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AKA bridge connecting Java and Sumatra Island
On the surface, this seems like a great idea... until you realize that there's literally Krakatoa (more accurately Anak Krakatau) just chilling there
As an Indonesian, I kinda hope this will happen, but I doubt it will happen... and if it does happen, it's probably not in my lifetime :(
I'm sure it's possible in theory though--look at Seikan Tunnel and Channel Tunnel!
Yes, a rail tunnel seems more logical and Seikan would seem to prove that earthquakes are not a deal-breaker.
With another (much shorter) tunnel at Banyuwangi, Indonesia's rail network could run from Palembang to Bali. Very logical in a such a densely populated place. The Japanese would have done it already! Maybe this would have been a better use of all that money being spent on building a new capital city in the jungle.