China has emerged as the likely builder of Indonesia’s first high-speed rail line after Indonesian officials rejected Japan’s requirement for a government guarantee of loans, officials said recently.
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The US$5.5-billion project will be conducted on a business to business basis, in which the Indonesian side will control a 60% stake in the joint venture, while the Chinese partner will control the remaining 40%.
Much of the Southeast Asian nation’s transport network badly needs fix and it’s hoped the new 150-kilometre line between the capital Jakarta and Bandung will boost economic growth.
The high-speed train, which will stop at four stations between Jakarta and Bandung, is expected to travel at a speed of between 200 to 250 km per hour.
“This marks great cooperation between Indonesia and China and a landmark in the development of high-speed railway links”, said Sahala Lumban Gaol, the chairman of the joint venture.
To support the programme, China has agreed to build an aluminium plant in Indonesia, which could provide raw material for the production of the train cars.
Construction should begin early next year and be finished by the end of 2018, with trains operational by the first half of 2019, said Mr Bintang Perbowo, president director of Indonesian construction firm Wijaya Karya.
Wika owns 38 percent shares of the local consortium while state train operator Kereta Api Indonesia, state toll operator Jasa Marga and state plantation company Perkebunan Nusantara VIII control 25 percent, 12 percent and 25 percent respectively.
The Indonesian government invited China and Japan to bid for the project, but scrapped an initial plan to fund it using the state budget.
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Three quarters of the funding will come from China Development Bank, said Sahala. The project’s use of Indonesian state companies means it can buy land for the route using a law that sets timeframes for land acquisition, which until now has been the major obstacle for most infrastructure projects in the country and has scuppered previous plans to build railways on Sumatra and Borneo islands.
