In addition, along with the implementation of work from home (WFH) by the government for civil servants (ASN), they will also open options for efficiency by applying schemes such as WFH to savings in electricity use in IKN. However, the implementation of this is not yet clear when it will be enforced.
“So the efficiency can be in the form of WFH for us, or electricity savings, or others,” he clarified.