Indonesian President Joko Widodo said on Wednesday that large parts of the nation's capital will sink below sea level if a $40 billion construction project, mired by accusations of corruption, does not go ahead.

A major bribery scandal and bureaucratic clashes prompted authorities last week to suspend work on a key phase of the "Great Garuda" project, which aims to shore up northern Jakarta while revamping the capital's image into a Singapore-like waterfront city.

"It is estimated that all of North Jakarta will sink below sea level by 2030," Widodo said at a cabinet meeting. "Because of that, the development of the capital's seaside, which has been delayed for so long, is the answer for Jakarta."

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.

Unable to stop the sinking, Jakarta has focused its attention on bolstering its defences with a 15-mile seawall and refurbishing the crumbling flood canal system.

The plan is known as the "Giant Sea Wall" or "Great Garuda", for its resemblance from the air to the bird-god of Hindu mythology that is Indonesia's national symbol.

"The point the president wants to make is the project is needed to save Jakarta," said city Governor Basuki Tjahaja Purnama. "But the national interest shouldn't be entangled in the legal cases."

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 these islands will be suspended for six months, said Cabinet Secretary Pramono Anung, after officials named the president director of property developer PT Agung Podomoro Tbk a suspect in allegedly bribing a city council member to influence the regulation for a land reclamation.

Authorities have also imposed a travel ban on the head of another property company, Agung Sedayu Group, and could soon name more suspects.

"We see this as a big case because it involves a Jakarta programme that is quite huge and that has become the object of the world's attention," Saut Situmorang, one of the key anti-graft investigators, told Reuters.

Widodo has backed the investigation and ordered his ministers to oversee every facet of the project.

"The president stressed that this project should not be driven by the private sector, but it should be completely within the control of the central and regional governments," Anung said. – Reuters