Indonesia’s first high-speed train to begin operations in August, minister says

Nazarudin Latif and Pizaro Gozali Idrus
Indonesia’s first high-speed train to begin operations in August, minister says A worker walks next to a new high-speed train at the Jakarta-Bandung Fast Railway station in Tegalluar, West Java, Oct. 13, 2022.
Dita Alangkara/AP

Indonesia’s first high-speed train is to start operating on Aug. 18, a senior cabinet minister told reporters on Monday about the delayed and over-budget China-funded Jakarta-Bandung rail project.

However, China has insisted on keeping the interest rate for the project loan, including the cost overrun, at 3.4 percent, despite Indonesia's request to lower it to 2 percent, said Luhut Pandjaitan, the coordinating minister for maritime affairs and investment, who visited Beijing last week.

The Jakarta-Bandung high-speed train service, the Chinese Belt and Road Initiative’s flagship project in Indonesia, now costs U.S. $7.2 billion, up from an initially estimated $6 billion (89.6 trillion rupiah).

“We expect to start operating on Aug. 18, 2023, as a gift for the 78th anniversary of Indonesia's independence,” Luhut said at a press conference, about the line that was scheduled for completion in 2019.

“The trial run will start by the end of May at the latest and it will be good to go,” Luhut said, adding that he expected a high-level Chinese official would attend the launch of the train service.

Luhut said the interest rate for the project loan was lower than the average 6% imposed on most other countries that borrowed from China for infrastructure projects, adding Indonesia would be able to pay it back because the economy was improving and tax revenues were increasing.

“There is no problem. Why are you doubtful of our nation? Don’t underestimate our nation,” he said. 

Luhut said the government was also negotiating with China on the loan tenure and the grace period for repayment. The tenure could range from 30 to 40 years, while the grace period could be 10 to 15 years.

President Joko “Jokowi” Widodo had promised not to use any state funds for the project, but the government agreed in 2021 to fund $200 million of the cost overrun through capital injection. 

The Indonesian government had last year proposed that the China Development Bank, which is financing the project, shoulder 75 percent of the cost overrun, with the consortium of Indonesian and Chinese companies covering 25 percent. 

 The new rail line is expected to reduce the travel time between Jakarta and Bandung to 34 to 45 minutes from 2.5 hours by regular train. It has faced several delays and controversies, including criticism of its environmental impact, since it was launched in 2016.

The train service is expected to run at a speed of 350 kph (217 mph) along the 142-km (88-mile) route. Luhut said that all tracks had been connected, with a total length of 304 km for both sides. 

 Luhut further said the government was open to extending the concession period for the rail service, which was initially set at 50 years, as long as Indonesia remained the majority shareholder.

He said that public transportation projects were usually not profitable, but they provided social benefits for citizens.

China is funding projects in Indonesia as part of its Belt and Road Initiative (BRI), a worldwide infrastructure-building program.

In addition to the high-speed rail, Beijing has also committed to invest in a green industrial zone in North Kalimantan, Luhut said.

Indonesia welcomed partnerships with any country as long as they were based on mutual trust and mutual benefit, the minister added.

“We don’t want to depend on anyone. If China has good technology and comes to us, we accept it,” he said. 

“No country can dictate to Indonesia.”


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May 07, 2023 08:35 AM

Thank you China for all the progress you are bringing to the whole world.