China, Indonesia sign deal to build high-speed railway
Print Edition
CHINESE and Indonesian state-owned companies signed a US$5.5 billion deal yesterday to build the first high-speed railway in Southeast Asia’s top economy, after Beijing beat Tokyo to win the construction project.
The line will connect the Indonesian capital of Jakarta with the mountain-fringed city of Bandung, some 160 kilometers away, and is a key part of President Joko Widodo’s plans to overhaul the archipelago’s infrastructure and attract investors.
Japan was long expected to build the railway but China entered the contest earlier this year, and Tokyo’s bid was rejected last month.
Yesterday, the chairman of state-owned China Railway International, Yang Zhongmin, signed a deal with a consortium of Indonesian state companies to form a joint venture to build the railway, with construction set to start next year and the line to begin operating in 2019.
“This high-speed train will make it easier for the public to travel,” he told reporters in Jakarta, where the deal was done. “This major project will also provide major employment opportunities and boost the economy.”
State-owned China Development Bank will provide 75 percent of the funding, with the rest coming from the Chinese railway company and Indonesian consortium.
The railway line will not need any financing from the Indonesian government, nor a government guarantee.
One reason that Indonesian officials gave for rejecting the Japanese bid was that it would require government funding.
The high-speed train route will cover eight stations from Jakarta to Bandung, and the train will travel at speeds of around 250 kilometers an hour.
The Indonesian government had repeatedly changed its mind about the railway project, before eventually agreeing to accept China’s bid for a high-speed line.
The bidding process and final decision angered Tokyo, with chief government spokesman Yoshihide Suga calling it “extremely regrettable.”
Japan’s loss came despite its reputation as a world-class train maker, famed for its “shinkansen” bullet trains.
China has built thousands of kilometers of high-speed railway in recent years.
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