Greater Jakarta, one of the world's most densely populated cities, sits on a swampy plain and is sinking at a faster rate than any other city in the world.
Jakarta has focused its attention on bolstering its defences with a 15-mile sea wall and refurbishing the crumbling flood canal system.
The government decided late on Tuesday to allow work to continue on a key phase of the ‘Giant Sea Wall’, which aims to shore up northern Jakarta while revamping the capital's image into a Singapore-like waterfront city.
‘If this Giant Sea Wall is not done, that will create a big impact on Jakarta with regards to salt water penetration,’ Coordinating Maritime Minister Luhut Pandjaitan told reporters on Tuesday.
Included in the master plan is the building of 17 artificial islands off Jakarta's northern coast, where property developers plan to build shopping malls and attractions similar to Singapore's Sentosa Island.
But work on that project was suspended in April following disagreements between the government and the Jakarta governor over who had authority to issue permits. Some fishermen have also protested against reclamation, saying it would reduce their catch.
In response, the government plans to offer them fishing permits in waters near the Natuna Islands.
The suspension in April also threatened to delay Indonesian property developer PT Agung Podomoro Land's multi-billion-dollar Pluit City, comprising apartments, offices and shopping malls on parts of artificial land it was constructing.
‘We are still waiting for government direction,’ said Justini Omas, the company's corporate secretary. ‘Previously, we had planned that construction of the island would be done in 2018.’
Earlier this month, former Agung Podomoro executive Ariesman Widjaja was jailed for three years for bribing a member of the Jakarta provincial assembly to influence the regulation for the land reclamation, media said.