Indonesia celebrated its independence anniversary at the site of its planned new capital, Nusantara, for the first time on Saturday, in a scaled-back ceremony as the still-under-construction city is beset by problems and faces delays.

A legacy project of outgoing President Joko Widodo, Nusantara has suffered construction delays and funding shortages due to the COVID-19 pandemic, a lack of foreign investment, and more recently, resignations of project leaders.

In Saturday's celebration of the country's independence from Japanese rule that ended in 1945, the number of attendees was cut to 1,300 guests, down from 8,000 initially, as lodgings and food supply were limited, Jokowi, as the president is popularly known, said earlier this week.

Hundreds of attendees from local communities and construction workers joined the ceremony under red umbrellas, with several under-construction buildings behind them.

Mulyana, a 38-year-old construction worker at the new capital, said he spent the last nine months to build a ministry office building which was partially used on Saturday for the celebration amid limited infrastructure to move the materials.

"For five months we work in 24-hour shifts, due to limited access we need two to three hours (daily) to move the concrete using heavy equipment," Mulyana, who like many Indonesians has a single name, told Reuters on Friday, adding that when he came a year ago, water and electricity supply were limited at the site.

Nusantara is being built in a forested pocket in the eastern side of Borneo island, about 1,200 km (745 miles) from the current capital, Jakarta, on Java island.

Jokowi has sought to shore up confidence in the $32 billion mega-project in recent months, breaking ground for hotels and office buildings and holding the first cabinet meeting in the eagle-shaped new state palace.

But he has also said plans to relocate thousands of civil servants to Nusantara could be postponed, subject to the readiness of the capital city, after previously ordering them to pack up and move in September.

Incoming president Prabowo Subianto, who also attended Saturday's ceremony, has promised to continue Nusantara.

A parallel celebration was also held in Jakarta, where most of the music and dances were performed.