Masa Son, the crown prince of Abu Dhabi and Tony Blair walk into a bar and decide to build a $34B city in Asia
UPDATED, Jan. 20, 2020, 7:25 p.m.: How much would it cost to build a brand new, 445,000-acre capital city from scratch in the 21st century? Indonesia figures about $34 billion, and the world’s fourth-most populous nation has tapped a strange collection of people to execute the plans.
The massive development project will be led by Crown Prince Sheikh Mohammed bin Zayed Al Nahyan of Abu Dhabi, according to the Associated Press.
Following a two-day meeting with President Joko Widodo, the crown prince has agreed to lead a committee overseeing the construction of a new capital city in the sparsely populated province of East Kalimantan on Borneo.
Committee members also include Softbank CEO Masayoshi Son and former British Prime Minister Tony Blair. The United Arab Emirates and Softbank, currently dealing with the fallout from Son’s disastrous bet on WeWork, will contribute funding to various subprojects included in the megaproject. The recently-established U.S. International Development Finance Corporation is set to provide funding as well.
Only about 19 percent of the funding is planned to come from Indonesia’s state budget, according to the AP. The rest will be funded by direct investment from government-run companies, the private sector, and other sources. It’s to be built as a smart city, with sensors and big data utilized to realize efficiencies.
For context, the $34 billion price tag is half the early estimates for California’s now-scrapped San Francisco-to-Los Angeles high speed rail project. It’s also about half the money that Brazil spent to build its capital Brasilia from scratch in the late 1950s, accounting for inflation.
Indonesia wants a new capital because its current capital on the island of Java, Jakarta, faces a number of existential threats. Uncontrolled groundwater extraction is causing the city to sink and its rivers are highly contaminated. It’s also overcrowded, and prone to earthquakes and flooding. Congestion costs the economy an estimated $6.5 billion each year, according to the Associated Press. [Associated Press]
Correction: The headline previously misidentified the crown prince of Abu Dhabi.