Contracts for building the infrastructure for Indonesia’s planned new capital city in the tropical forests of Borneo, called Nusantara, will be signed at the end of this month, the country’s public works minister Basuki Hadimuljono said last week.

Expected to cost around $34bn, Nusantara will be built on a greenfield site in the province of East Kalimantan on Borneo where the government owns about 18,000ha of land. Work has already begun clearing and laying roads.

He said his ministry proposed a budget for building toll roads, logistics roads and national roads, as well as workers’ accommodation. The government would also hold an auction to build the National Capital City Government Centre, reports Indonesia’s state news agency, Antara.

Some $365m (5.4 trillion rupees) has been budgeted for the work this year, the minister said.

The government of president Joko Widodo started planning the new capital in 2019, citing overpopulation, pollution and congestion in the current capital Jakarta as the reasons, plus a lack of urban planning during the city’s rapid expansion in the 1960s.

Jakarta is also threatened by subsiding land and rising sea levels, with a 2018 study predicting that a quarter of the city would be underwater by 2025.